Hospital reimburses county for design costs on proposed addition

    Some speculated the county would never see any of  the $1.5 million the county advanced the hospital in 2018 to complete plans for a proposed addition to the facility.
    At the March 9 commissioner meeting, Chase County Community Hospital CEO Abby Cyboron and CFO Matt Musgrove presented the county with a reimbursement check of $831,356.
    Initially, the plan was to repay the county with bond funds after the election. But that plan was scuttled after the bond election was defeated in May 2019.
    There was no repayment plan in place if the bond didn’t pass.
    When it became apparent there would be no immediate efforts to seek the addition after the election failed, the decision was made by the hospital to charge off the $1.5 million as an expense.
    Cyboron, who was CFO at the time, said Medicare does reimburse for building project costs so the hospital submitted the expense on their Medicare cost report.     
    Since 51% of the hospital’s patients are Medicare patients, the hospital gets 51% of their costs remimbursed.
    Cycboron said Medicare approved reimbursement for 51% of the building cost advance, or $831,356.
    When the hospital received the Medicare reimbursement, Cyboron put the funds in reserve and pledged to pass those funds back to the county versus using them for operation.
    However the hospital couldn’t do that until they got final audit approval from Medicare. That finally came in late February.
    While the commissioners knew Medicare reimbursement was a possibility, they questioned whether it would ever happen.
    Now that they have the hospital’s check in hand, commissioners Dennis Kunnemann and Jacci Brown both admitted they were surprised and pleased to see the funds come back to the county.
    “What I really want is for people to see that we’re standing behind our word,” Cyboron said.
    Over time, she said she’s sensed some mistrust of the hospital over the project and bond election.
    She said the hospital has run in the black, barely, over the past two fiscal years. It hasn’t been easy, she noted, and it would have really helped to use those funds in reserve.
    But she said they made a committment to the commissioners and they fulfilled that committment. “I want people to know that.”
Need for guaranteed price
    Prior to the Chase County Community Hospital board  setting a bond election for the addition in 2019, they needed a guaranteed maximum price to determine the amount of bonding necessary.
    Getting that firm cost required the board to invest $1.5 million up front. Those dollars paid to have the concept turned into actual building plans.
    From there, those plans were used to determine costs so the design-build firms could provide a guaranteed cost for the facility.
    In meetings between the hospital board and county commissioners, the commissioners agreed to provide the $1.5 million from the inheritance fund to get to that point.
    It came with the understanding that those costs would be rolled into the $20.5 million bond request.