GMHA addresses delayed payments and claims issues with Select Care and old receivables

In a recent budget hearing held by the 38th Guam Legislature, pressing financial challenges faced by the Guam Memorial Hospital Authority (GMHA) took center stage. As the meeting unfolded, officials painted a stark picture of the hospital's ongoing struggles with delayed payments and mounting claims, which have become increasingly difficult to manage.

The GMHA's legal team has been proactive, issuing demand letters for claims that exceed 45 days, a move aimed at addressing the backlog of overdue payments. "Payment is expected between 31 and 45 days of the bill date," a representative noted, highlighting the urgency of the situation. However, the reality is that many claims have lingered far beyond this timeframe, complicating the hospital's financial landscape.

While Select Care has been relatively timely in its payments, issues persist. The hospital is grappling with approximately $800,000 in denied claims for professional fees and IV infusion administration charges. Ongoing discussions with Select Care aim to resolve these denials, as the costs continue to escalate.

The situation is further complicated by old receivables from the Department of Corrections, totaling around $3 million for inpatient care dating back to before 2020. With no clear path to collection, GMHA is considering writing off these accounts, a decision that underscores the severity of their financial predicament.

The hospital's patient demographic is primarily covered by Medicaid and Medicare, with an increasing number of self-pay patients transitioning to Medicaid due to assistance with applications. However, the reimbursement rates for these programs are fixed, with a per diem rate of $1,689 for inpatient stays, regardless of actual costs incurred. This limitation poses a significant challenge as labor and operational costs continue to rise.

As of May 2, 2025, GMHA's accounts payable stood at a staggering $20.8 million. While supplemental appropriations from the legislature in recent years have provided some relief, allowing the hospital to pay vendors and alleviate credit holds, the financial strain remains palpable. The largest debts are owed to suppliers for essential supplies and pharmaceuticals, as well as payroll obligations for taxes and insurance premiums.

The discussions at the budget hearing reflect a critical moment for GMHA, as officials seek solutions to stabilize the hospital's finances and ensure continued care for the community. The path forward will require not only addressing current claims and payments but also a reevaluation of how the hospital navigates its financial challenges in the future.