COMMITTEE ON BUDGET AND APPROPRIATIONS

MINUTES - OCTOBER 15, 1997

1:00 P.M.

B&A MEMBERS: Wishnie, Young, LaMotte, Abinanti, Darcy

OTHERS: C.E.’s Office: Gina Angiulo-IGR; WCMC: Fred Miller, Mike White; KPMG Peat Marwick: Jim Martell; Budget Dept: Joe Phelan; CBAC: George Hosey, Barbara Strauss; LWV: Anne Nelson, Jo Brill; Finance Dept: Commissioner Langeloh, Phil Speziale-Director of Payroll/Benefits; Segal Companies: Larry Singer; BOL: Legislator Stewart-Cousins, Legislator Carsky, Robert J. Boland-Budget Analyst, Glenn Guzi-Program Specialist, Pat Gorski-Clerk, Don Sandford, Deputy Clerk, Tina Seckerson-Secretary to Committee

Co-Chair Wishnie called the meeting to order at 1:24 p.m.

On motion of Legislator LaMotte, seconded by Legislator Young, the motion to approve the Minutes of October 6, 1997 and October 8, 1997 was carried by a vote of 3-0. (Legislators Abinanti and Darcy out for vote)

• Mr. Miller stated that the auditor, KPMG Peat Marwick was chosen through the County’s RFP process.
• According to Mr. Martell of KPMG Peat Marwick, there were no material flaws found in the audits of WCMC or RTI for 1996.
• Mr. Miller stated that obviously the biggest thing coming down the pike for WCMC and RTI is the Public Benefit Corporation (PBC).
• WCMC’s accounts receivable have grown considerably during 1996. According to Peat, Marwick, WCMC needs to improve its collection process.
• Mr. Wishnie asked for an explanation of the $25 million lag in accounts receivable. Mr. Miller stated that $13 million is attributable to a lag in third party payments, particularly from managed care providers. He further stated that the portion of the $25 million considered uncollectable will be offset with such things as bad debt and charity contributions from the state, partial payments and professional recovery efforts through the Law Department.

COMMITTEE ON BUDGET & APPROPRIATIONS

MINUTES - OCTOBER 15, 1997

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• Mr. Abinanti asked how accounts receivable would be handled by the PBC. Mr. Miller explained that since the County will continue to be the source of capital for the PBC in 1998, it would collect all receivables due WCMC/RTI. Beginning in 1999, the Corporation would be the beneficiary.
• Mr. Boland stated that the County should not be responsible for compensating balances/retirement plan contributions for the Medical Center and RTI employees for 1998. Mr. Miller responded that in 1998 the financial structure between the County and WCMC/RTI would be similar to previous years in that that County would still be capitalizing WCMC/RTI operations. In 1999 the PBC would pick up annual retirement contributions for current employees while the County would be responsible for the cost of retirees’ benefits as those individuals are the retirees of the County and not the PBC. Mr. Boland disagreed stating the responsibility should remain with the Medical Center and RTI.
• According to Mr. Miller, the County obligations to the Medical Center after January 1, 1998 will be:

1. County guarantee-bonding-working capital
2. Contribution for first year - after that we will be billed for services rendered
3. Health insurance - $5,000,000

• Mr. Abinanti inquired as to why the County is being used as a "guarantee" instead of a "bank"? Mr. Miller responded that it has to do with traditional County TANS.
• Mr. Abinanti asked what the Medical Center’s lost revenues for 1996 were attributable to. Mr. Martell responded that $7 million was due to the loss of Corrections payments, $3 million was due to other smaller shortfalls. He further explained that these were offset substantially by the approximate $13 million in increased revenues from the expanded medical/surgical cases, resulting in a $ 4 million revenue shortfall.
• RTI: loss of patient occupancy & patient days for 1996 due to:

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MINUTES - OCTOBER 15, 1997

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• Commissioner Langeloh provided details of the RFP process which lead to the selection of POMCO as the administrator of the County’s self-insured medical benefits program. Of the 12 vendors who were sent RFP information, only 3 responded by the due date and were evaluated by the County’s consultant, the Segal Company. POMCO and another firm were named as finalists. The consultants recommended POMCO. The County’s subcommittee (representatives from Budget, Finance and WCMC) agreed with the consultant’s recommendation.
• Legislators Stewart-Cousins and Abinanti stated that there have been various complaints from employees and the unions with regard to POMCO’s services.
• Mr. Boland stated that the auditors reported that there had been several months lag in POMCO’s payments to providers. Commissioner Langeloh acknowledged that POMCO has experienced some delays in processing claims in 1996 because they were converting to a new computer system. He stated that it was a unique situation and there has not been a repeat of the problem in 1997.
• The Commissioner reminded the Committee that POMCO neither holds the County’s funds, nor does it actually make payments, the Finance Department serves both of these functions while POMCO merely provides the administrative functions.

There being no further items for discussion, on motion of Legislator Abinanti, seconded by Legislator LaMotte, the meeting was adjourned at 3:08 p.m.