The hospital says it could receive more money from Medicare, which is headquartered on the US mainland, and says Medicare isn't UNsympathetic to its funding challenges.
But a bizarre bit of red tape means the hospital's locked into a per-diem pay rate from Medicare that hasn't been increased since the mid-1990s.
Corinne Podger reports.
Presenter: Corinne Podger
Speaker: Paul Moroni is an administrator at Guam Memorial Hospital
PODGER: The hospital currently receives one-thousand dollars a day for every Medicare patient it treats. That sum is based on what it costs to treat Medicare patients on average from 1992 to 1994, that's what's known as the base year. The real cost to the hospital nowadays is closer to 16-hundred dollars a patient per day.
Since the late 2000s the inexorable rise in healthcare costs has meant the shortfall has hit harder every year. Paul Moroni is an administrator at Guam Memorial Hospital.
MORONI: 1992 to '94, which they ended up using as the base years, our per patient per day average cost over that time were about a thousand dollars. And in theory every year they're supposed to give us an update because of improvements in services, inflation, normal changes over time. The way it's played out in reality is that federal budgetary concerns and other political factors have consistently meant that they don't update us our full increase in costs. So whereas maybe our costs increase seven per cent on average per year, they've been increasing our reimbursement rate a fraction of a per cent. So over 20 years that means a huge loss.
PODGER: In 1997 the hospital began working with Medicare to update its base year reimbursements from their 1994 levels. But while costs had gone up, and according to Mr Moroni there was no argument from Medicare on that front, the hospital records needed to back that up are missing.
MORONI: The hospital also happened to be transitioning at that time, as I'm sure a lot of hospitals around the country were, to more modern IT systems. And that just meant that in the transition a lot of old data that might have been around got put on hard drivers and got stored securely somewhere, some were stored here at the hospital, some were stored at our offset skilled nursing facility. And then in December of '97, typhoon Paka hit. Some of that data was hit by the typhoon, water damage, mould damage eventually, and then that happened to a lesser extent four or five years later when Pongsona hit in December 2002. And so both times we lost more and more of this older patient information. But it's also possible that the level of detail that Medicare is looking for was never maintained by the hospital.
PODGER: And how is that missing data affecting your payment levels from Medicare?
MORONI: Under Medicare regulations when a hospital is paid under the reimbursement scheme the GMHs, I think substantial and permanent change is the phrase they use in our costs of treating Medicare patients, we can get those rates updated. There's no real dispute between the hospital and the Medicare officials that our costs have gone up, but they're still tied by these regulatory requirements to account for the changes, not just the current costs, but the changes between the '92-94 base year, and current costs. And because we don't have that level of detail for 1992 to 1994, they can't do the level of comparison that they'd like to do.
PODGER: This issue has been raised repeatedly by the hospital, it's been 15 years of course since the first typhoon hit you. Why hasn't a resolution been reached since then?
MORONI: For a long time this wasn't necessarily a large financial problem for the hospital. So it wasn't until 2006 or so that the hospital was facing a substantial enough loss every year. And that's when we began to request for this relief. So the process has been going on now officially for two or three years.
PODGER: So three years on Paul Moroni where do things stand now with regard to getting this resolved with Medicare?
MORONI: At this level we're at an impasse. They haven't officially denied us the relief permanently, but unless, and this is from their standpoint, unless we're able to provide the level of data that they're looking for, we just won't be eligible to get this relief. And so at least since September of this year we've been at this point. From the hospital standpoint getting these rates fixed is really foundational to long-term improvement plans. We've got an ageing population on Guam and we're constantly improving services here, and those two things combined mean that we're doing more expensive services for a larger number of Medicare patients. And that's taking its financial toll on the hospital. So yeah, it is frustrating to see this drag out. But we're still hopeful, there's not any question that GMH is entitled to this relief, we just need to work with Medicare to provide what they're asking for.
PODGER: Radio Australia sought an interview from Medicare in the United States on this story but no one was available to comment.