GMH giving away 12% of tax refunds garnished to private company

The Leon Guerrero administration is giving a private company $120 for every $1,000 of tax refunds Guam Memorial Hospital garnishes that are supposed to pay outstanding bills. A review of financial documents at GMH shows MedHealth Solutions collects 12 percent of every dollar the hospital collects above a $7.2 million monthly threshold.

GMH, despite its poor financial health, has been paying this company an average of $350,000 a month, or what may be more than $4 million a year. Gov. Lou Leon Guerrero and attorney general Leevin Camacho signed the contract on May 13, and 14, 2021, respectively. The contract was recently renewed for another year.

GMH contracted MedHealth as its revenue cycle management vendor to help the hospital to collect debts. MedHealth and GMH agreed through some process that the hospital, without MedHealth’s help, would collect $7.2 million on an average monthly basis. That would include insurance companies that pay their subscribers’s claims timely, reimbursements from the federal government, and the patients who pay their bills on time or through debt payments. GMH agreed to pay MedHealth 12 cents for every dollar paid to GMH above the $7.2 million monthly threshold, no matter whether MedHealth did anything to secure that additional revenue.

And according to GMH spokeswoman Cindy Hanson, the hospital did not remove tax refunds garnishments from that revenue formula.

Residents owed tax refunds may have their refunds garnished by the Guam Department of Revenue and Taxation to pay for taxes owed, or by the Office of the Attorney General for delinquent child support payments, or by GMH for outstanding patient bills. The garnishment is automatic, and requires no middle person or company. In other words, no one makes any effort on behalf of GMH for the hospital to get this money.

“The DRT garnishments are part of the collections along with collections from Medicare, Medicaid, and other insurance companies, and self-pay,” Ms. Hanson told Kandit. We asked whether the hospital’s legal counsel and chief financial officer signed off on this arrangement. We also asked what the hospital’s rationale is to pay a revenue consultant for revenue the hospital would automatically receive without a consultant.

We await those responses from the hospital.

Kandit also has asked director of revenue and taxation Dafne Shimizu whether the siphoning of a portion of the tax refunds garnishment is legal. Ms. Shimizu said she is reviewing the matter with her team.

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