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Sheehan employees find paychecks bounce

An uneasy sense of deja vu hit 59 of 156 Sheehan Health Network employees last week when they saw their paychecks bounce.

And there was fear the hospital would not meet this Friday's payroll, either.

Hospital officials were quick to blame the problem on reimbursement issues, and said they are working to correct it.

On Tuesday, officials announced they would reissue the paychecks that bounced. An e-mail Wednesday from the human resources department to Sharon Schultz, vice president of Local 1168, Communications Workers of America, said Friday's payroll would be met.

Still, "it's not an end to it," said Schultz, who did not know how many of the union's 26 registered nurses at Sheehan received rubber paychecks.

"Some of the employees are new, but there are numerous [employees] there who went through this before when the hospital had bankruptcy. It's kind of like, here we go again," she said.

Sheehan faces financial issues unique to many urban and rural hospitals.

Much of Sheehan's patient base is poor and the hospital is reimbursed -- although not fully -- from Medicaid and managed-care programs. For many patients, Sheehan serves as their primary care provider.

"[Our patients] require extra attention, extra X-rays, extra tests, extra exams to care for them," said Mary H. Kargbo, who became Sheehan's president and chief executive officer last October. "The doctors give it. The hospital gives it, but we're not getting reimbursed by insurance companies, by Medicaid. [Albany] is trying to reduce the cost of health care in New York State. Insurance companies are reducing their payments."

Recently, Sheehan approached the state about the possibility of accessing its indigent pool fund, used during financial crises.

"We've been working with the state to get that in a timely manner so we can get staff and vendors paid. But unfortunately the state has financial problems, so everything is coming slowly," Kargbo said.

Since the payroll issue erupted, Sheehan officials have promised employees weekly updates on the financial situation.

Also, administrators have contacted the office of Sen. Kirsten E. Gillibrand, D-N.Y., to find out about available federal grants. A meeting with Assemblywoman Crystal Peoples-Stokes, D-Buffalo, will take place in several weeks.

"And we've been getting calls of support from local politicians," Kargbo said.

Hospital officials are looking at other sources of revenue, including reopening the medical unit, which was closed in 2007 as a cost-saving measure, and the recently opened Urgent Care Center, a facility for noncritical care, such as sprains, and other "quick treatments."

New resources for the hospital include the Family Care Clinic, which opened last year, and the retooled Family Dental Clinic, which reopened in January.

Built in 1884, Sheehan was Buffalo's first hospital, then called Emergency Hospital. When the new Erie County Medical Center was built in the 1970s, some of Sheehan's services, including the trauma center and the burn unit, moved to ECMC.

Several years ago -- as a result of problems with billing, patient admissions and other issues -- Sheehan began to hemorrhage financially. The hospital filed for bankruptcy in 2002 but lost that protection. Sheehan refiled in 2004 and emerged from bankruptcy two years later.