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Finance committee reviews year-end figures, Meharry lease entries and revenue-cycle progress
Summary
Hospital finance staff reviewed year-end income statement variances, a large city subsidy and Meharry lease entries, and reported improving revenue-cycle indicators after the Cerner go-live. Board members praised KPMG’s work and asked for further detail on certain lease and Cerner expense entries.
Hospital finance staff reviewed the year-end income statement and revenue-cycle performance, noting key variances tied to subsidy receipts and lease accounting.
Ray, the hospital controller, reported actual revenue of $24,000,002.56 versus a budgeted $28,000,001.48 for the current month, a shortfall the staff said has been a trend since April. Ray and other staff said the city subsidy line reflected $11,000,005.82 compared with a budget of $4,900,000 — an increase driven by subsidy receipts plus an additional $1.5 million and recognition related to the Meharry lease of $6,600,000.
Staff said building addendum 3 produced a $5,300,000 entry and Cerner-related expense recognition accounted for $2,300,000. Interest associated with the Meharry lease was reported as $1,000,005.87. Ray noted salaries were $5,400,000 versus a $5,000,000 budget and that lease and utility entries included the Meharry items described above.
On revenue-cycle performance, staff reported positive trends in cash collections since the December 14 Cerner go-live, including improving cash performance as a percentage of net revenue and reductions in initial denials as teams work aged inventory and claims edits. The unbilled-inventory metric was reported at 5.66 days as of June, and staff emphasized the team’s focus on aged claims, denials management and daily coordination among clinical and revenue staff.
The accounts-payable discussion highlighted an earlier roughly $20,000,000 point in AP and a growing component in aging greater than 90 days. Staff said a large Meharry-related payable temporarily distorted a blended days-payable metric (41 days); after excluding that entry staff estimated a more accurate blended figure closer to 87 days for aged payables. The finance team said it meets daily to prioritize critical payments.
Board members thanked the finance team and KPMG for their work. Dr. Elders said the finance committee plans to provide a roughly 120-day retrospective on prior financials at the next board meeting. No formal board action was recorded; the financial statements and revenue-cycle discussion were informational.
