Working Capital for Healthcare Funding

Economic Downturn Squeezes Hospitals' Ability to Borrow Money

noreply@blogger.com (Kim) — Mon, 24 Nov 2008 16:22:00 +0000

As a result of a bad U.S. economy, a new report notes that hospitals, which employ 5 million people nationwide, could be facing uncertain times as their financial health falters and their ability to borrow funds for improving facilities and updating technology is squeezed.

The report shows the credit crunch is increasing the costs of borrowing money, making it more difficult for hospitals to find the financing for facility and technology improvements. It indicates hospitals have delayed or will delay capital investments in the near future:

56 percent are holding off on renovations or plans to increase capacity or considering postponements

45 percent are delaying the purchase of clinical technology or equipment

39 percent are putting off investments in new information technology

Sun Capital HealthCare, Inc. (SCH) provides a debt-free funding solution for hospitals and healthcare providers that can help alleviate the financial stress associated with not having sufficient up-front cash to meet overhead and finance necessary improvements.

Healthcare executives can use the funds generated from SCH's Medical Accounts Receivable (MAR) Funding program to improve return on investments (ROI's) by financing deferred projects, such as renovations or the purchase of needed equipment, at today's costs and seeing the benefits of their investment sooner.

HOSPITAL CREDIT RATINGS CONTINUE TO SLIDE

noreply@blogger.com (Anonymous) — Thu, 20 Nov 2008 14:21:00 +0000

A recent article in H&HN Magazine ,online, noted the continuing decline of hospital credit ratings due to the economic crisis. The author, Randy Edwards, cited several experts that were interviewed for the article as giving health care administrators the following advice:

pay attention to day-to-day business as there are new revenue sources and savings to be found

shore up physician relationships - through effective recruitment and retention strategies

A medical accounts receivable program from Sun Capital HealthCare, Inc. can be a financial solution to reimbursement delays while at the same time ensuring a healthier balance sheet that is more attractive to the credit markets. Because SUN's program is not a loan, the provider can utilize its receivables as a cash flow solution for generating working capital rather than as an obstacle to growth and proftability. Additionally, the flexibility in SUN's MAR funding program allows the provider to use the funds to follow the above advice.

With the healthcare marketplace becoming increasingly competitive, a provider's survival as well as growth depends on an effective financial strategy and using all the financial tools available.

Obama Urged to Overhaul Healthcare, Stat

noreply@blogger.com (Jenny) — Tue, 18 Nov 2008 18:17:00 +0000

In a letter to Obama, the Business Roundtable, the National Federation of Independent Businesses, AARP and the Service Employees International Union urge that a healthcare overhaul be a priority in the administration's first 100 days.

In their letter, the groups link healthcare reform with the nation's bleak economic conditions.

Obama made healthcare reform a central plank of his presidential campaign, pledging a sweeping effort to expand coverage and lower costs. But since his victory, he has not indicated how he plans to proceed with an overhaul that could cost hundreds of billions of dollars and spark an intense political battle.

In a national radio address Saturday, Obama made a general reference to healthcare reform, listing it with energy, education and tax relief as "key priorities."

Sun Capital HealthCare, Inc. Provides Funding Solutions for the Healthcare Industry

noreply@blogger.com (Kim) — Mon, 17 Nov 2008 18:47:00 +0000

Sun Capital HealthCare, Inc. (SCH) will participate in the Healthcare and Capital (HCap) Conference as a funding solution provider for the healthcare industry from November 19-21, 2008 in Washington, DC.

HCap is designed specifically for C-suite healthcare leaders and financial executives. The forum provides attendees with avenues to discover how they can get maximum access to capital as well as fosters creative entrepreneurial thinking about healthcare.

SCH financial professionals will be on hand for one-on-one meetings with HCap attendees to discuss how SCH's Medical Accounts Receivable (MAR) Funding program can serve as a debt-free funding solution.

With MAR Funding, healthcare providers can count on immediate and predictable cash flow without having to worry about tying up other assets or increased interest rates.

