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Council approves interfund loan to Excelsior Springs City Hospital amid cash shortfall from EHR conversion
Summary
The council approved a cash advance on hospital tax revenues to Excelsior Springs City Hospital after CEO Christian DeHart described a near 45% drop in weekly cash collections tied to a recent EHR and clearinghouse change; the hospital has short-term credit options and seeks the city advance to cover payroll, vendors and supplies.
The City Council approved Resolution No. 15-80 on June 2 to authorize an interfund loan (a cash advance on hospital tax revenues) to Excelsior Springs City Hospital after a presentation by Christian DeHart, the hospital’s CEO.
DeHart described a revenue disruption tied to the hospital’s conversion to a new electronic health record system (Cerner) and changes in the claims-clearing process. He said the hospital typically collected about $1,100,000 in cash per week before the April transition and then experienced a roughly 45% decline in weekly cash collections beginning mid-April. DeHart told the council an investigation found thousands of claims were being denied at submission because bridge edits from the prior system were not communicating correctly with the new system; he said about 13,000 bridge edits were missing and the issue led to about seven days of near-zero collections while the error was identified and corrected.
DeHart explained short-term financing options, including an Optum Financial credit line. "We're in our current and a third cycle for that credit line... In this third cycle, we've had $1,900,000 available to us... we currently owe about $400,000 on that cycle," he said, adding that underwriters approved a $2,300,000 allowance for the next round. He asked the council to consider a cash advance on the hospital’s 2025 tax revenues, similar to a 2023 arrangement, to ensure timely payroll, supplier payments and contract obligations.
Council members asked technical questions about interest and terms. DeHart said the Optum option carries a fixed 1.75% rate and that the fee is deducted up front (he estimated about $34,000 as an example). The council voted to approve Resolution No. 15-80 authorizing the interfund loan.
Why it matters: the cash disruption affected the hospital’s ability to pay vendors and meet payroll on time. The interfund loan provides immediate liquidity while the hospital corrects claims-processing issues and pursues longer-term financial stability.
What’s next: the hospital will continue denial-management and revenue-cycle remediation with its vendors and Cerner/Oracle teams; the city and hospital will process the interfund loan per the terms approved by the council.
