Auditors Direct Alameda County Medical Center To Create Repayment Schedule for Debts to County
Outside auditors have said that Alameda County Medical Center must implement a schedule for repaying its debt to Alameda County, or county officials will have to reduce funding for other services, county Auditor Patrick O'Connell said Tuesday, the Contra Costa Times reports. O'Connell said at a meeting of the county Board of Supervisors and ACMC trustees that according to outside auditors, Alameda County must issue a "going-concern letter" addressing its financial relationship with ACMC and the $191 million the county has loaned the facility (Ashley, Contra Costa Times, 8/4).
According to O'Connell, ACMC accrued an estimated $173.5 million in debt to the county through a fund-swap system implemented after ACMC became independent of the county in 1998. Under the system, the county loans ACMC funds to finance payroll and other obligations. ACMC repays the loans by depositing funds into a county checking account as it receives payments from patients and health insurers for services. However, O'Connell said ACMC's deposits consistently fail to meet its obligations, resulting in a large debt (Ashley, Contra Costa Times, 8/1).
At Tuesday's meeting, O'Connell said the debt "has grown so large, the auditors not only want a letter but they want a repayment schedule as well." County supervisors said they are prepared to impose a "shrinking cap" on the debt to ensure that ACMC adheres to its repayment plan, or risks a loss of loans. O'Connell said the outside auditors' demand stems from the belief that "without the loans," ACMC is "not a financially viable organization" (Contra Costa Times, 8/4). According to the Times, discussions among ACMC officials over its budget "seemed to challenge the county's debt claims," according to the Times. Ted Rose, ACMC vice president, said at a July 19 meeting that he has "yet to see an invoice detailing exactly how this reported debt has accrued" (Contra Costa Times, 8/1).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.