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Finance committee reviews August financials: revenue below budget, accounts payable falls
Summary
Hospital finance staff reported August revenue $871,000 below budget driven by inpatient shortfalls, a reduction in accounts payable from $16.5 million to $8.62 million, improved cash collections and revenue-cycle metrics including a 1.2-day reduction in unbilled days.
Hospital finance staff reviewed August financial statements at the Hospital Authority Finance Committee meeting and highlighted a mixed month: revenue declined versus budget while expenses were under budget largely because of a reversal of a year-end accrual.
Dr. Blackledge presented the August income statement and said top-line revenue was $871,000 less than budget. She said outpatient revenue exceeded budget by $629,000 but that inpatient revenue was about $1.5 million under budget. "Top line revenue was 871,000 less than budget," she said. The presenter attributed an overall favorable expense variance of about $1.29 million to the reversal of a $2.4 million fiscal year-end accrual that reduced reported expenses in August.
On the balance sheet, staff reported a notable decrease in accounts payable: about $16.5 million in July dropped to roughly $8.62 million in August as the organization continued to reduce outstanding payables. Committee members called that a significant improvement and asked whether the reduction was concentrated in particular vendor buckets; staff said the decrease was primarily in over-90-day payables and that vendor relations have improved as a result of weekly meetings with large vendors.
Finance staff reported operating cash of about $5.5 million at month end. On revenue-cycle metrics, the team reduced unbilled days by 1.2 days in August. Staff described focused payer-escalation work that had produced recoveries; one example cited was a disputed Ambetter payment that staff said yielded about $20,000 and was expected to arrive by wire. Staff said they are prioritizing escalations with the largest payer, UnitedHealthcare, where delays and contract disputes have the greatest revenue impact.
Committee members and staff discussed formatting issues in the income-statement export from the hospital's reporting software (Multiview). The presenter said a ticket is open to correct sign conventions so variances display with the intended positive/negative brackets; staff emphasized that the bottom-line results were accurate despite the presentation formatting issue.
Board members asked about alignment between revenue cycle work and credentialing; staff said the credentialing team and revenue-cycle leaders meet regularly and that credentialing alignment continues to be a workstream.
The committee adjourned after the financial review.
