Last week we reported that the LBJ hospital delayed payment of employee payroll deductions for utilities, insurance and bank loans. This was due to a cash flow problem.
We asked LBJ CEO Taufetee John Faumuina about the cause of the cash flow situation.
The CEO explained that the hospital’s cash flow is impacted by the delay of subsidies coming from ASG and the federal agencies that provide financial support to LBJ.
The ASG subsidy for the hospital is $500,000 each month.
We asked if ASG has paid the hospital’s subsidy or if its behind.
According to Taufetee, ASG is trying its best to pay but like LBJ, ASG is also affected by the delayed federal budget process.
ASG is behind paying the subsidy by a month or two months depending on the government’s own cash flow said Taufetee,
Asked what other effects the cash shortage has had on hospital operations, the CEO said payments to vendors and suppliers are delayed and the hospital has to prioritize the payment schedule.
KHJ News has learned from hospital employees that medical supplies are at a critical stage in some clinics.
As a way to reduce costs, the LBJ CEO said he’s considered all options of cost containment, but is not entertaining a cutback in hours or reduction in force because he said it may affect the delivery of quality healthcare and the hospital’s compliance with Medicaid and Medicare
We also asked the CEO if the withholding of employee payroll deductions doesn’t violate labor laws.
Taufetee said it does, particularly in that tax and retirement deductionss must be paid timely.
He said LBJ is also obligated to pay other deductions such as utilities and bank loans and “these deductions are agreements made by the employers and employees and either party can decide to discontinue at any time.”