Hang-ups in a new electronic records system caused delays in billings and reduced the amount of cash available at Whidbey General Hospital.

Hospital officials recently said they are expecting to spend more than $7.5 million implementing an electronic records system provided by Meditech that originally went online in May.

When the new system went live, staff had to deal with an abnormally slow billing process, said hospital spokeswoman Trish Rose, in an email.

“As issues were identified they were fixed, but months passed as we worked through system and process bottlenecks, and cash on-hand declined to critical levels while our accounts receivable climbed,” Rose said.

Whidbey General Hospital operated without an electronic records system prior to Meditech. Hospital leaders had to purchase a system as a requirement of the Affordable Care Act. If the hospital didn’t install such a system, it would face a $50,000 penalty in 2015 plus a $550,000 reduction of Medicare/Medicaid reimbursements.

The glitch caused by the new system caused delays in the bills patients receive in the mail; however no accounts were sent to collection and hospital officials gave a grace period and extended payment plans, public relations liaison Keith Mack said in an email.

Patient care wasn’t affected.

Rose said that once the billing process started working, coders and billers started sending out millions of dollars worth of bills in a few weeks.

“They did an outstanding job and continue to work the backlog of charges and bills,” Rose said.

She said cash flow into the hospital has been restored, but it will take months to recover. During this time, administrators will be as conservative as possible in regard to overtime, supplies, staffing, travel and education.

The billing snafu caused cash problems for the hospital.

Mack said that at the lowest point, the organization had just two-and-a-half days worth of cash on hand. The hospital board in the fall approved a $4 million line of credit and, of that amount, the hospital drew $2 million.

The number of days’ worth of cash increased to 12.2 days, and cash receipts are continuing to increase. Mack said the hospital will pay back the line of credit in the next four months.

In addition to the work getting the hospital’s books in order, Rose said staff has to prepare for another update that will take place in March.

The update needs to be done in order to comply with the Affordable Care Act.