Small MS health system must write down $88 million in patient debt

The two-hospital Singing River Health System, which serves the tiny Mississippi communities of Pascagoula and Ocean Springs, has an outsized amount of uncollected patient debt: $88 million.

The numbers, staggering for a small and mostly rural healthcare system, came as the result of leaders essentially writing down significant sums they previously thought that they could collect. The writedowns totaled $27 million for 2013, and another $61 million for a five-year period ending in 2012, the Mississippi Press reported.

Kevin Holland, Singing River's chief executive officer, blamed the accumulation of unpaid bills and the writedown due to the general economy and the deterioration of insurance coverage in the region, according to the Biloxi Sun-Herald. It is a "local and national problem" that "every hospital" must face, he told the Mississippi Press, and the situation is worse due to rising out-of-pocket costs for patients and many others who lost their insurance completely.

The problem is part of a larger one facing both rural providers and those operating in states that are hostile to the Affordable Care Act. Some healthcare economists say rural hospitals are in crisis and note that many face the loss of the critical access designation, which would deprive them of additional federal funding.

Moreover, Mississippi, although the poorest U.S. state, refused to expand Medicaid eligibility under the Affordable Care Act, creating a "double whammy" for rural hospitals and hospital operators. The state also does not use presumptive eligibility for current Medicaid enrollees, making poor residents less likely to have coverage.

Even outside of the recent writeoffs, Singing River had $171 million in combined charity care and bad debt in 2012, according to the Mississippi Press.

It's unclear how Singing River's financial situation will impact its operational abilities. Jackson County owns the self-sustaining organization. However, the county is a co-signer on Singing River's liabilities. Although Holland told the Sun-Herald he does not expect Singing River to have to borrow money, the system may sue its old auditor for miscalculations on its patient debt, according to the Mississippi Press.

To learn more:
- read the Mississippi Press article
- check out the Biloxi Sun-Herald article