Two ways out

One of our loyal readers has been encouraging us to write about this:

One of the stories that the people responsible for getting us into the mess with the children’s hospital are telling is that the government reimbursement rates changed after they did their planning.

Any and everyone in the hospital business should have seen this coming.  Hospital costs had been spiraling out of control for years and in the 2007 time frame the talk of the industry was about how much the hospitals were going to be cut.

Even more damning is the fact that the government is in the habit of telling us about their proposed changes months in advance of making them.

Here are just a few examples of those notifications:

The Thursday, November 1, 2007 testimony of the director of CMS before congress.

An industry warning dated July 1, 2007:

Start preparing for October when reimbursement rules change

Another industry warning dated July 12, 2007:

Reimbursement Changes on the Horizon

Two choices

The people who did this to us can only have one of two possible responses.  They might say “We didn’t know” but they should have.  The might say “We chose not to tell you” which is probably closer to the truth.

We deserve better



4 Responses to Two ways out

  1. Reality Checker says:

    Escobar has said she will NOT vote against the proposed UMC budget just because she might disagree with one line item. She said that in response to being asked about the proposed bonuses for Valenti and team. Draw your own conclusion.


  2. Sam says:

    Words in the street is that UMC failed to renegotiate all the service contracts and the “rent” despite having a clause to renegotiate in case changes in governmental reimbursements.

    UMC wanted hard cash to cover to the huge losses that clinic are having. Mr V wanted to suck dry EPCH to hide all his bad financials.

    If a good faith negotiation should have taken place when the changes came into effect, none of this would have happened.

    Just another exampl of Mr. Valenti greed and ambition.


  3. Reality Checker says:

    Regardless whether they knew in 2007, Valenti and the county knew before EPCH opened its doors that there were problems. UMC essentially put together the financial plan that EPCH execs had to live with …. a plan that was not reasonable or achievable.

    I posted the following on March 5th. The documents referenced below and similar documents have subseqently been removed from UMC’s public server.


    These following two excerpts from UMC board finance committee minutes also provide some insight into how Valenti and UMC hand a hand in the development of the CH pro forma and the budgeting for CH, particularly the budgeting for reimbursements to UMC. The second excerpt shows that UMC’s investment committee actually chose to operate as a bank four years ago, lending operating funds to CH and charging interest on those funds. Since some of the monies loaned to CH would eventually flow back to UMC, I am scratching my head trying to figure out how this is different from a Ponzi scheme. Does UMC’s charter allow it to make loans?


    “Mr. Valenti explained that they have been working hard to get the Children’s Hospital Pro Forma updated and the impact this will have on UMC. Mr. Westfall has been here over the past week meeting with department managers to assess volumes and expenses.

    The goal is to put together a budget for 2012 while also working with Mr. Gjerset and Mr. Ramsey on the UPL and DSH models for the Children’s Hospital. Mr. Valenti added that there are things that are now known versus what was known in 2007 such as the current economy, the Health Reform and its implications, the Texas shortfalls. The DSH dollars for new Children’s Hospitals has a trailing 24 months period for reimbursement of the expenses. There is also the hematology/oncology package that was not included in the initial assessment done of the systems that would be required for the Children’s Hospital that would need coverage however it was not budgeted.

    There are more physician salaries than in the original Pro Forma and how to count that as cost based reimbursement. They are looking at individual physician specialties to be moved out further. This information has been provided to the Children’s Hospital. Mr. Nuñez added that once the Children’s Hospital Pro forma has been finalized he would be able to apply that information and update the District’s pro forma and present this at the December P&D meeting.


    “Mr. Valenti stated that Mr. Duncan and Mr. Mier of the Children’s Hospital have been preparing a chart for each of the major areas from regulations to medical staff, etc. with dates until the opening of the hospital. This provides a roadmap for his board to follow and assess of which Mr. Valenti is a member of a committee, set up as well as Ms. Mary Lou Camarena and Ms. Rosemary Castillo.

    A template of the 8 areas will be brought next month to this committee as it has a date and time for implementation of the different actions required. Mr. Valenti added that during discussion at the Investment Committee it was agreed to request that the Children’s Hospital pay 4.8% interest on the funds that are forwarded to them for operations. This is the current lending rate for the bond and it will be incorporated into the contract with that entity. Mr. Sosa added that they are working with Ms. Vogel on the different areas and there is no timetable available for when the contract will be drafted.

    There was additional discussion on the pro forma and Mr. Nuñez noted that as a result of discussion at the P&D Committee and the volume forecast will be amending the previous version of the pro forma. For FY 2012 they will be proposing flat volumes somewhat similar to what they have been for the past 11 months. They will begin to show growth in volumes in years 2013-2015.”


  4. At the same time we had a governor who hated everything to do with the ACA to the point that he refused to participate at the State level, and that had a huge impact on reimbursement for Medicaid services. (That was another area where they “anticipated” income that ever materialized, no?)


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