The Office of Public Accountability reported that Guam Memorial Hospital Authority received a clean audit for fiscal 2025, however, auditors found one significant deficiency involving federal programs.
The auditors questioned $91,000 in costs due to noncompliance with federal requirements of the COVID-19 recovery funds. Auditors found the hospital did not properly document whether the vendors were eligible to participate in federal assistance programs.
In response, the hospital said it has corrected the problem, and verifications are now performed for all vendors.
The hospital's total operating revenues decreased by $20 million, according to the audit, primarily because of an increase in contractual allowances recorded for Medicare and Medicaid, which reduced net patient service revenue.
The audit said that although the hospital increased room and board rates in November 2023, Medicare reimbursement continues to be based largely on fixed per diem rates rather than billed charges. This widened the gap between billed amounts and expected collections, requiring higher contractual allowance adjustments.
Billings and collections also decreased from fiscal 2024 to fiscal 2025, dropping from $329.6 million ito $321.8 million.
Collections dropped from $118.5 million to $107.5 million. The audit said this was mainly due tho the Department of Administration reclaiming $10.7 million in Medicaid advances and increased claim denials from third-party payers.
To combat this, the hospital is revising payer agreements and exploring technology for improved insurance verification and clinical documentation.
"GMHA’s mandate to provide healthcare to all patients regardless of one’s insurance coverage or ability to pay has resulted in the continual growth of self-pay patient receivables. GMHA collects an average of 33 cents per dollar billed to self-pay patients," the audit stated. "For the last five years, self-pay patients were billed an average of $29.8 million per year for healthcare, and the likelihood of collections remains low due to the increasing costs of healthcare and the inability of these patients to pay."
By the end of the fiscal year, $77.5 million had been sent to the Department of Revenue and Taxation for tax refund garnishments.
About $3.2 million was collected, according to the audit.