Balance sheets force Hillcrest room rate hike

McCOOK, Neb. -- Citing nearly a half million in past-due balances, along with rising vendor costs and payments due to Medicare, Hillcrest Nursing Home will raise room costs in July.

The Hillcrest Board of Trustees unanimously voted recently to increase room rates by $12 per day at the beginning of the fiscal year that starts in July, with the potential of another $12 increase in six months. Hillcrest is owned by the county but operates on its own revenue.

The last time room rates were increased was November 2013, when rates were increased by $6 per day.

Hillcrest administrator Colinda Nappa told the board at April's trustee meeting that more than $500,000 is owed to the facility from about 20 residents behind in their bills.

Nappa said once a resident or the responsible party for a resident is behind in payments, the facility sends letters to try to collect the debt.

Hillcrest staff also offers the resident or responsible party assistance in applying for Medicaid or state assistance. In addition, the Hillcrest's collection policy also includes notifying Social Security and adult protective services of non-payment of a nursing home bill.

After all attempts are exhausted, Hillcrest tries to find a safe placement for the residents and discharge them, Nappa said. But if a safe placement cannot be found, the resident must remain in the nursing home.

Currently, when a resident is admitted, insurances are verified and a pro-rated bill is presented, she said. Nappa is working on a more detailed admissions agreement and financial worksheet for new residents when admitted.

Finances were strained again in April when Medicare determined that its reimbursements to the facility for 2013 and 2014 were too high and required repayments totaling $200,000.

Regarding vendor expenses, Nappa told the board that costs have increased by three to five percent, with many vendors now including fuel surcharges of $250 to $500 per delivery.

In addition to raising room rates in July, other steps Hillcrest has taken to trim the budget include:

* Hiring enough full time nurses to eliminate using nurses from an agency. Agency nursing was costing the facility about $50,000 per month and in busy months, up to $80,000 per month, Nappa said. Agency nurses have a higher hourly wage as the agency gets a part of the wage, she said. Costs also included mileage and housing.

* Reduced over-staffing in some departments. Employees in nursing and administration are in line with industry standards, Nappa said. In four other departments, employees are now working 7.5-hour instead of eight-hour shifts. In another change, nurses for the past three months have worked 12-hour shifts instead of eight-hour shifts, which means only two nurses instead of three must be present in a 24-hour-period, she said. Nurse will vote on Wednesday if they want to continue 12-hour shifts. Nappa said that staffing is being adjusted depending on the number of residents.

* Nappa told the board at its May meeting on Tuesday that instead of paying $175 per week for a company to mow the lawn, the facility is now doing it themselves, at a labor cost of about $90.

Despite the recent unexpected costs, bond and loan payments are up-to-date, Nappa said Tuesday, with a $220,000 payment recently paid on the $1 million loan Red Willow County borrowed on behalf of the nursing home in 2012. In 2012, the interim administrator prior to Nappa, and board trustees, asked the county for the loan to pay for payroll and other expenses, as Medicare was not billed for several months. Red Willow County Commissioners authorized a $1 million loan from McCook National Bank for five years at an interest rate of 3.55 percent.