The Upper San Juan Health Service District Board of Directors met in regular session Tuesday, spending a good deal of its time wading through another somewhat baffling Pagosa Mountain Hospital financial report. Regardless, indications suggest the facility is gaining financial ground.
District finance committee chair Karl Irons opened discussions by informing the board that the hospital collected approximately $430,000 in overall revenue in April. He said the amount exceeded projections by $5,000, which, after covering about $403,000 in monthly expenses, netted PMH roughly $27,000 in positive cash flow for the period.
The information seemed well received — particularly when March generated a record $482,000 in collections and May could top that. Nevertheless, a lengthy discussion ensued.
The debate centered on conflicting figures found in various PMH financial statements, primarily including the balance sheet and statement of income. For instance, the April 30 balance sheet reflects a current year net loss of $263,766, while the statement of income shows a year-to-date net loss of $266,858. Though the difference is only about $3,100, the numbers should, theoretically, match.
When asked what might cause the discrepancy, hospital director of financial reporting Julia White explained that the Dairyland hospital software system is an incredibly complex network that generates reports based on exact data entered into the system. When staff coding or data-entry errors occur, which by virtue of system complexity are often inescapable, certain reports show one set of numbers, while others will reflect opposing figures. White believes that, as administrators and staff gain software familiarity, relative disparity will decrease.
Though the April 30 income statement — after considering all net patient revenue and non-operating income, less all operating and non-operating expenses — indicates a year-to-date revenue shortfall of $266,858, hospital CEO Brad Cochennet says it’s just a snapshot in time. Because January through April is the slowest time of year, he fully expects hospital collections to increase over the succeeding eight months, thus finishing the year with a cash surplus of about $400,000.
Both Cochennet and White are confident that the next four months will be the busiest time of year, and the best opportunity to make up lost ground.
With the temporary help of outside financial consultants, the hospital business office is now current in its customer billing, and fewer mistakes are leading to higher (and faster) Medicare and Medicaid reimbursement.
Meanwhile, staff continues work toward collecting older accounts receivable, which invariably fell behind as PMH slowly established insurance contracts, and gradually moved from an acute care facility to a critical access hospital. Too, White said regular follow-up on current accounts (less than 60 days past due) is producing more timely turnaround.
At Tuesday’s meeting, despite an April 30 income statement suggesting the hospital is losing money, Cochennet and White pointed to a number of operational areas that show promise. Among them, the emergency room, lab and “other” revenues actually exceeded the year-to-date budget. And, while ambulance and swing bed operations were not far off, the summer season should boost their numbers significantly. Only inpatient revenues fell well below budget, largely resulting in the current deficit.
All in all, Cochennet assured the board that the hospital now has positive cash flow, April billing was “clean and clear,” and receivables are declining. For a start-up hospital not 17 months old, PMH is apparently gaining financial ground.