House hearing on healthcare bill reveals thought-provoking issues
Pago Pago, AMERICAN SAMOA — With approval of Gov. Lolo Matalasi Moliga, the LBJ Medical Center has written off from its financial books, all unpaid and outstanding amounts of the ASG subsidy owed to the hospital, allowing the LBJ to move forward with its “cost reporting” for the Centers for Medicaid and Medicare Service (CMS).
LBJ chief executive officer, Faumuina John Faumuina made the revelation during a House Budget and Appropriations Committee hearing last week on an administration bill which seeks to amend the current 2% wage tax law and establish by law the Governor’s Healthcare Professional Succession Initiative.
Faumuina informed the committee that LBJ is supportive of this Initiative, which provides 50% of proceeds collected from the wage tax to provide financial assistance to local Samoa students seeking to pursue degrees in the medical field. The other 50% remains for LBJ operations.
He said the biggest challenge faced by LBJ is the shortage of nurses and doctors and there’s not enough locals to meet LBJ staffing demands. He recalled that there was a time a few years ago when local students were no longer being sent to Fiji for medical school and that has caused a shortage now.
In response to the current shortage of physicians, LBJ is recruiting from off island, despite the high cost involved, he said, noting that not only does LBJ hire the off-island doctor, but it also covers expenses for bringing the physician and the person’s dependents to the territory.
And there’s not much LBJ can do about the costs because “we have the need” for physicians, according to the CEO, who pointed out that this was the reason LBJ started discussions with the governor for a way to assist in providing sufficient local Samoan doctors and to push them to enroll at the medical school in Fiji.
He explained that obtaining a degree takes six years and that’s a lot of commitment for a person wanting to be a doctor and it’s costly. He said there are currently two local students who will graduate in 2022.
Recently, LBJ sent three new students, who will graduate in six years time and LBJ is hoping to send two or three more students later this year, he said.
For nurses, Faumuina said there is a “positive side” in addressing nursing staffing, through the ASCC nursing program, but the problem is, there’s not enough students taking up this medical field to address the current shortage. Therefore, LBJ recruits from off island.
The governor is hoping that through this Initiative, with available funds, more local Samoans will pursue this medical profession, he said.
According to current law, the wage tax is paid by all wage earners in the territory, with 50% of all proceeds collected earmarked for LBJ operations while the other 50% goes to the LBJ off-island medical referral program.
Under the governor’s proposed Initiative, there will be no more funds for the referral program, which Faumuina said is a concern at this point, because the public will be upset if they are told — when this bill is passed — that there’s no more referral program due to the lack of funds.
There was a question from the committee as to the status of the ASG subsidy payments to LBJ, which was allocated $2 million in each fiscal year 2020 and 2019.
Deputy Treasurer, Tina Onosa’i, who also attended the hearing, believes that payment of LBJ subsidies is not up to date, saying that paying the subsidy depends on available funds. She further believes that the payment for FY 2020 is not up-to-date.
Faumuina informed the committee that auditors were faced with the difficult task of closing out LBJ’s FY 2019 finances, because there were still revenues outstanding. Therefore, he said the hospital board of directors along with LBJ management requested the governor to “write off” all unpaid and outstanding subsidy payments from ASG in order for LBJ to clear its financial books — so that LBJ could conduct its “cost report” for CMS.
He said the governor accepted the board’s request to write off whatever amount ASG owes LBJ in subsidies and start with a clean-slate this year.
No one asked and Faumuina didn’t offer a figurre on the total amount that was written off.
Rep. Larry S. Sanitoa acknowledged that everyone is concerned with the shortage of nurses and doctors at the hospital but pointed out that there are financial options for students interested in pursing a career in the medical field. Those options include the ASG Scholarship Program or even re-visiting the ASG Student Loan program.
He said American Samoa is also in need of engineers and other professionals. He said if the government needs more funding for the ASG Scholarship program, the administration can seek additional allocation from the Fono.
He said there are still concerns and questions about the wage tax, which he said is an “unfair tax” and “very burdensome” on workers who are required to pay it. He said that maybe its time to repeal this tax.
He also said that LBJ is looking at savings this fiscal year through the reduction of local matching funds for the Medicaid program.
With the mention of Medicaid, Faumuina said he wanted to make clear that LBJ is not treated the same as other providers when it comes to Medicaid reimbursement. He explained that it’s only after a patient is treated and released that LBJ bills Medicaid for costs.
He said Medicaid reviews the billing, checks on the cost to ensure accuracy and if approved, CMS reimburses LBJ but for only 83% of the billing, not 100%. Additionally, CMS believes that the state Medicaid agency — referring to ASG — reimburses 17% of the billing costs.
Faumuina said the state’s contribution is through the ASG subsidies and the wage tax.
Sanitoa later told Samoa News that among his concerns about the wage tax is that the money collected by ASG Treasury is not going to LBJ as required by law. For example, he received reports last year from LBJ that it has an accumulative of $10 million on the 2% wage tax that ASG still owed to LBJ.
The House committee plans to call another hearing on the bill, and some lawmakers have requested an updated financial report on monies collected from the wage tax and how much ASG still owes on the LBJ subsidy.
However, the Senate late last week rejected its version of the bill.