By SHANNON HAUGLAND
Sentinel Staff Writer
The city is preparing to transfer the health care business of Sitka Community Hospital to the Southeast Alaska Regional Health Consortium, but city staff still has a number of tasks to accomplish that will extend beyond the July 31 date the agreement becomes final, the Assembly was told Tuesday.
Jay Sweeney, the city’s chief finance and administrative officer, gave an update on the affiliation between the two health care organizations at the regular Assembly meeting.
He told the Assembly the asset purchase agreement, outlining the terms under which SEARHC will assume health care responsibilities for the community, was signed and documents were exchanged on June 12.
“So the focus now is on executing the requirements and stipulations of the asset purchase agreement and facility lease agreement, as opposed to negotiating them any further,” he said.
Acute care at Sitka Community Hospital will close July 29, but throughout July its medical staff will coordinate with SEARHC to determine the best health care solutions for all acute care cases that may come up, he said.
The transition of Sitka Community’s Home Health Care division to SEARHC will occur on Aug. 1.
“The handover is being coordinated and there’ll be no disruption in services seen by the customers,” Sweeney said.
Long-term care will remain in place at SCH with no disruption in services, although billing will transfer on Aug. 1 to SEARHC.
Mountainside Clinic, next to the hospital, will remain where it is, and it’s accepting appointments post-closure into August.
Sweeney has been attending joint transition team meetings between SEARHC and SCH executives. With the departure of Keith Brady as city administrator on June 11, Sweeney is having a weekly check-in with Dan Neumeister, SEARHC’s senior executive vice president.
Sweeney said a major upcoming focus will be on signage and public relations to make sure the public is informed about the changes.
“I would say there are no serious obstacles or impediments at this point,” he said.
Sweeney also updated the Assembly on how the escrow would be funded and accounted for, and some of the ongoing responsibilities beyond the July 31 transaction date.
“Post closure finance and administrative work is going to continue for 90-plus days after the transaction date,” he said. “It’s a significant effort.”
The work for the city’s hospital includes final billings, processing customer payments, final payroll and tax filings, paying remaining accounts payable, processing mail, processing COBRA notices and payments, records retention for nonmedical records, completing the fiscal year 2019 financial audit and financial audit for the first month of fiscal year 2020, and the Medicare cost report for fiscal year 2019 and the first month of FY2020.
Sweeney told the Assembly that after July 31 Sitka Community Hospital as a department of the city and as a separate enterprise fund will no longer exist.
“It simply goes away,” he said.
At that time all responsibility for finance administration, procurement and other duties will pass to the city. All assets and liabilities will transfer into the city Tobacco Tax Fund, and any ongoing finance activity will be accounted for in that fund, Sweeney said.
He said the workload involved after the transaction date “can’t be absorbed by finance department,” so the city will use contractors from the hospital, and “loaner employee time” from ex-SCH employees who are going to work at SEARHC. “Employees will continue to work in their existing spaces until responsibility transfers to city finance,” Sweeney said.
The city is working with consultants to develop a detailed “post-transaction work plan” to ensure all aspects of the workloads are “defined and assigned.” The city also plans to contract with consultants for patient billing, resolving third-party provider issues and managing self-payment plans. The consultant already does some of the work now. The city has already received a proposal for the work from the consultant HRG.
Sweeney said that in the next 90 to 120 days the workload will decrease for the hospital’s contract chief finance officer, Cynthia Brandt, and the city will no longer need to have someone on-site at SCH.
“At that point, all responsibility for remaining financial activity will transfer to CBS Finance,” he said. “We expect some laggard payments, insurance (and other issues) to continue for years.”
Also, he said, any notices from the federal government (such as Medicare) will come to the city, and the city will need to coordinate access to records for Medicare cost reports.
Sweeney said Brandt has committed to as-needed hourly billings to assist.
The SEARHC board of directors, whose membership is limited to Native Alaskans representing tribal organizations in each of the 15 Southeast communities in the consortium, will have oversight of the joint Sitka-SEARHC health care venture.
The Sitka Tribe of Alaska’s representative on the SEARHC board is Lawrence “Woody” Widmark.
The consolidation agreement calls for Sitka to have an advisory committee, but members of that group will be selected after the consolidation goes into effect, a SEARHC spokesman said today.
The Sitka Community Hospital board will be dissolved after the joint agreement goes into effect. Rob Allen, hospital CEO, said he expects the July 18 meeting of the community hospital board will be its last.
