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•The Paynesville Area Health Care System (PAHCS) has received Critical Access Hospital (CAH) designation as of December 2, 2003, according to CEO Steve Moberg. This designation allows PAHCS to receive higher medicare reimbursement for hospital care patients due to reimbursement being made on the basis of actual costs.

Critical-access designation is expected to increase revenue for PAHCS by $3,000-$4,000 per day.

PAHCS has reduced the number of certified beds in the hospital from 30 to 25 to receive the new designation. The new medicare law also allows the facility to interchange the 25 beds between acute care and swing bed status. The facility reduced beds by removing five beds in double-occupancy rooms to create five more single rooms.

The Minnesota Department of Health recently surveyed PAHCS for the new designation. No deficiencies were found, and five recommendations were made to correct minor items.

•The board was also told that the Hilltop Care Center in Watkins was also surveyed by the health department and by the fire marshal recently. Nine minor deficiencies were cited, which is below the average 20 to 25 deficiencies for similar centers throughout the state.

•The board was informed by chief financial officer Kirk Johnson that the administration is looking into refinancing the system's $12 million in long-term debt. The refinancing will be done using 20-year revenue bonds. These bonds are expected to have a 4.75 percent interest rate.

The advantage of refinancing will be the lower interest rate along with a longer payback period. Refinancing could reduce PAHCS's annual long-term debt payments from $1.9 million per year to $1.1 million per year. Johnson indicated that the administration hoped to have the bulk of the work for refinancing done before the first of the year.