Using the Computer to Manage the Elderly and Chronically Ill Health Problems

noreply@blogger.com (Jenny) — Tue, 11 Nov 2008 17:00:00 +0000

A recent review focused on ways to motivate the elderly and chronically ill to use computers in order to learn how to better manage health problems.

It focused on health IT systems where patients or consumers interact with the technology and receive patient-specific information in return. These include home monitoring systems with interactive disease management or self-management technology, educational or decision aid software tailored to the patient's needs, online patient support groups, tailored health reminder systems where interactions are linked with personal health records, and patient-physician e-mail systems.

The elderly were defined in the study as those with a mean age greater than 65 years; the chronically ill as those with conditions such as diabetes, asthma, heart failure, chronic obstructive pulmonary disease and mental illness; and the underserved as minorities, low-income populations and those living in medically underserved geographic regions.

The review was directed by lead investigator Holly Jimison, Ph.D., an associate professor of medical informatics and clinical epidemiology, OHSU School of Medicine.

What will motivate the elderly, the chronically ill and the medically underserved to use interactive information technology systems to actively help manage their own health problems?

The Presidential Election and Your Medical Reimbursements

noreply@blogger.com (Fred) — Tue, 04 Nov 2008 20:45:00 +0000

Once you read this article, you will no doubt know the result of the Nov. 4th presidential election. However, the medical business is the medical business! Under either administration, attempting to lower the budget deficit will first involve reimbursement reductions. Once again the medical provider will bear a significant portion of the expense toward a lower federal debt.

Neither candidate has discussed reducing the size of governmental healthcare so healthcare will still be cumbersome at best...and....if government decides to "mess with" the existing system, one can be confident to anticipate more delays, and overall less efficiency. Is this year's election unique when considering healthcare? Not really!

We have now seen the credit market virtually disappear as shown in The Wall Street Journal article dated November 4th, 2008. Medical Accounts Receivable (MAR) Funding is truly the answer for increased cash flow and funding growth/expansion to your medical practice or business. Increasing your services or products, funded by your existing and future medical claims (A/R), can mitigate decreased reimbursements by eliminating the waiting time to receive payment, without the "help" of financial institutions currently in gridlock. It also allows the provider to build a new line of services or products previously unaffordable if not for MAR Funding. A medical provider of any kind, with a continual flow of Medical Accounts Receivable as well as an existing bucket of receivables awaiting payment, can literally use the payments due tomorrow, to fund new business opportunities today. This is a real, and highly effective solution. Think about it!

Will Technology Cure Health Care — Or Kill It?

noreply@blogger.com (Jenny) — Mon, 03 Nov 2008 15:24:00 +0000

Obama has said that technology will save health care. Information technology is quickly becoming a medical resource: Google recently launched an online medical records service that claims online searches is where consumers turn first for health information.

Computerization can eliminate as much as 30 percent of medical costs that are due to inefficiency, according to Dr. Dean Ornish, founder of the nonprofit Preventive Medicine Research Institute. And advanced diagnostics will encourage prevention and reduce costly reactive treatment. Thanks to technology, such diagnostics are now within the reach of consumers. As more people test themselves, doctors and insurers may face the additional burden of just-in-case surgery and a “previvor” mentality. So, will new technology cure health care, or kill it?

Hospitals Move To Cash Investments As Short Term Pressures Mount

noreply@blogger.com (Kim) — Tue, 28 Oct 2008 14:38:00 +0000

Under pressure from the troubled economy, hospitals are turning to their investment cash flow as a source of capital, according to a recent article in Healthcare Finance News.

Despite reimbursement delays and decreased revenue, hospitals and healthcare systems must still support costly healthcare information technology, facility upgrades and maintenance. As a result, they have focused on rebalancing their investment portfolios.

However, Sun Capital HealthCare (SCH) offers a debt-free funding program for hospitals and healthcare providers that serves as an excellent source of working capital in order to meet their financial demands.

