The South Central Kansas Medical Center Board of Trustees voted during its Jan. 26 meeting to approve an agreement that will see SKCMC facilitate laboratory services for other medical facilities.

This contract specifies that SCKMC will participate in a hospital lab outreach program that is not Medicare- or Medicaid-driven, but rather a construct of the Affordable Care Act. This means that revenue is not subject to reimbursement reductions like Medicare or Medicaid payments.

By acting as a go-between for the lab and a facility that is in need of lab tests to be completed, SCKMC stands to gain a potentially large revenue stream. The way the program is set up ensures that SCKMC will not have any required capital outlay expenses, either.

SCKMC will receive funds from Integrity Ancillary Management, LLC and simultaneously utilize Sun Clinical Laboratory, LLC to complete the lab work from Integrity Ancillary Management.

SCKMC CEO Virgil Watson said the income seen by the hospital will depend entirely on how many lab tests are sent through the system. If  5,000 sets of labs are sent through, the medical center could gross more than $2 million in revenue in a single year.

While this program might not be a long-term solution to SCKMC’s financial issues, it likely will help to ease the short-term financial burden.

The agreements between SCKMC and the other two parties are active as soon as they are signed.

Census improves

SCKMC trustees also were presented with increased hospital census numbers due to the traffic in the brand-new Geriatric Psychiatric Unit.

Since the doors opened to the Geriatric Psych Unit earlier this month, there has been an average census of 6.8 people in that department.

On two recent occasions, the unit was completely full, including Jan. 26.

“The census was at 11 when I left last night,” said SCKMC CFO Holly Harper. There are 12 total beds in the Geriatric Psych Unit.

Last February, Watson said the largest issue the medical center faces is increasing its patient census.

SCKMC needs a minimum average of 13 patients to begin to have a chance of breaking even, he assessed.

The numbers in the Geriatric Psych Unit have begun to push the average patient census to more than 13 so far in 2017.

Billing software

The board also approved a motion to purchase new accounting software that should ease the burden of SCKMC’s accounting department.

The software will allow the accounting department to batch invoices at a much faster rate, instead of waiting a day or two for the invoices to batch. As an added benefit, all payment contracts will be loaded into the system.

These payment contracts exist for all major health insurance companies and provide SCKMC with a set amount for each medical procedure.

“They had one company turn this on and found that one payer — Blue Cross Blue Shield — that had underpaid by $6 million,” Harper said.

She anticipates any underpayment that might be found at SCKMC would be less than that number, but added that she suspects that there are some insurance companies that are not paying SCKMC the correct amount.

The new software will allow the accounting department to see each individual claim, including what contract pricing exists for procedures performed and whether the insurance agency has paid correctly. “That’s going to be the first thing that I’m going to look into,” Harper said.

Currently, the medical center does not have this ability. “They’ve got my support,” Watson said.

“Any chances this will pay for itself?” asked board member Hap McLeod. “I think that it will,” Harper said.