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Lafferty asks hospital directors to approve bridge loan

Mona Hill
Staff Writer
8/10/2011

Participating by telephone Aug. 4, Plumas District Hospital Chief Executive Officer Doug Lafferty briefed hospital directors on the necessity and timeline for implementation of an electronic medical records (EMR) system. Lafferty could not attend the meeting personally because of a prior out-of-town obligation.

The federal government has mandated that hospitals receiving Medicare payments implement EMR. To receive reimbursement, the hospital must meet completion deadlines.

The timeline is exceptionally tight: To receive the maximum reimbursement, the project must be at least 80 percent complete by July 1, 2012. Delay beyond the July 1 deadline will mean a smaller reimbursement.

Because the hospital pays the majority of the expense early in the project, Lafferty asked the board to authorize application for a $1.5 million bridge loan through a United Healthcare bond.

Lafferty wants to preserve the hospital’s cash position. To do so requires the bridge loan.

District homeowners will not be obligated to repay the bond; it’s repaid with the federal reimbursements. There will be no additional hospital assessment on homeowners’ property tax bills for this loan.

Controller and Interim Chief Financial Officer Cindy Crosslin said the loan has a five-year repayment term at 4 percent interest. No payment is due for 13 months and there are no pre-payment penalties.

Director Bill Wickman queried Lafferty about the risk of non-reimbursement because the government reneged on its commitment to reimburse the costs.

Lafferty acknowledged there is some risk, but because it is federally mandated, the hospital’s exposure is minimal. He added that this would be his fourth EMR implementation.

Lafferty praised the work of Crosslin and Chief Nursing Officer Linda Jameson, in her interim CEO role, in leading the team charged with identifying an appropriate EMR vendor.

Directors present at the meeting — Mark Satterfield, M.D., Valerie Flanigan and Bill Wickman — unanimously approved the resolution to pursue the bridge loan.

Directors will hear a comprehensive, apples-to-apples comparison of EMR vendors in September.

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