Charles County's only public hospital is emerging from financial difficulties brought on by billing failures and costly expansions, and will not need the emergency public loan it requested, hospital officials said this week.

However, the fiscal crisis has left Civista Health Inc. under pressure to open its procedures to greater public scrutiny. In a letter to Civista dated Monday, county commissioners said: "Civista's culture of secrecy must end."

Civista Health runs the Civista Medical Center hospital in La Plata, with a separate board of directors for each entity. Last week both boards turned down a county offer of a four-year, $4 million loan.

The boards could do so because Civista successfully collected on a backlog of unpaid bills and does not need help to pay a $5 million loan falling due this month, officials said.

"Our financial picture has changed," said Civista spokeswoman Darlene Fairfax.

Civista officials appeared before county commissioners in October to seek a $10 million loan. They said that because of billing shortfalls, Civista was owed roughly $23 million--a sum more than double the normal total of outstanding bills.

Half the $10 million requested was to pay off debt, with the other half dedicated to a reserve fund and to resolve possible computer problems associated with the turnover of the calender to the year 2000.

County commissioners initially declined to commit to a loan, demanding a more complete accounting.

Since then Civista has worked to rectify its billing procedures, Fairfax said. "The problem is very much on its way to being solved," she said.

The surge in delayed revenues allows Civista to pay off the $5 million loan, Fairfax said. In addition, she said, "We did not experience the need for Y2K expenditures [and] funding for future expenses is part of our long-range financial planning."

Commissioners in their Monday letter called the infusion of cash "very good news indeed."

But they went on to list elements of a proposed loan agreement that would have committed the hospital to changes in "governance and accountability."

Among the issues: term limits for members of Civista's boards, a new process to select board members to avoid "self-perpetuating or self-appointing" boards, and a formal process of public town meetings and open public meetings with county commissioners.

"These remain serious issues for the county commissioners," said the letter, signed by all five commissioners. "They did not evaporate because the Civista boards did not rely on a county appropriation.

"The secrecy which permeates the operations of the system's boards is not in the best interest of our community, and can no longer be tolerated," the letter said.

Fairfax, the Civista spokeswoman, said in a written statement that the corporation's boards are made up of volunteer community leaders and physicians.

"We believe they have the best interest of the community in mind," the statement said. "This system has worked well for our community hospital and we have no plans at this time to change our board structure or those who are on our boards."

Civista Medical Center, the former Physicians Memorial Hospital, is a county-owned building and sits on county-owned land, said Board of Commissioners President Murray D. Levy (D-At Large). The leases expire in 2002, he said.

"This is not a private corporation," Levy said in an interview Tuesday. "That hospital and land is owned by the county and is leased to that group to run it for the citizens."