SCH's Medical Accounts Receivable (MAR) funding program can be used as a strategic funding tool in order to:

Accelerate cash flow by turning receivables into working capital
Alleviate fiscal stress with an immediate infusion of cash

Realize cost savings from vendor discounts and other operational improvements

Protect credit ratings by making the balance sheet healthier

Improve ROI's of capital programs by financing deferred projects at today's costs and seeing the benefits sooner

Generate new revenue streams by quickly responding to market opportunities without lengthy credit applications

BASEBALL and HEALTHCARE

noreply@blogger.com (Anonymous) — Fri, 24 Oct 2008 18:26:00 +0000

The Oct. 24th issue of the New York Times has an interesting article "How to Take American Health Care From Worst to First." In it the authors, Billy Beane, Newt Gingrich and John Kerry, note how the big payroll baseball teams are not in the World Series while the team with the second lowest payroll is. They attribute this to the fact that Tampa Bay uses a data-driven approach to decisions rather than the traditional approach that was based on a manager's experience and a few statistics.

The authors cite several examples that support their argument that "a health care system that is driven by robust comparative clinical evidence will save lives and money." Many other observers are also pushing an analagous approach to healthcare by emphasizing that quality of outcomes can be greatly enhanced with the use of technology, not just in new diagnostic and drug discoveries, but in communications and measurement of results to reduce human error and analyze what treatments do and do not work. Of course, a major issue in moving towards this type of approach to medicine is how will the technology be paid for, especially by the smaller hospitals and speciality services. One solution to this financial conundrum, especially with today's liquidity crunch, is through a medical accounts receivable funding program from Sun Capital HealthCare. Sun's program transforms a provider's medical receivables from a non performing asset into a cash flow solution to reimbursement delays that is not subject to the wild swings of today's credit markets.

Healthcare is like baseball in other ways as well. While the researchers and device makers often seem to be trying to hit a home run [so their stockholders can earn a return], in many ways 'small ball' can yield a better result. Reducing obesity, getting more exercise, good eating habits and focusing on prevention is a lot less costly in the long run and a lot healthier, both for the patient as well as the healthcare system.

Technology in Medicine - Emerging Trends

noreply@blogger.com (Jenny) — Wed, 22 Oct 2008 13:25:00 +0000

One of the paradoxes of increasingly powerful computer-based technologies is the declining cost and a hold out in hopes of reducing healthcare costs in future. An example of a up and coming developing new technology is the Smart Intensive Care Unit .

In an Intensive Care Unit (ICU) , heart rate, blood pressure, blood flow and other measurements are carried out routinely. The analysis of these parameters is quite time consuming for the puposes of analysis and continuing therapy. In an ICU setting, there could be wide variations of the patient's vital signs and it is critical for the nurse or doctor to be alerted quickly for deterioration of the patient's condition.

The relatively new introduction is the " Smart ICU" which contains a neural network operating on " fuzzy logic" - in simple terms this is a method to represent mathematically vague and imprecise human measures such as " almost", " very" and " quite far away" which cannot traditionally be designed in digital systems, which operate on "on-off" conditions.

It will be a major challenge for healthcare providers to keep abreast of these emerging new technologies and methods, training in their use, and budgeting for their acquisition.

HEALTH CARE REFORM

noreply@blogger.com (Anonymous) — Wed, 15 Oct 2008 21:55:00 +0000

"Growing Health-reform Challenge For Next President" is the title of an article on yahoonews.

The author, Kevin Freking, discusses primarily the challenges of cost and coverage reform rather than the credit crunch in the financial markets. He aptly notes that there is a long history of failed health reforms and that the job has only gotten tougher with the financial meltdown.

Financial services companies, such as Sun Capital HealthCare, which provides debt-free funding resources to healthcare providers and suppliers, can only do so much for the industry. While cash-flow problems stemming from reimbursement delays from third party payors and the government can be mitigated by Sun's "cash flow solution to working capital needs, the underlying problems of the industry remain: a poor allocation of healthcare resources, a lack of emphasis on prevention, an aging and more obese population which will lead to greater need for healthcare resources, growing malpractice insurance premiums driving doctors away from practice, etc.

