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Dahl Memorial audit shows $750,000 operating loss; hospital outlines collection, Medicare and cost-report issues
Summary
Dahl Memorial Hospital’s audited financials for fiscal 2024 showed an operating loss just under $750,000. County and hospital officials reviewed third‑party settlements, patient-responsible balances, and Medicare cost-report rules that affect rural hospital finances.
Dahl Memorial Hospital officials briefed Carter County commissioners March 10 on audited financial statements for the fiscal year ending June 30, 2024, and on near-term financial challenges.
Corey Burnett, contracted chief financial officer supporting Dahl Memorial, reviewed the audit prepared by an external CPA. The auditor issued an unqualified (clean) opinion, meaning the hospital’s statements were fairly presented. The audit showed an operating deficit for the fiscal year of about $750,000. A major driver is the hospital’s substantial reliance on Medicare: roughly 65% of net patient revenue came from Medicare in the audited year, hospital staff said.
Hospital leadership and the CFO outlined three parallel financial strategies to stabilize operations: improve revenue cycle collections (particularly patient-responsible balances), increase patient volume for higher‑margin services, and control operating costs. Corey said the hospital is now collecting more patient-responsible balances at intake and reported several thousand dollars collected in a recent week after staff began enforcing timely payments and payment-plan options.
A technical but material accounting issue discussed in public was how the county-donated building is treated for cost reporting. Dahl officials said they will claim actual depreciation on the donated building on the Medicare cost report (rather than an estimated market rent amount). That method had been audited and approved, hospital staff said, and it prevents a potential Medicare payback that could otherwise be required. Officials also described a pending federal policy discussion the hospital is monitoring: whether CMS will alter how swing‑bed reimbursement is calculated for critical-access hospitals — a proposal on the OIG/DOD watch list that could significantly reduce payments to small hospitals, staff warned.
Commissioners asked about near-term impacts on county budgets and resident insurance rates. Hospital leadership said the hospital is taking steps to collect balances and explore broader referral opportunities to increase volume, and they are coordinating with county staff to identify resources and to meet reporting needs.
No county financial commitments were made at the meeting. Hospital officials agreed to provide the board with quarterly financial updates and to share documents used in the audit and cost‑report work.
