A longtime Hawaii home health care provider has cut staff by half and closed a Maui division due to Medicare cuts and internal accounting problems that led to delayed insurance reimbursements.

Carolyn Frutoz-de Harne, owner of Hawaii Healthcare Professionals Inc., said she downsized over the past six months to 55 employees from 105 in mid-2010 after depleting her reserves to pay workers when private insurance and Medicare reimbursements were delayed. Part of the troubles stemmed from employees who had incorrectly processed payments.

"Now I know that I have to be financially involved every day, especially if I want to get paid," she said.

She is restructuring the home health care business that opened in 1995 and will continue to operate on Oahu and Kauai.

Frutoz-de Harne said she voluntarily relinquished six months ago her salary that had been up to $108,000 annually for about five years.

"Last year I made $42,000," she said. "This year I have myself capped at $36,000."

She moved to Kauai in 2009 to restructure the Medicare-certified home health division and ensure compliance with government regulations.

Meanwhile, claims processing handled on Oahu was not being done correctly, which delayed reimbursements for up to six months, she said.

In addition, employees were getting paid more than the company was being reimbursed by private and government payers, so the business was working "in a negative" and needed to renegotiate contracts in 2010.

"That really set us back financially," Frutoz-de Harne said. "It was a lack of reimbursement, timeliness of claims being paid, Medicare cutbacks. That’s when I said if I’m going to keep doing this, we need to restructure and balance our own budget."

Late last year, employee paychecks started bouncing, and the company had to stagger pay with Oahu workers paid one week and Kauai employees paid the next week, she said.

Caregiver Sheila Price, who has been with the company for about two years, said her paychecks have bounced on numerous occasions and that she has yet to be paid this month.

"I have been going through this. … Nobody will help me so I called the client’s daughters and told them there was no way I could take care of their mother because I wasn’t getting paid," Price said.

Frutoz-de Harne said the firm will open a new Oahu office next month, and "with the new restructuring, everybody’s getting paid on time."

Medicare payment rates for home health providers were reduced by 2.75 percent last year and will decrease by approximately 4.89 percent — or $960 million — in 2011, according to the Centers for Medicare & Medicaid Services.

If submitted properly, CMS is legally required to pay a claim within 14 days, according to Mary Rydell, Pacific Area representative.

"They either don’t understand what the requirements are or whoever submits the claims aren’t doing what they’re supposed to," she said. "The owner of the company should know why they’re not getting paid; it’s not a secret."

While demand for home health care increases due to an aging population, it is an expensive out-of-pocket service that is covered by Medicare only if a patient is going through rehabilitation while at home.