GMH credit hold letters in the dozens as debt mounts to $10.5M

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Guam Memorial Hospital (PNC file photo)

Guam – Over the last few months, the Guam Memorial Hospital has received dozens of letters from vendors either threatening credit hold or placing them on credit hold, some for urgently needed medicine.

Relief will be coming to GMH by next fiscal year when the sales tax goes into effect, but until then, the public hospital continues to struggle daily with funding shortages. PNC obtained via a Freedom of Information Act request dozens of letters from vendors either threatening to place the hospital on credit hold or actually placing them on credit hold. In some instances, medical suppliers refused to ship urgently needed items until payment was received.

For example: on January 5, GMH ordered from Baxalta 2 cases of albumin–a medication that is used to treat various conditions resulting from blood loss or liver failure. About a month later, GMH followed up on its request, saying “Item is urgently needed for patient use. Currently 0 on hand.”

Baxalta responded a day later saying, “I won’t be able to ship this order until payment has been made on previous orders.”

Again, GMH sent a request to Baxalta on January 22: “Urgent, need confirmed shipping information on these two purchase orders: due to surge usage we have gone to zero stock on immune globulin and it is urgently required.”

Baxalta agreed to ship the products but noted that there would be a delay in getting the products to Guam. So GMH wrote back a couple weeks later saying, “Need confirmation these purchase orders will arrive Guam on 2/12/18 as you have previously stated. Items are urgently required and the delay in receiving the products are causing numerous problems.”

Baxalta generously agreed to send the critically needed immunotherapy medication but gave GMH a stern warning: “going forward orders won’t be processed until payment has been made on previous orders.”

One of the bigger accounts is local vendor MedPharm. On February 20, MedPharm rejected an order because GMH’s balance grew to $400,000.

“I am so sorry but $400,000. We have been asking/begging for payment over past two months. As soon as we get a decent payment credit hold will be released,” wrote MedPharm’s CFO Rick Schnitzer.

About a week later GMH made good and paid down over $100,000 and credit hold was lifted even if it still had a balance of more than $250,000 with MedPharm which told GMH it “supports GMH but we must be paid for the supplies delivered to GMH so that we may pay our vendors.”

The hospital’s trash bins , at one point, were filled to the brim with no processing from trash collectors because of an overdue balance. On December 18, the hospital’s chief of environmental services warned management that its compactors and other waste bins were full, saying, “Bio Trash will accumulate to approximately 800 lbs per day. Please advise when I can have checks for both vendors.”

Some vendors don’t bother responding to request for quotation because of past due invoices.

Gulf Coast Pharmaceuticals Plus, in an email dated Feb 7, wrote, “We have most of these items in stock and ready to ship as we have become the largest supplier in the US for IV fluids, but I don’t want to waste your guys time with quotes cause we can’t fill the orders until the past due invoices are taken care of,” adding, “Until those are done or I at least have confirmation that payment is on the way it doesn’t make much sense to quote you on these items as we may not have them by the time that AP gets everything cleared up.

“I’m always fighting for you guys, but my hands are tied on this one.”