GMH has history of not charging enough for services

by Krystal Paco

Guam - It was last Friday representatives from the Guam Memorial Hospital pitched their $144 million budget to lawmakers.

That request is based on the assumption that GMH will receive appropriate reimbursements from the Centers for Medicare and Medicaid as well as recommended fee increases.

The reason for the Guam Memorial Hospital's history of flatlining finances?

Decades of not properly charging for hospital services.

At today's Association of Government Accountants meeting, GMH chief financial officer Alan Ulrich reviewed the numbers. Room fees for the ICU only going up twice in the last 28 years and fees to visit the emergency room only up four times.

He said, "If you come to the Emergency Room since 2010, whether I'm there for 15 minutes with the doctor or hours with the doctor I charge $70.85."

Ulrich notes that GMH is the only hospital that sees fees decrease in some services such as the cost for a chest x-ray reading from a peak of $39.40 in 2010 to the present $31.

The solution?

"We're going to present a fee increase to the legislature and I'm actually working on the paperwork right now for both the board for public hearings that are required internally as well as at the legislature," he said. "We are authorized to change our fees every year by Section 80 of the code."

Ulrich says presently, GMH doesn't follow Guam law but instead a Deloitte Consulting report from 1992 which defines its current methodology. Guam law however allows for rate increases so GMH may recover operating costs - a task overseen by the GMH board of trustees.

"This is a law. We're allowed to do a 5% rate increase every year," he said.

Meanwhile GMH FY2014 budget request also assumes federal, territory, and private insurers appropriately reimburse GMH in order to achieve an estimated $115 million in collections.

At last week's budget hearing lawmakers expressed concerns regarding these assumptions, but GMH administrator Joseph Verga says they're prepared to make adjustments to the spending plan.

The budget request also includes expenditures historically overlooked, such as $20 million owed to vendors.

Ulrich adds the fee increase proposal will be presented to the public and lawmakers in September.