Vendor complains about non-payment of $5M
THE hospital’s cycle of debt was at the forefront of discussions during the Guam Memorial Hospital Authority’s board of trustees meeting last night.
During the meeting, it was revealed that a GMH vendor, which was not identified, has contacted the hospital about a $5 million debt owed by GMH. The hospital has 60 days to respond to the complaint. If there is no response, the vendor has threatened to tap into the federal money the hospital receives for Medicaid and MIP.
To resolve the issue, the hospital plans to get further information from the vendor.
GMH officials said collecting on owed debt to the hospital is the most likely way to pay off the vendor. Currently, the government of Guam owes the hospital $27 million over the past two years in Medicare, MIP, and other payments.
“The government is going to have to step up and deal with it, and I think this letter might be able to light a fire under them,” said GMH Administrator Joseph Verga, “even if they step up to the plate and pay half.”
If only 20 to 30 percent of those funds are paid to the hospital, the debt payment can be negotiated, stated Frances Taitague-Mantonana, of the GMHA finance and audit committee.
In his report to the board, GMH acting CFO Jun Infante stated estimates show gross revenues of $130 million for the hospital. However, Verga explained to the trustees that the hospital's massive amount of debt eats into any generated revenue.
The consequence of GMH’s debts can be felt on an almost daily basis. According to Verga, the Guam Power Authority on Monday shut off one panel of power to the hospital due to a lapse in payment. However, a deal was negotiated.
Much of the money the hospital owes is from years past. “The problem is that we’re never going to take care of this debt – regardless of what we do and what we cut. So we’re really going to have to tackle that debt. In terms of the financial situation, that really defines everything,” Verga said.
On the flip side, a lot of debt is owed to the hospital from the government as well as self-pay patients. Verga said the hospital will need to aggressively pursue money owed to them, especially money owed within two years.
Debt owed to GMH after two years is unlikely to be collected. The issue is, Verga said, the hospital finds itself playing catch-up with debts from five or six years ago.
Verga explained to the board that he had been in discussions with local politicians regarding the debt that GMH owes and what is owed to GMH. “Everybody’s got to live up to their obligations in order for us to live up to our obligations,” Verga stated.