If we believe that a healthy populace is a desired goal of this country, both from the point of view of consumers of the goods and services that this nation produces and as users of healthcare services, then the whole delivery system of healthcare needs to be re-engineered, including pharmaceutical discovery and manufacturers, medical device development, and providing of medical treatment. A holistic approach needs to be incorporated, using modern management techniques, so that the national investment in healthcare is productive.

Without Reform, a Health Care Bailout May Be Needed

noreply@blogger.com (Kim) — Tue, 14 Oct 2008 20:08:00 +0000

At this year's 23rd Cerner Health Conference, Neal Patterson, CEO of Cerner Corp., pounded home the message that a health care bailout may soon become a reality.

According to Patterson, with costs escalating, the health care industry could very well be headed for a crash that could mirror - or dwarf - the $700 billion Wall Street bailout.

"The Wall Street bailout is a one-time number," Patterson said. "To bail out health care, it is not a one-time fix. When the bailout comes...it's going to be a very gloomy day."

He predicts that some hospitals and health organizations eventually may quit honoring government reimbursement programs - he used Medicare as an example - because the programs do not cover the costs of providing the service.

Sun Capital HealthCare, Inc. to Exhibit at Medtrade Fall 2008

noreply@blogger.com (Kim) — Thu, 09 Oct 2008 19:18:00 +0000

Sun Capital HealthCare, Inc. (SCH) will exhibit at Medtrade Fall 08 from October 28 - 30, 2008 in Atlanta, GA.

Medtrade Fall is the largest international tradeshow dedicated to the home medical equipment (HME) and durable medical equipment (DME) industry. Thousands of professionals in the industry gather together in search of products, technologies, and services that will increase their operational efficiencies and their bottom line.

SCH will have financial professionals on hand at Booth 2163 to share with HME/DME providers how SCH's Medical Accounts Receivable (MAR) funding program can accelerate cash flow and make their balance sheet healthier whether in growth mode or fiscal stress.

Sun Capital Group Exhibits At the Turnaround Management Association's Annual Convention

noreply@blogger.com (Kim) — Wed, 08 Oct 2008 21:11:00 +0000

Sun Capital Group, Inc. (SCG) will offer an alternative funding solution at the Turnaround Management Association's (TMA) annual convention on October 27-29, 2008.

TMA is the premier professional community dedicated to corporate renewal, turnaround management, restructuring and distressed investing industry.

SCG financial professionals will be on hand at Booth 221 to share with TMA professionals how SCG can be a strategic funding source when they are in both preventative and reactive client counseling modes.

SCG's accounts receivable funding program provides an alternative funding solution that accelerates cash flow and makes a company's balance sheet healthier.

How Do These Economic Conditions Affect My Medical Business?

noreply@blogger.com (Fred) — Tue, 07 Oct 2008 17:42:00 +0000

What are the boundaries of our recent economic catastrophe? Unfortunately, the answer tells us the boundaries are endless and there is no immunity to this financial holocaust.

Medical providers have seen (or very shortly will see) payment intervals begin to extend from all carriers. Starting with government payors, we see California and Illinois not paying for services or equipment already rendered. Other states will undoubtedly follow in the same pattern. State revenues are coming to a screeching halt with decreased tax collections, no ability to borrow in the short term and increased demand for municipal and governmental services. The federal government just committed to a $700 billion bail out of our financial institutions. One must immediately assume that, as in the past, federal reimbursements will decrease in dollars paid, and become significantly protracted.

Commercial carriers have significant exposure to the current financial woes through their investments in mortgage backed securities and derivative instruments. Logic tells us that delayed payments provide "float income" which can offset, although minimally, some of their losses. Not a pretty picture for the medical community. Solutions are few, as conventional lenders are not in that business as of now!

Medical Accounts Receivable (MAR) funding is truly the only solution. The modest discount paid for this service is worth the expense. MAR funding provides a predictable steady cash flow and up-front capital to fund infrastructure additions designed to generate additional income through additional services or products. It is the only game in town...and....coincidentally the best solution for the medical community.

