The Luce, Mackinac, Alger, and Schoolcraft (LMAS) District Health Department could be in the red by about $60,000, Health Officer Nick Derusha informed the financial committee Monday, February 22. Environmental health programs are in the best financial shape, but personal health - an area previously shored up by money from the now-defunct home health care and hospice programs - will lose the agency roughly $492,000.

The first three months of the current fiscal year have been rough, but predictable, he said, with about $130,000 lost from October through December.

“The health department, historically, always loses money during that time period,” Mr. Derusha said of the first quarter, when business is slow and county contributions lag.

The health department's fiscal year begins October 1, while the counties begin their year January 1, so the health department does not receive contributions from them for the first three months of its year. LMAS expects to collect $266,520 from the four counties during the course of the year, however.

This year, environmental health programs, which include food service, sanitation, and sewage disposal inspections and enforcement, are expected to remain above water by about $32,000.

“At the end of the year, environmental health doesn't look that bad,” Mr. Derusha said.

On the other hand, personal health programs are expected to incur a roughly $492,000 loss. Revenues typically come from the state and Medicaid, although the reimbursements often are not enough, he said. In the past, personal health typically operated at a loss.

Mr. Derusha said personal health was shored up with home health care and hospice revenues, but the department dropped home health and hospice services in 2009 owing to financial troubles and an investigation by the Centers for Medicare and Medicaid Services. The investigation revealed the department was billing Medicare for unnecessary services and has denied payment on nearly 50 claims. The department has appealed each claim, all of which have been denied, resulting in a nearly $100,000 loss. The investigation is ongoing, and the total amount the department may have to pay back has not been determined.

Another issue is if someone requests a personal health program and cannot afford it, the department cannot turn that person down, Mr. Derusha said. Personal health programs include hearing and vision screenings and the Women, Infants, and Children program that provides nutrition assistance for children and expecting mothers. Adding to the department's financial woes are state-mandated services, such as the immunization program and sexually transmitted disease control program, that are hardly funded by the state.

Efficiencies and revenue sources, he said, could include applying for reimbursements when clients qualify for state or federal aid, and billing private insurance companies for services.

Increasing fees for environmental health programs by about 8% over two years is another possibility, although the financial committee balked at the idea. Committee member Rita Lemanek said environmental health program costs are already high, to which most of the committee agreed. Mr. Derusha also agreed, but said it was an avenue that may need to be considered.

The department downsized its staff from 100 people to 40 last year and is not expected to cut additional staff to make the department more efficient, Mr. Derusha said.

A budget will be prepared and submitted to the board of health in April, Mr. Derusha said.

County, LMAS Agree

on Building Lease Fee

The health department agreed to pay $1,787 a month to rent its office building at 749 Hombach Street in St. Ignace from Mackinac County. Calvin “Bucky” McPhee, Mackinac County commissioner who also serves on the LMAS finance committee, submitted the amount for consideration. While the rent is not as low as Mr. Derusha had requested at a February 10 meeting of the Mackinac County Board of Commissioners, the finance committee approved it.

The health department originally paid the Northern Health Foundation $2,260 a month for the building, but Mackinac County purchased it in April 2009. Since then, the department did not have a lease agreement with the county, although it continued to operate a branch from it.

Last March, the health department, faced with cash flow problems and with a state recommendation that the agency extend its building financing by 10 years, asked the county to support extending the financing. County commissioners argued at the time that purchasing the building, rather than refinancing, would be the best option and would save the county interest expense, and opted to pay off $100,000 in debt owed on the building, and then to negotiate new leases with LMAS and Allied EMS, another user of the building.

The final amount must be approved at the next Mackinac County Board of Commissioners meeting.