A settlement has been reached between Clinton County and RegionalCare, the current owner of Clinton Memorial Hospital, on a claim from the first year’s escrow payment.
Both entities have agreed that RegionalCare will receive about $162,241, and the year one escrow payment of more than $2.6 million will be released to the county.
As a result of the hospital’s closing, the county receives annual $1.7 million deferral payments and a total of $15 million in escrow payments. However, the first escrow payment has been held.
RegionalCare sent the county the claim notice in October 2011 disputing several issues. Among the items in the settlement are COBRA (public) insurance claims, in the amount of $74,832, and Recovery Audit Program Contractor claims, in the amount of $87,408. Both liabilities were anticipated, but it was unknown what the amount would be, said Assistant Prosecutor Andrew McCoy.
Since the hospital transferred from a publicly owned to privately owned entity, the employees also transitioned from public to private health benefits package. Some employees may not have transferred for various reasons, and the county is responsible for continuing to make the employer’s contribution. Per law, the county must continue to pay a premium for either a period of 18 or 36 months, depending on situation, or until the individual is under other insurance.
The Recovery Audit Contractor (RAC) program identifies improper Medicare payments — both over-payments and underpayments — in all 50 states. It also uses proprietary software programs to identify potential payment errors in such areas as duplicate payments, fiscal intermediaries’ mistakes, medical necessity and coding. RACs also conduct medical record reviews.
There could be pending RAC issues in the future as they are not uncommon, McCoy noted, adding that the settlement applies to only any identified claims.
“We’ve anticipated that in future there will be additional RAC issues, but we’re optimistic those will be limited in number,” he said. “The further along you go, the less likelihood of identifying major liabilities.”
Both parties also agreed to engage a third party consultant to evaluate the settlement, and sample files and cases.
“I think it’s fair and reasonable,” McCoy told commissioners Monday. “It identifies what we’re liable for, and what we’re not liable for.”