Finance committee approves HVAC repair, accepts Oct.–Nov. 2024 financials; audit complete, cath lab provider expected in May

Christy Smith, chair of the Hospital Authority finance committee, led a meeting in which members approved a contract to replace a failed HVAC cooling coil, accepted the October and November 2024 financial statements and received an update that the hospital’s fiscal 2024 audit is complete.

The matters were discussed as part of a broader finance review that included revenue and expense trends, a plan to reduce contract-labor costs, an update on the Cerner implementation costs and a staffing update that anticipates interventional cardiology services returning in May.

Interim chief financial officer Dr. Blackledge told the committee that “the audit is complete. The city finance manager accepted the audit on 01/28,” and that auditors from Crossland will present detailed findings and a management letter at a forthcoming meeting open to finance committee members. Keith Moran, controller for Nashville General Hospital, said the hospital is treated as a component unit of the city: “We’re a component unit of the city of Nashville,” he said, explaining how entity audits roll up into the Metro audit.

On capital work, the committee approved a contract with Bernhardt to replace HVAC equipment after a cooling coil failure described by staff as deferred maintenance. Facilities staff member Jerry Galu was identified as the facilities contact; board members asked about the expected lifespan and warranty for repairs. Staff cautioned that, because the equipment is past its life expectancy, warranties are typically short — “maybe a 30–60 day warranty” — and repairs may be followed by additional mechanical needs.

The interim CFO presented revenue and expense figures for October and November 2024. Staff reported total revenue of about $12,600,000 for October and $12,300,000 for November; they identified inpatient admissions and emergency department visits as revenue drivers that declined in November. Total expenses were reported at roughly $14,100,000 in October and increased to about $15,200,000 in November, leaving the hospital about $1.9 million down for the month of November. The committee heard that two-thirds of the year-to-date decrease versus budget was attributable to salaries, contract labor and other expenses; staff called out a one-time Paragon-related software cost of about $300,000 included in the “other” category.

Staff said they are pursuing cost reductions, with a targeted $1.8 million reduction in contract labor over the final four months of the fiscal year (March–June). They also said they are reviewing Cerner-related costs to quantify one-time expenses and expected savings once the implementation is complete.

The committee reviewed a breakdown of the hospital’s “other” expenses for the year-to-date through November, which totaled about $7.3 million. The largest components reported were building lease and rent ($2.7 million), utilities ($1.2 million) and licenses/memberships/permits ($900,000). Staff said future financial statements will present those items with greater granularity rather than in a single “other” category.

On operations, staff reported revenue-cycle performance metrics for October and November (October cash collections cited at 13.8%; November at 5.2%), and a blended two-month rate and year-to-date averages were shown on the slides presented to the committee. Staff said unbilled activity and denials have trended down after focused work and that they expect further improvement following Cerner go-live changes to workflows.

The committee also received a staffing update for the cath lab. Jana Rogers, chief over provider services, said the authority is in discussions with interventional cardiologist Dr. Joseph Ocama and that “we are talking to doctor Ocama, Joseph Ocama. He has been, he's an interventional cardiologist here in the area,” adding that he is a Vanderbilt graduate who has worked in the community. Staff said they expect a provider onboarding in May and anticipate cath lab services to resume then.

The finance committee voted by voice on the minutes, the Bernhardt HVAC contract and the October–November financial statements. Each motion passed on unanimous voice votes as recorded in the meeting; the record does not show individual roll-call tallies.

The committee scheduled a follow-up meeting with Crossland auditors to review audit findings and the management letter in depth and asked staff to provide more detailed monthly reporting packages and continued revenue-cycle trend reports. The meeting adjourned after committee members approved the agenda business.