An accounting firm manager gave a report on 2019 finances to the Texas County Memorial Hospital board of trustees on Tuesday. 

Members of the Texas County Memorial Hospital board heard a report Tuesday on its annual audit that showed it had about $32.4 million in operating revenue in 2019 that resulted in a loss, but better than had been expected. Additionally, some optimism was expressed due to government aid received due to the coronavirus.

David Taylor, senior manager at BKD, LLP of Springfield, made the presentation.

“TCMH had an unmodified audit report and even though the audit was performed remotely, the process was very smooth thanks to an outstanding job by the finance team to provide all the information electronically,” Taylor said.

The hospital finished the year with a loss of about $1.89 million, an increase of about $716,914 from 2018.

“Overall gross revenues were down about $1.8 million, but net revenues, what was collected or earned from patients, only went down $164,000,” Taylor said. “To us, this is a really good sign that the hospital is trying to capture all of the extra revenues that they can while the revenue cycle is functioning well.”

Taylor mentioned that even though the net loss was up to $1.8 million, overall cash decreased by about $1.2 million.

He noted that TCMH saved $447,000 in additional cash from good management of working capital in 2019.

“Accounts receivable came down by just over $600,000 in 2019 and that is just extra cash to the organization,” Taylor said. “Even though 2019 was down, hospital leaders found a lot of other ways to manage the balance sheet and keep the cash positive.”

AUDITING FIRM

Expenses increased in 2019 by $1.1 million over 2018.

“Several new physicians started in 2018, and 2019 was still a ramp-up year for many of them,” Taylor said.

Taylor explained that the hospital’s operating margin was  a negative 5.9 percent in 2019, but an improvement of about 2 percentage point from four years ago.

“We bounced back after 2015 to close to break-even in those later years. Hopefully we can bounce back in 2020 and going forward,” Taylor said.

The days cash on hand for 2019 was 54, a 29.63 percent decrease from 2018. That number improved greatly in early 2020 as the government aid was received.

SOME OPTIMISM FOR 2020

Taylor mentioned that days cash on hand looks much better in 2020, due to some outstanding payments that have finally been received.

“When COVID hit, there was a lot of concern about what would happen, but the liquidity and financial position of the hospital couldn’t be stronger today,” Taylor said.

Total liabilities and net position went down $2.3 million in 2019.

Taylor mentioned that there was a decrease in cash in 2019 of $1.1 million, due to decreased operations during the year.

SPECIAL GOVERNMENT AID WILL ASSIST HOSPITAL

“There is at least a chance, although still uncertain, that with all of the extra funding available due to COVID-19 and how well things are working today, that the hospital could be in a better place financially than we were as of Dec. 31 last year,” Taylor said.

“I will compliment the government, they sent out a lot of money in a very short period. The hospital was part of those pots of money, with not a lot of strings attached,” Taylor said.

“Unfortunately, the reporting and compliance issues with a lot of the funding is still emerging and we are looking at the potential issues that will need to be reported to the government to hopefully earn and/or keep a lot of that money,” Taylor explained.  “That is the phase that we are in right now.”

“The team here has done very well to try and understand all of the different programs and go after every opportunity that is available to them to try to protect the hospital,” Taylor said.

During his closing comments, Taylor mentioned that there is a higher chance of a recession due to COVID-19 and the challenges that rural hospitals face are not going to get easier.

“Our expenses are not going to change a whole lot, but what we get paid for those services may be impacted,” Taylor said. “As a recession hits, generally there will be more and more patients fall into the uninsured category.”

TCMH consistently writes off approximately $500,000 in bad debt every month. A large portion of those dollars comes from patients who do not have insurance or qualify for Missouri Medicaid.

HOW AUDIT IS CONDUCTED

BKD typically sends an audit team to TCMH each March, and it spends about a week pouring over hospital financial information from the previous year. The firm takes about a month to complete the audit information including expense statements, balance sheets, statement of cash flows and other information that comprises the financial report documents presented at the board meeting. This year the audit was performed completely electronically due to the restrictions in place due to COVID-19.

BKD uses historical TCMH data and data from other healthcare facilities for comparison purposes during the audit.  BKD also has access to the latest information regarding hospital payers which helps the firm reach concrete numbers in the final audit report.

LOSS RECORDED IN APRIL

Linda Pamperien, chief financial officer at TCMH, presented the financial report for April. 

“Overall revenues were down $2,137,449 from our budgeted expectations in April,” Pamperien said.  “Inpatient volumes were down $334,422, and outpatient revenue was down $1,758,295.”

Like all health organizations in the country, TCMH was hit with a loss of utilization due to COVID-19. Most procedures were restricted. And many were afraid to use medical facilities during the period of uncertainty.

TCMH ended with a loss of about $897,250 in April and a year-to-date loss of about $1.49 million.

Present were Wes Murray, chief executive officer; Pamperien; Doretta Todd-Will, chief nursing officer; Rachel Davis, public relations; Amanda Turpin, quality; Linda Milholen, MD; board members Jim Perry, DO; Omanez Fockler and Jay Loveland; guests Taylor and Mark Dethrow, USDA representative. Board member Allan Branstetter was absent.

The next meeting of the TCMH board of trustees is noon, Tuesday, June 23. Due to the current social distancing restrictions in place as a result of COVID-19, the exact meeting format and/or location will be released later. 

“When COVID hit, there was a lot of concern about what would happen, but the liquidity and financial position of the hospital couldn’t be stronger today,” David Taylor, BKD,  said.

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