Audit looms over 25th District race

Tuesday, October 26, 2004 | 12:00 a.m. CDT; updated 3:56 p.m. CDT, Saturday, July 19, 2008

Bob Northup, Republican candidate for the 25th District seat in the Missouri House of Representatives, is citing a 2002 state audit that found University Physicians lost millions of dollars as evidence that Democratic opponent Judy Baker lacks leadership skills.

While interim executive director of University Physicians for 21 months, Baker said, she identified problems in the system but was not there long enough to address the complex issues and fully implement solutions. Baker left after a full-time executive director, Patrick Thompson, was hired.

Baker was hired as a consultant to do “operational turnaround and modernization.” She served as director from February 2000 to November 2001 and remained as a consultant until February 2002.

In May 2002, the state auditor’s office released a report analyzing finances from July 1999 to January 2002 at University Hospital and Clinics and at University Physicians.

According to the audit, University Physicians lost more than

$2 million in revenue due to untimely filing and lack of preauthorization during that time. Insurance companies and third-party payers can deny payment of hospital billings if the medical provider fails to submit bills within the appropriate time frame, which ranges from 60 to 90 days.

“From July 1, 1999 to Dec. 31, 2001, approximately $4.8 million and $450,000 in UP billings were denied for these reasons,” the audit reads. “Based on the average collection rate for UP (42 percent), we estimate the UP lost $2 million and $189,000, respectively, in revenues as a result of this situation.”

The audit also identified excessive credit balances at University Physicians. On Dec. 31, 2001, “credit balances totaled approximately $3.7 million, which exceeded the industry standard by approximately $2.6 million,” the audit reads.

Credit balances occur when payments on patient accounts exceed actual charges and are not refunded to the patient, the private health insurer or another third-party payer on a timely basis.

Northup said the accounting and billing problems show that Baker is not the efficiencies expert she claims to be.

“She inherited problems, but she didn’t fix anything,” Northup said. “Judy is a pretty gal, but she has to do more than sit around and look pretty.”

In her defense, Baker provided the Missourian with an April 5, 2001, letter from Paul Cook, then chairman of University Physicians, expressing satisfaction with her work.

“The leadership certainly hopes that you will be a candidate for the permanent position and are ultimately retained, so that you may continue your excellent work,” the letter reads.

Baker said she inherited problems at University Physicians and worked hard on an improvement plan. She said the state audit told her nothing she didn’t already know. Fixing the problems, she said, was difficult in part because of greater issues within the larger hospital system.

“It was evident when I got there that there was a great need for modernization both of technology and procedures to be able to compete with other provider systems in the area,” she said.

Baker said she and her team worked to start getting bills out the door on a timely basis and succeeded in reducing accounts receivable and increasing average revenue per physician.

“We instituted a lot of change, and we started a lot of things Hunter ended up finishing at UP,” she said.

The Hunter Group was hired by the hospital to turn around its finances after Baker left University Physicians.

Baker also cited a June 2001 e-mail from MU Health Care CEO Daniel Winship congratulating her and her staff on billing numbers from the previous May.

Baker said Northup’s accusations about her lack of leadership illustrate that he doesn’t understand health care.

“Bob Northup is trying to capitalize on the fact this is so complex,” she said.

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