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New LBJ credit policies show favorably on 2nd qtr revenue

During the second quarter of fiscal year 2012, LBJ Medical Center documented a decline in patient visits to the medical center except for the Dialysis Unit, with a hike of 4.7% in patient visits, according to the hospital’s FY 2012 second quarter performance report covering the period of Jan. 1-Mar. 31, 2012.

At the end of the 1st quarter (Oct-Dec. 2011), dialysis visits totaled 4,079 but by the end of the second quarter there were 4,101 visits, the report says and noted that at the end of the second quarter in FY 2011, there were 3,915 dialysis visits.

According to the report, the decreased volume in patient visits for the 2nd quarter “reflects a national trend” and that “some have suggested the the lower volume is a function of the higher fees proposed and briefly enacted” for a few weeks starting in February. (The revised new fee hikes go into effect next Monday, July 2)

“It is important to note that the changes in volume started last August and there was no public mention of rate increases until the end of November last year,” it says. “February and March are typically the busiest months for the hospital but a spike in business was not noted this year.”

LBJ did point out that Net Patient revenue for the quarter is 50% better than budget, despite the lower patient volume. “This reflects improvements in our entire revenue cycle,” according to the report submitted by hospital chief executive officer, Mike Gerstenberger. “We are more often capturing correct patient information at admission, correctly capturing appropriate charges, billing appropriately, following up on balances owed and making appropriate adjustments.”

LBJ says the new credit and collection policies are also favorably impacting revenue figures, adding that the hospital “has been aggressively collecting on balances owed which have not been worked for years.”

For operating expenses, the report said it’s over budget by 18% and the “single largest contributor... is salaries and wages.” Additionally, the higher figure reflects adoption of the mandated Wage and Hour corrections to Timekeeping and Overtime procedures.

(As previously reported by Samoa News, the U.S. Department of Labor, following an investigation last year, found that LBJ will need to pay back $628,115 in back wages to 481 employees who didn’t get the right over-time pay or who didn’t get the minimum wage.)

“This was the quarter that the financial wheels came off the bus for LBJ,” the report says, adding that the emergency financial assistance requested last October to the government didn’t materialize and cash flow was insufficient to make payroll, resulting in implementing a furlough and closing of clinics on Fridays to reduce expenses.

These cost saving measures were later rescinded when the Fono approved a $3 million loan from the ASG Workmen’s Compensation Account for the LBJ.


The Emergency Medical Service was transferred back to LBJ effective Jan. 1 this year and the report says ASG estimates that salary expenses alone for EMS come to about $800,000 per year. However, there was no allowance in the FY 2012 for vehicle maintenance, fuel or medical supplies for EMS, whose total personnel was 76 during the quarter.

The EMS budget will be included in the FY 2013 LBJ budget proposal and lawmakers are expected to again question EMS and LBJ officials on how