CNMI OWES $29 MILLION IN TARDY MEDICAL BILLS

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By Gemma Q. Casas

SAIPAN, CNMI (Marianas Variety, Nov. 6) – Due to the cash-strapped Commonwealth of the Northern Mariana Islands government’s healthcare liabilities to retirees and current employees, its unpaid medical bills to the islands’ only hospital reached US$28.75 million as of fiscal year 2005, according to the Retirement Fund’s annual report.

According to the report by the accounting firm J. Scott Magliari & Company, the Group Health Life Insurance Trust Fund has submitted unprocessed claims from the Commonwealth Health Center totaling $28.75 million.

"The costs of health care continue to increase and unpaid medical providers’ bills are mounting. In spite of a 15 percent increase in medical premiums levied on members, the program could not keep up with increased expensive medical care costs," the report said.

"The (Fund’s) board of trustees revised the plan formulary to reduce pharmaceutical expenditures. Still, the effect of premium increases and formulary revision could not stem the high cost of medical care. Retirees who are members of the plan constitute 48 percent of the subscribers (1,807 members) while 1,937 active members represent 52 percent," it added.

The report said the Fund, which administers the government’s Group Health Life Insurance Program, collected medical premiums totaling $7.739 million in FY 2005, up by 5 percent compared to FY 2004.

However, it was still short, not covering the medical claims processed for FY 2005 totaling $10.37 million.

The same trend was observed in previous years, which is why the government ended up subsidizing the program.

The report said the government’s combined subsidy to GHLIP in FYs 2004 and 2005 totaled $11.9 million.

"The Fund and the CNMI government are faced with the challenge of liquidating the $11.9 million deficit as of Sept. 30, 2005. This deficit balance does not include unprocessed claims mostly due to the Commonwealth Health Center, approximately $28.75 million," the report said.

"The combined rising cost of medications and some major medical procedures instigate the increase of the medical claims…. The CNMI government is self-insured for sponsoring the Group Health Life Insurance Program and any shortfall or excess medical costs against the revenue generated are accounted as CNMI government obligations," it added.

The government’s arrears to CHC are projected to be more than the original estimate if more unprocessed claims are added.

"The ultimate liability that will result from these claims has not been determined. Due to this, these claims have not been recorded and the amounts due from the CNMI government for these claims have also not been disclosed," the report stated.

The auditing firm that reviewed the Fund’s financial statements suggested that the agency "offer health awareness to its members" to reduce the government’s mounting medical liabilities.

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