Public hospital gets approval to write off millions in debt

The Cayman Islands Health Services Authority has been trying to claim unpaid healthcare bills that are “uncollectable,” including from some former patients who have died, the authority’s board chairman confirmed during a government committee hearing last week.

HSA Chairman Jonathan Tibbetts told the Legislative Assembly’s Public Accounts Committee that a significant portion of the authority’s provision for more than $90 million in “doubtful debts” (those that have been due for more than a year) would be “written off.” In accounting terms, that means the government would agree to absorb those expenses without payment.

Mr. Tibbetts referred to an impromptu “statute of limitations” for uncollected debts that was agreed between the HSA board and Cabinet.

“As far as anything over six years old, it’s already known that it’s uncollectable,” Mr. Tibbetts said. “Some people [owing debts] are deceased … it’s going to be next to impossible to collect.”

Details of when the write-off will occur and how much in receivables will be abandoned by the government is still being “negotiated” with the administration, Mr. Tibbetts said.

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The HSA chairman said he went through a list of bad debts compiled by the hospital over the last 12 years – a list of some 1,200 pages – with the previous health minister.

“We have only … this year been given the authority to write off the bad debt,” he said. “Ten-plus years of receivables is not an overnight process, or [even] a one-month process.”

In any case, the write off of “uncollectable” debts will happen by Dec. 31, 2017, Mr. Tibbetts said. That’s the end of the current government budget cycle, about seven months after the general election planned for late May 2017.

Although HSA financial estimates state that it was owed about $90 million as of June 30, 2016, the authority believes it will be able to collect only around $10 million of that.

To assist in that process, the authority sent out a request for proposals Friday inviting eligible companies to submit bids “to facilitate the collection of overdue self-pay patients’ accounts.” Deadline for the bids is Nov. 2.

Part of the collection operation will involve lawsuits against patients or businesses that owe healthcare debts, a step that the authority has never taken.

“Going forward, all debt that is owed to the Health Services Authority will be pursued to the full extent of the law,” HSA Chief Executive Officer Lizzette Yearwood told the Public Accounts Committee last week.

The public hospital system has long taken the position, formally doing so in 2010, that it would not sue local residents to collect on past due healthcare payments. In some cases, liens have been placed on local properties to recover the amounts, but no lawsuits have been filed.

A large portion of the unpaid debts has been accumulated by public hospital system patients who have not made good on payments for services or pharmaceuticals. However, Ms. Yearwood noted, some of the amounts were also due from private insurance companies that had not reimbursed the HSA for services.

The private insurance fees represent about 2 percent – roughly $2 million – of the doubtful debts figure.

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