Margins Squeezed? Here's Where to Find Operational Efficiencies

noreply@blogger.com (Kim) — Mon, 06 Oct 2008 21:03:00 +0000

The current economic downturn has caught many businesses in an unanticipated margin squeeze. Healthcare organizations are no exception, with the impact being felt from the declining value of investment portfolios, reduced access to capital, increasing supply costs, and a rising proportion of uninsured patients.

Per an article in HealthLeaders Media, there is something organizations can do to ensure they are generating the margin necessary to fund future operations and investments. A margin improvement audit.

When determining a margin requirement, your target margin should be an operating margin that is sufficient to meet your board's financial performance expectations and fund future capital requirements.

In addition to operating margin, operating cash flow and existing debt service along with other sources and uses of cash should be considered. Medical Accounts Receivable (MAR) Funding is a financing tool that can generate opportunities to reduce operating expenses, increase cash flow, and boost revenue.

With MAR Funding, cash flow can be accelerated by turning receivables into working capital. Operational improvements can be attained by realizing cost savings from vendor discounts with the immediate cash generated through MAR Funding. Also, new revenue streams can be created by having the up-front debt-free cash needed to quickly respond to market opportunities as they arise.

State Medicaid Programs for Long Term Care

noreply@blogger.com (Jenny) — Wed, 01 Oct 2008 18:03:00 +0000

State Medicaid programs will spend $1.6 trillion on long-term care in the next twenty years.

Medicaid spending for long-term care will grow at a faster rate than overall health care spending, faster than Medicare, and faster than the national Gross Domestic Product.

"This report shines a spotlight on the need to better prepare for long-term care expenses and to explore ways to provide consumers with greater access to home and community based care options," said Karen Ignagni, President and CEO of AHIP. "Many Americans underestimate their risk of needing long-term care, underestimate the cost of care, and many erroneously believe they have long-term care coverage."

States with the highest projected expenditures over the next twenty years includes New York ($271 billion), California ($230 billion), and Pennsylvania ($104 billion). States with the fastest growing Medicaid long-term care expenses are Alaska (7 percent), California (6.4 percent), and Arizona (5.9 percent).

Can America's Perverse Payment System Be Fixed?

noreply@blogger.com (Anonymous) — Fri, 26 Sep 2008 14:10:00 +0000

Mark Taylor, in the Sep. 26, 2008 issue of Hospitals & Health Networks magazine, asks this question in his article "Experiments in Payment". In it he discusses several new experiments in revising the payment system that are attempting to mitigate the current system, which he calls "a mess." As he and others see it, the current method provides little incentives to hospitals, physicians and other providers to work together, which in turn leads to overuse and duplication of services, as well as often neglecting preventive services and chronic disease.

The overriding principle in these experimental payments systems is to provide financial incentives based on quality measurements. But how do you measure quality? Is it strictly what happens during the patient stay, or thirty days after discharge, or 6 months after discharge? If your incentives are based on post-discharge results, how do you adjust if the patient does not follow the post treatment plan the physician or hospital designated? And if you bundle payments, how do you allocate the payment to the various providers? All tough questions.

While there is no question there needs to be remedies to the current payment system to provide incentives for delivering quality treatment, there is more important problems to address to get control of the healthcare system. First and foremost, preventive medicine must be emphasized. Political leadership, both in the public and private sectors, needs to get on the bully pulpit to drive this message and dollars must be invested to back up this message and change behavior.

Fraud must be reduced and the system must be redesigned so that malpractice considerations and insurance companies are not driving medical practice, which often includes unneccessary tests and procedures, which further increases the risk to the patient. We need to get some control over medical and pharmacutical research by addressing the question - at what point do we spend billions of dollars to add one or two months of life expectancy?

Healthcare reform has to be re-engineered from top to bottom. Experiments in the payment system are only one small step in the process.

Home Remote Patient Monitoring

noreply@blogger.com (Jenny) — Wed, 24 Sep 2008 13:58:00 +0000

The home remote patient monitoring sector of the healthcare industry is an emerging market that suffers from a lack of reimbursement policy support. However, despite such obstacles, several key growth trends will counteract negative factors and lead to strong definitive growth.

