Board Member Ben Cundiff said that the hospital reached the limit with its original credit level after a shortfall in payments from Medicare. He said that the hospital borrowed the money to pay suppliers and vendors to maintain a professional image with them. “The bottom line is that we need to provide good management. We worried that because our local and non-local suppliers have no interest in Medicare’s problems. Right or wrong, we felt the best way to fix the problem is to expand our line of credit and clear up our expenses. It doesn’t make us owe more, rather we have to pay our creditors rather than our suppliers. It’s more professional that way and does not aggravate our suppliers.”
Cundiff added that Medicare and Medicaid provide up to 65 percent of the hospital’s revenue through reimbursements for treatment.
Chairman of the Board Mike Gross said, “Most hospitals work with a safety net with their cash on hand. They try to keep an excess of 10-20 days worth, but we have about two or three days- basically no safety net. The money is in the pipeline.” He said that the hospital needs the safety net in the form of a line of credit. After meeting the limit of the first line by borrowing over $130,000, Gross said that the hospital extended to $750,000 for future situations. He said that the hospital has received some payments due, with more on the way.
“This is not the first time we’ve had to borrow, and probably won’t be the last time,” said Gross. “We have to make a projection on what we can pay down, and make the payments so it will be available in the future.”
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