Members of the Van Diest Medical Center Board of Trustees met Monday afternoon and approved a recommendation to set the hospital's tax asking at $1.6 million for 2013-2014. That figure is an increase of $710,000 over the current tax asking of $850,000.
Chief Financial Officer Alice Heinrichs said the finance committee met on Jan. 23 to discuss the matter.She said reasons for the increase include escalating charity care cases, an increase in IPERS, and decreasing payer payments.
"We've been experiencing and continue to experience escalating charity care and uncollectible accounts," she said. "Currently through this year, we're projecting to have close to $800,000 in charity care, and that compares to $589,224 last year. That's an increase of $214,625."
She said at the same time, the hospital was experiencing an increase in uncollectible accounts. Heinrichs projected that there would be about $1.6 million for the year in uncollectible accounts, compared to last year at $1.167 million or a $496,000 increase.
"So combined for charity and uncollectible, it's $710,772 for this year as compared to last fiscal year," the CFO said.
VDMC also experienced an increase in the IPERS rate for the employer's portion. According to Heinrichs, the hospital currently pays 7.92 percent, but the anticipated increase - 8.18 percent - will go into effect in July on the average of what is paid out by the hospital.
"That's an increase over last year of $33,483," she told the trustees.
The hospital has also seen decreasing third payer payments. Heinrichs said with Medicare alone there is at least a 1 percent reduction in payments projected.
"Right now, with fiscal cliff, it's proposed at 2 percent, but with Critical Access, we assume they will decrease that from 101 percent of cost to 100 percent," she told the board. "Right now, projected at that, just using our current fiscal year with the 1 percent reduction, it's an increase of $195,444.
The total of those three items - an increase in charity cases and uncollectible accounts, a hike in IPERS payments and decreased payer payments - is $939,698.
The public hearing on the hospital's tax asking will be held at 7:30 p.m. during the Feb. 19 meeting.