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October financials show $2M revenue shortfall; committee praises progress on aged payables but flags $987,000 denial spike
Summary
October revenue fell about $2 million short of budget primarily because inpatient revenue was $4.5 million below budget while outpatient revenue exceeded budget by about $2.5 million. Cash fell from $13.0M to $6.9M as the hospital paid down aged accounts payable; the revenue-cycle report flagged $987,000 in denials for October, including a $600,000 denial from Oscar Health Plan that has been appealed.
Hospital finance leadership told the committee that October revenue was about $2 million below budget as inpatient revenue fell approximately $4.5 million while outpatient revenue exceeded budget by about $2.5 million.
Rick Mercato summarized the income statement, saying the inpatient shortfall included a $2.2 million adjustment related to a prior-month accrual and lower volume (average admissions dropped from 225 July–September to 188 in October). Patient days fell about 15.8% month to month. Total expenses were roughly $14.1 million in October, down from $14.4 million in September. On the balance sheet, cash declined from about $13.0 million to $6.9 million to fund operations and to reduce a backlog of accounts payable.
Board members asked how additional state funding (reflected in revenue line items) and carryover aged accounts payable affect expected year-end results. Finance staff said they have a plan to continue paying down aged AP and expect to be in stronger financial shape as additional funding arrives and cost reductions are realized. Dr. Blackledge and others described paying out $6.5 million toward aged AP earlier in the fiscal year and said the hospital entered the year carrying approximately $14.0 million of aged AP.
On the revenue-cycle update, Dr. Blackledge reported October denials of $987,000 and noted one $600,000 denial from Oscar Health Plan that has been appealed; she described that denial as a temporary slowdown in cash rather than a confirmed loss. Committee members praised the finance team for progress in addressing the prior negative balance earlier in the year.
The committee moved and approved the October financial statements and the revenue-cycle report.
