GMH retains consulting firm for $2.4M
Updated: Oct 31, 2022
By Mar-Vic Cagurangan
For every amount collected from patients with outstanding accounts, a private consulting company hired by Guam Memorial Hospital claims 12 percent.
Between October 2021 and February this year, GMH paid MedHealth Solutions more than $800,000, and a statement of account dated Jan. 1, 2022 showed that the hospital still owes the company $720,543 for three pending invoices.
Documents showed that besides collecting dues from self-pay patients, MedHealth is also tasked with collecting reimbursements from third-party insurers.
“Part of the collections is illegal due to some of the Covid patients’ medical expenses have already been reimbursed by the federal Cares Act funding,” according to a GMH insider.
“GMH is double-dipping to put money into their friend’s pockets by going after the poor," the source said, naming three people who are allegedly "silent partners" at MedHealth.
According to Deloitte & Touche’s April 12 audit report, GMH received $4.5 million from the Centers for Medicare and Medicaid Services in April 2021. The amount was granted under the Expanded Accelerated and Advanced Payments Program.
“CMS issued these payments to help ease financial strain due to a disruption in claims submission and claims processing related to the Coronavirus Diseases 2019 public health emergency,” the audit report said.
According to the auditors, GMH repayment was scheduled to begin in April 2021 "through an automatic gradual recoupment of Medicare payments otherwise owed to GMH."
In an updated statement, GMH explained its payment arrangement with MedHealth.
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Documents indicated that GMH issued a total of five purchase orders from MedHealth worth $2.4 million since 2021.
Cindy Hanson, public information officer at GMH, said the contract with MedHealth was “thoroughly reviewed and approved” by the Office of the Attorney General.
“The scope of services was essentially to assist/enhance GMH’s processes in capturing and collection of patient revenue in accordance with the Healthcare Financial Management Association,” Hanson said in an email.
“In addition, the MedHealth consultant group will provide guidance and training to GMH staff until such time that GMH’s capabilities are stable and secure to sustain its (revenue cycle management),” she added.
According to the transcript of the GMH board of directors' May 27, 2020 meeting, “After being unable to secure approval by the Office of the Attorney General for the sole-source procurement for (revenue cycle management) services, the GMHA had prepared/issued a request for proposal for the same service.”
The hospital's first purchase order for the amount of $450,000 was issued on May 27, 2021.
“The signed agreement with Medhealth Solutions will be forwarded to the Office of the Attorney General for approval, and then routed to the Office of the Governor. MedHealth Solutions will be providing training for the staff to capture all possible claims, among other services,” the transcript reads. “The desired effective date is June 2020, but delays were expected due to travel restrictions."
A report by the Office of Public Accountability in April stated that MedHealth “began reviewing the hospital’s current revenue cycle management processes” in June 2021.
“The term of the contract with the consultants is one year with completion in May 2022, when GMH staff will manage the revenue cycle after proper training and updated policies and procedures,” OPA said.
In an affidavit of ownership disclosure dated July 12, 2020, Rene Ramos of Tamuning, Paul Pineda of Dededo and Glenn Hermes of Texas are listed as owners of MedHealth Solutions. The company’s website does not contain contact information for its owners and executives.
Documents showed that GMH issued MedHealth a $1.02 million purchase order on Oct. 15, 2021 to cover the September 2021 collection fee and balance from August 2021.
On Oct. 18, 2021, the company invoiced GMH an amount of $801,080, representing its 12 percent claim from the September 2021 collection. Citing a GMH collection report, MedHealth’s invoice showed that the hospital collected $13.8 million.
Its formula indicated that MedHealth had a 12 percent claim from an accounts receivable cash collection above $7.2 million, with a resulting difference of $6.67 million.
GMH completed the invoice payments in five installments: $264,000 (Nov. 18, 2021); $250,000 (Dec. 21, 2021); $250,00 (Jan. 10, 2022). and the last installment was $37,080, which formed a portion of a check worth $115,685 dated Feb. 11, 2022. The check also covered $78,605 for another invoice dated Nov. 17, 2021.
Other purchase orders issued to MedHealth were made on Dec. 7, 2021 ($354,855), Jan. 18, 2022, ($485,261), and Feb. 15, 2022 ($159,018).
"Instead of going to this private company, the money should have gone to the nurses and frontline workers during the Covid-19 pandemic," the source said.
“To improve GMH’s Revenue Cycle Management processes, the hospital procured in November 2021 an electronic claims-scrubbing software, which would reduce rejections, denials, delayed payments, and improve efficiency and cash flows,” OPA said in its April report.
OPA found that deficiencies that have been identified since 2015 “remained uncorrected as of FY2021.”
As of Sept. 30, 2021, OPA said, unbilled receivables of $7.5 million increased from $5.4 million in fiscal 2020. Of the amount, $5.9 million, or 79 percent, was missing codes for admitting diagnosis, which must be inputted in the Medical Records Department.
Of the unbilled receivables, OPA said $1.4 million was pending verification of charges with labs, physician notes, or other support.
“GMH has $0.96M in accounts receivable suspense account, of which $0.73 million pertains to over applications of advances from Medicare. Reconciliation and investigations are ongoing, and items dated prior to FY 2017 were cleared or adjusted,” OPA said.
“The number of days from discharge to bill drop ranged from eight to 134 days for 40 sampled revenue transactions. The average days for bills to drop is set at seven days,” OPA said.