Study outlines how county home could improve finances

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Study outlines how county home could improve finances

The Butler County commissioners know they are going to have to spend some money, likely more than $1 million, to fix finances at the county nursing home.

A new report suggested that if the county maintains status quo at the Butler County Care Facility, the ending cash balance will sink to negative $2 million, with revenues $1 million below expenses by 2020.

The care facility has had to borrow $1.1 million from the commissioners since 2013 to fill gaps in its $7.4 million budget, largely because of shifting rules and funding levels of Medicaid reimbursement. There is $500,000 outstanding on the tab with the commissioners.

The commissioners hired business consulting firm Plante Moran earlier this year to make recommendations that would keep the facility afloat. Chris Joos, a partner at the consulting firm, gave the county three “scenarios” that included the “do nothing” option.

He said the county could raise taxes, outsource billing and accounting functions — some of that is being done — and downsize to 99 beds and spend $500,000 fixing up the place. Under this plan “the BCCF would be able to reach a healthy cash balance of $1 million by 2019,” Joos wrote.

The commissioners have said that a tax levy is out of the question.

“We’re not putting a levy on, that’s not going to happen,” commissioner Don Dixon said. “We’ll find a way to make it work.”

“We’re not apt to raise taxes,” commissioner T.C. Rogers said.

Dixon envisions a hybrid solution of sorts. He said the $500,000 Joos mentioned for facility renovations won’t be nearly enough to make the home competitive in the marketplace. He said they need to hire more consultants — Plante Moran will be involved — to help them figure out a new niche like wound care for example.

Right now the home’s niche is that they will take all the poor and difficult patients private nursing homes won’t take.

BCCF administrator Chuck Demidovich has had his maintenance person sprucing up the wing that soon will house dementia patients because there is a shared bathroom in that area. New ceiling tiles and fluorescent lights have transformed the hallway, but Dixon said a lot more is needed.

“My guess is we’ll spend well over $1 million inside there for equipment and actual physical condition of the building,” he said. “We’re going to have to change the room sizes, make bigger rooms. We’re going to have to add some bathrooms.

“It’s just some things we’re going to have to do to offset some of the losses from strictly all Medicaid.”

Joos noted on average there are only seven private-pay patients at the 109-bed home and the county has taken another Medicaid rate hit, dropping it by $13.21 per day, an annual loss of $360,600.

Dixon also mentioned, as Joos did in his report, that they need to rectify billing problems that have caused $548,300 in noncollectable debt from unpaid bills. Joos said they had staff turnover in the billing department and there was no follow-up on Medicaid approvals.

Dixon noted what’s been happening is that the facility takes in someone and it might later be discovered that they own property or have a savings account so Medicaid won’t pay. Billing wasn’t on top of that, so the home had to write off months’ worth of bills.

“If they would happen to leave, die, whatever reason they’re no longer there, we’re out of luck,” Dixon said. “If staff is not on that and watching it very closely they can run three, four, five months waiting on Medicaid, and then Medicaid doesn’t happen and you’re just out.”

The county ended up owning a home in Hawkinsville, Georgia, because of a similar situation. It was sold earlier this year for $1,000.

Demidovich has already outsourced some billing and plans to ask commissioners for new software that will help get a better handle on the finances.

“Yeah, they pointed out my weak point — the financials — but I came here being a regional over 23 homes. I had a corporate office that did my financials, that wasn’t my problem,” he said.

“It’s a learning process every year, especially with My Care Ohio. That’s why I went with the outside billing company this year. We’re pretty much doing the recommendations already, so we’re on the right track.”

Joos noted he expects things to get better because of the controls Demidovich has put in place.

The first part of the Plante Moran study cost $9,500 and identified that the nursing home is needed because it takes patients the private sector usually won’t. The estimate for the second phase was $13,000 to $15,500.

County Administrator Charlie Young pointed out that Joos was highly complimentary of Demidovich and the care his staff provides and said this is just the first phase of many to address issues at the county home.

“This report isn’t necessarily the end of the story, but it’s kind of a step on the journey to get this county home facility, to make sure it’s there, it provides excellent care,” Young said. “I believe it was clear from the study how highly they think of our staff and the mission that we have and our ability to fulfill that mission.

“There are just some very difficult cost barriers to overcome with the patient mix that we have.”

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