Jackson Health won't collect $310 million in patient charges

While hospitals often sell off old, uncollected bills, giving away billings that a hospital never tried to collect on is highly unusual.

Then there's Jackson Health System, which consists of six hospitals based in Miami. The system will not collect $310 million in billings due to hospital mismanagement, the Miami Herald reports.

As part of a court-ordered arbitration agreement, International Portfolio of West Conshohocken, Pa., gets the $310 million in billings Jackson never bothered to ask uninsured patients to pay. The company gets to keep any money it collects.

The agreement grew out of a lawsuit in which International Portfolio alleged that Jackson had reneged on a 2006 contract, under which IP paid Jackson $5.7 million to collect $1.8 billion in billings from 1998 through 2005 that the health system had failed to collect. That contract was signed when Marvin O'Quinn was Jackson's CEO. IP estimated it would collect 6 percent, or $104 million, of the bills in 16 months.

Because of confusion over accounts receivable, there was some waffling and backtracking by Jackson execs. At one point, Jackson wanted to recall $984 million of the billings, because some patients were dead, bankrupt or didn't owe money.

Jackson's financial woes persist. It faces a deficit of about $90 million this year, according to the CFO. And between April and July, Jackson lost $11.4 million in Medicaid income, according to the Herald.

Some board members were the last to learn about the 2008 arbitration deal. Only after the Herald story on the deal hit newsstands did Revenue Cycle Director Carmen Pla tell board members about the deal that settled the lawsuit.

"I'm tired of getting slapped and punch-kicked," Jorge Arrizurieta, one of the board members told the Herald.

To learn more:
- read article 1 and article 2 in the Miami Herald

Related Articles:
Miami public hospital's financial picture getting worse
Bad accounting creates financial crisis at Florida health system
Health system may eliminate two hospitals, 4,500 jobs
Jackson Health System: 2009 bond sale becomes 2010 SEC investigation
Jackson Health's financial, labor practices slammed by Florida grand jury

Post a comment