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Red to black: Last month’s taketh is this month’s giveth

October 25, 2012

Tom Nordwick

    At last month's meeting of the Adams Health Network (AHN) Board of Trustees, members learned a state hospital tax tab of $1,346,270.49 had put their financial bottom line several hundred thousand dollars in the red.
    This month, the federal government came a-callin' again, but this visit left the hospital leaders in good spirits as Medicare deposited a settle-up check for 2011 in AHN coffers for approximately $750,000 — meaning the hospital now shows a $268,298 balance in the black.
    AHN President and Chief Executive Officer Tom Nordwick and AHN Chief Financial Officer Dane Wheeler reported to the board that the cost report that Adams Memorial Hospital (AMH) submits to the government at the end of May (the most recent was for the 2011 calendar year) settles up the payments the hospital received for Medicare patients (who account for about 60 percent of the AHN business).
    Wheeler said Medicare reimburses hospitals on a per-day rate of nearly $1,500 for in-patients  and roughly 34 percent of charges for out-patient costs. The extra money received recently comes to $150 more per inpatient day for AMH and an extra two percent for outpatient charges such as those assessed for lab tests, x-rays, respiratory therapy, etc.
    The hospital tax is a daily "tax" on inpatients that medical facilities must pay to Medicaid and then the federal government returns $2 for every dollar it receives back to the state, which makes the state books look good.    Indiana likes the tax which brings in about $330 million to the state because it takes about $80 million of it to pay the state's share of the Obama Care health program. The money left over (thanks to the federal infusion of cash) is distributed to hospital in the form of higher payments rendered for services to Medicaid patients.
    Hospitals that see a higher number of Medicaid patients benefit from the tax, unlike some rural facilities like AMH and Jay County Hospital in Portland.
    Nordwick said the Indiana Hospital Association is trying to set up a fund to help hospitals that do not benefit from the tax and AMH could stand to get perhaps up to $600,000. But he and Wheeler both said they weren't holding their breath until such money arrives.
    Money for such a fund would come from hospitals are "winners" in the tax formula.
    Nordwick added he has been in communication with State Rep. Matt Lehman (R-Berne) and that "Matt is sympathetic to our situation. We're going to be having more meetings to see if something can't be done to help the hospitals who are being penalized."
    Wheeler analyzed the overall AHN financial picture, noting that the hospital had $2 million less in income last month, but offset that with $2 million less in expenses during that time frame. Some insurance companies seem to be taking a little longer in settling medical claims, which also affects finances.
    Year-to-date, AMH had total operating revenue of $30,532,604 with expenses of $31,330,497. When another $1,066,191 in non-operating revenue (much coming from CEDIT funds used to help pay bonds on the 2005 hospital construction project) is added, however, that brings a positive figure of $268,298.
    Nordwick related to the trustees that for the first nine months of 2012, the hospital had admitted nine more patients than in 2011 (183-174) while critical access admissions were down one, 147-146.
    Both nursing homes, Adams-Woodcrest and Adams-Heritage (former Village of Heritage) have realized increases in inpatients by 12 and 2, respectively, and patient days at those facilities by a 222 and 14 count.
    The number of babies born at AMH is up (163-151), while outpatient registrations (52,537-51,813 or 724 more) and emergency room visits (8,673-8,451 or 222 more) are also up.
    Surgeries were down in September of 2012 compared to 2011 by a 164-145 count, and for the year have dropped by 114 (1,396-1,282).

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