PMC posts unusually high August revenue; finance team reports one-time adjustments and insurer rate change

PMC reported unusually high gross revenues in August and a month of positive operating results driven by higher patient volumes and several accounting adjustments, board members heard Sept. 25. Jason, staff member (finance), presented the financial report and said gross revenues for August reached about $3.1 million, with total expenses near $2.5 million, producing roughly $175,000 in operating income for the month. The report said contractual adjustments were elevated—partly from write-offs tied to diabetes testing billed in long-term care that are not pursued for payment—and bad-debt levels remained near historical norms. Jason said year-to-date operations showed a net loss of about $76,000 but that routine cost-report and depreciation true-ups should change that picture in coming months. Why it matters: higher revenue months driven by episodic activity can mask timing issues in receivables and contractual adjustments; board members were told some cash will be delayed because of a Medicare claim-processing edit. Jason said Medicare had implemented an edit affecting critical-access hospitals’ method-2 billing; the edit was lifted and reprocessing is underway, and the hospital expects catch-up payments in September or October. Board discussion and next steps: Jason told the board PMC’s liquidity remains strong, with roughly $1.6 million in operating cash and additional short-term investments; he reported about 108 days cash on hand. He also said management completed negotiations with Aetna; the revised Aetna payment rates are scheduled to take effect Oct. 1. Jason described the Aetna adjustment as part of an effort to align payer rates (Blue Cross Blue Shield, Moda, Aetna) so none has a competitive pricing advantage. Grants and external funding: Phil, staff member, briefed the board on federal health-care transformation funds that CMS recently announced and on an existing HRSA collaborative grant. Phil said the state must submit a plan—he cited a November 5 deadline mentioned at the Alaska Hospital and Healthcare Association meeting—and that details will determine whether capital projects are eligible. Phil said capital for a new facility was not described as an eligible item in early guidance but emphasized the state-level plan will clarify allowable uses. Audit and administrative items: Jason said the audit and the federal cost report work are underway and will be important to finalize the accounting treatment for the new work building and depreciation that will flow through cost reports. He also noted a small rise in payroll-related expenses last month due to longevity incentives and that some irregular expenses are expected to normalize in coming months. No formal action was required on the financial presentation; the board received the report and asked staff to return with updated cost-report figures once the audit and Medicare reprocessing complete.