Kootenai County's bills will be paid on time.

To prevent future shortfalls, the county commissioners signed a memorandum of agreement with Kootenai Health on Tuesday, establishing measures to ensure that medical services paid by county assistance will be properly funded.

"It's an increasing issue for our community," said Commissioner Jai Nelson, after the officials approved the agreement at their weekly meeting at the county Administration Building. "So we're addressing it in collaboration with the hospital."

The commissioners recently discovered that past administrations have underfunded the county's state-mandated assistance with rent, utilities, medical care and more for low-income residents.

The commissioners reopened this fiscal year's budget last week to inject more than $1 million to cover the indigent fund's deficit.

Hoping to avoid such issues down the road, the commissioners pursued the arrangement with Kootenai Health to establish payment terms.

"I think it's a move in the right direction," said Commissioner Todd Tondee. "It's something that we have not funded properly in the past."

Under the MOU signed by the commissioners and the health care organization, the county will settle all of this fiscal year's claims by paying Kootenai Medical Center $900,000 by the end of September.

For next fiscal year, beginning Oct. 1, the county will increase the indigent budget by $1.1 million to $2.6 million.

Of that, $2 million will be designated to Kootenai Health.

"It's one of the reasons our budget went up next year," Tondee acknowledged. "But I think it shows the real, true costs."

The commissioners also agreed that for the next three fiscal years, the county will pay claims with minimum monthly payments of $100,000.

The county will also allocate $50,000 for insurance premiums.

Kootenai Health agreed to provide a 12 percent reduction for expenses due this fiscal year, and a 10 percent reduction for the next three fiscal years.

Kootenai Health CEO Jon Ness gave his support of the agreement.

"This agreement is a positive and proactive step that will help both Kootenai Health and the county meet this ongoing need," Ness said in a prepared statement.

Tondee said the organization's billing discounts will be a benefit to the county.

"I want to thank the hospital," Tondee said. "They are becoming a true partner in the indigent costs, by forgiving some of the debt."