Successful exploration and implementation of new payment strategies focus on bottom-line cost savings. In addition, new market participants are expected to increase demand and the need for home remote patient monitoring services in the near future.

GE Healthcare, a business of General Electric Co., is entering a potential $5 billion market providing health monitors for the elderly who live alone.

What Type of Third Party Claims Do Not Qualify for MAR Funding?

noreply@blogger.com (Fred) — Tue, 23 Sep 2008 19:49:00 +0000

To determine if a medical provider can qualify for MAR funding, the focus must not be on the provider's services or goods, but must always look toward "who the payor is." We should examine the qualities of a payor that qualifies for MAR funding first. Examples of such companies are Aetna, Cigna, United Health, Blue Cross/Blue Shield, GHI Medicare (gov't) and Medicaid (gov't).

What makes these companies appropriate for MAR funding? These insurance companies have: 1) contracts with providers and therefore are directly paid by the carriers

2) pay "out of network" reimbursements to those patients who use providers that are not "in their plan." BUT...in all cases, they carry medical coverage which has virtually limitless patient funding amounts, and are not contingent upon legal outcome or compensation-board approval.

So we ask, is a Chiropractor (for example) able to use MAR funding? The answer is YES...however, that provider can only sell the claims of "traditional" type carriers as exemplified above. Unfortunately, Chiropractors usually have the majority of their payors as workers compensation or personal injury carriers. These cannot be MAR funded as the payment has a contingency on it, and there is no contract, or obligation to pay until such adjudication is reached. Suppose the Chiropractor is predominantly paid by Medicare, then we have a MAR funding opportunity.

The case can be made however, that personal injury carriers are insurance companies, and therefore can be used in MAR funding. Correct, however the contracts under which patients get reimbursements are auto or casualty contracts, and not medical coverage, refuting that theory.

Suppose a provider has both traditional carriers and some workers compensation/ personal injury, will the MAR funding company entertain that kind of provider? Yes! The MAR funding company will purchase only those claims paid by the traditional payors!

To see if you qualify for MAR funding...look to the payor!

Sun Capital Group, Inc. Honors Employees

noreply@blogger.com (Kim) — Mon, 22 Sep 2008 20:23:00 +0000

Sun Capital Group, Inc. (SCG) recently awarded their 5-year to 10-year employees with a special gift to celebrate their dedication and commitment to the company.

22 employees received brass pins with white stones symbolizing the number of years each employee has been with SCG.

To date, SCG has funded billions of dollars of accounts receivables for their clients in the commercial, government and healthcare industries.

SCG clients utilize SCG's accounts receivable funding programs to generate an immediate cash infusion and reduce dependency on debt-incurring bank loans and lines of credit as their sole source to obtain working capital.

Doctor Owned Hospitals

noreply@blogger.com (Anonymous) — Thu, 18 Sep 2008 18:58:00 +0000

"Doc ownership takes a legal hit" is the title of an article posted on 9/15/08 at Modern Healthcare.com. It has an interesting discussion of the legal issues involved in the on-going competition between physician owned hospitals and competing hospitals.

The decision to dismiss a suit against Baptist Hospital in Little Rock by a group of physicians who own a competing cardiology clinic was based on a technicality. Nonetheless, the issue is continuing to create debate within the healthcare community nationally.

In my opinion, doctors should be doctors, not owners of hospitals, for several reasons.

The potential conflict of interest when the doctor admits a patient to a facility. Does the doctor's facility provide the same level of service as the competing hospital? Will it have the same degree of emergency facilities immediately available if there is a problem? Will the financial incentive of admitting the patient to the doctor's hospital override the possibility that the competing hospital will be better for the patient? Not easily answered questions are they.

The most likely groups of doctors who would open hospitals would be the specialists who have the most profitable practices. Consequently, they would siphon off most of the profitable patients from the competing hospitals, leaving those hospitals with a patient mix that will bring additional financial burdens.

It is hard enough to run a healthcare facility with all the challenges, fiscal constraints and competing demands of the healthcare industry - just ask any hospital CEO - without having the extra burden of managing a hospital that could conceivably make them less effective doctors.

The healthcare industry - the challenges never end!

Congress, AMA Mull Better Ways for Medicare to Pay Doctors

noreply@blogger.com (Jenny) — Wed, 17 Sep 2008 13:39:00 +0000

Congress, AMA Mull Better Ways for Medicare to Pay Doctors.

The way Medicare pays doctors is a mess. Every year or so, an automatic pay cut looms, and Congress scrambles to come up with a last-minute, temporary patch to block the cuts. The most recent scramble ended in July, when Congress overrode a presidential veto to pass a patch that runs through the end of next year.

Everybody knows this is a silly way to run things, but nobody’s managed to come up with a better alternative. At hearing in Congress yesterday, a few key players tried to move in that direction.

Several key figures are trying to make some changes.

Miami Physicians Confess to Scam Medicare of $6.8 Million

noreply@blogger.com (Kim) — Mon, 15 Sep 2008 20:16:00 +0000

Miami physicians Carlos Contreras and Ramon Pichardo pled guilty last week to defrauding the Medicare program in connection with a $6.8 million HIV infusion fraud scheme.

Contreras admitted that, from November 2002 through April 2004, he conspired with others to submit approximately $6.8 million in fraudulent Medicare bills, he signed documents containing false information about treatments purportedly given to HIV-positive patients and he approved medically unnecessary treatments at CNC.

He also admitted that the clinic received approximately $4.2 million from the Medicare program as a result of his and his co-conspirators' conduct. In November of 2002, Contreras entered into an agreement with Carlos Benitez, Luis Benitez, Thomas McKenzie, Pichardo and others to operate CNC as a fraudulent HIV infusion clinic.

According to federal officials, Contreras admitted that the Benitez brothers would refer HIV-positive Medicare beneficiaries to the clinic, provide staff members to work at the clinic and transport patients to CNC in exchange for a substantial share of CNC's profits.

In addition, they said, Contreras was aware that the patients referred to CNC by the Benitezes were paid cash kickbacks in exchange for visiting the clinic and allowing their names to be used to bill the Medicare program. He also agreed to approve expensive and medically unnecessary HIV infusion claims at the clinic, and to falsify medical records.

THE CHALLENGES FOR NON-PROFITS

noreply@blogger.com (Anonymous) — Thu, 11 Sep 2008 15:50:00 +0000

"A variety of emerging or intensifying factors threaten the future performance and credit quality of the nation’s not-for-profit health care system. Growing concerns include “unquenchable demand” for health care services and related growth in new health care technology and health care costs, the sustainability of managed care rate increases; the slow erosion of employer-based health insurance; reductions in Medicaid eligibility and reimbursement; the growing burden of rising bad debt and charity care; the government’s long-term ability to adequately fund Medicare without future reductions; and the availability of an adequate and affordable labor supply."

The above statement from the 'Environmental Scan' in the current [9/11/08]issue of H&HN magazine paints a foreboding picture for non-profit providers of healthcare. Demand for healthcare is increasing due to increasing demographic trends while the costs of developing new technologies, medications and operational costs for delivering those services are also increasing. Coupled with the financial pressures on Medicare and reimbursement cuts, it is apparent that the healthcare system is in crisis.

Where will the capital that is needed to address these issues come from? As the article indicates, performance determines the quality and amount of credit. And banks are reluctant to lend money when financial performance [profitability and balance sheet ratios] does not conform to their expectations and willingness to accept risk [the exception being the subprime mortgage market...but that is another story]. And since equity is not a viable option for non-profits, the delivery of healthcare to the most vulnerable segments of the population is at risk. Non debt or equity financing, such as that provided through Sun Capital HealthCare's Medical Accounts Receivable funding program, is a tool to both increase working capital and reduce the financial impact of cash flow problems resulting from reimbursement delays. Even though Sun Capital has kept the lights on and doors open for facilities in fiscal crisis, as well as provided the means for hospitals to grow, until the issue of rising costs is adequately solved, the scary prognostication outlined above will continue.