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Ringgold County Hospital’s Board of Trustees met Monday, November 16 for the regularly scheduled monthly meeting which included the annual audit report prepared by Seim Johnson Accounting firm, a report from Dr. Bruce Ricker, chief of staff, on continuing Covid 19 response and updates on the construction project underway. During this meeting the board also addressed borrowing money and issuing bonds in the future not to exceed $2 million and this resolution for borrowing was adopted and will be in full force immediately.
Marty Dubas, representative from Seim Johnson, presented the annual audit, noting without guidance measures regarding funds accepted as part of the Covid 19 relief funds the audit is still in draft form. The report will be completed and submitted as a final audit report once those guidance measures and other needed information regarding the funds are received and numbers can be finalized.
Dubas did walk through the audit as is, giving the board several performance numbers, numbers to watch and explanations of the audited financials for Ringgold County Hospital.
Dubas began his presentation reporting no new accounting practices and policies and stating, as in past years, a deficiency in controls with a lack of segregation of duties. Dubas explained this is more common in smaller facilities where duties often overlap out of necessity.
The audit compares Ringgold County Hospital with other critical access hospitals with net patient revenue between $10 and $20 million. The median data was collected from October 2019 to November 2019 (pre-pandemic); however, in the audit numbers $1.1 million of Cares Act revenue is included. The margin perspective came in at 0.9 percent up from the prior year with the big change being a full year of 340B revenue bolstering revenue by approximately $500,000. Showing 291 days cash on hand was also a reflection of the Cares Act dollars.
Outpatient revenue for RCH was mid to 80 percent with Medicare outpatient numbers substantially higher than peer groups. This creates a more difficult opportunity from a margin perspective with more than 55 percent Medicare patients on average for RCH; however, this percentage reflects normal Medicare patient percentages for the hospital. Outpatient costs slightly increased compared to revenue, not surprisingly due to the decline in some services due to Covid 19. Salaries for RCH are higher than comparable facilities, but Dubas explained this could be a result of more emergency physicians.
Total assets increased $10.6 million, total liabilities increased $10.4 million and long term debt increased $1.3 million due to Payment Protection Program (PPP) loan dollars. While these dollars may still be forgiven under the terms of the loan, they remain as loan dollars at this time. Net position for the hospital increased $181,000 over year 2019 (noted as not including Cares Act funds); operating revenue increased 6.1 percent and total expenses increased 9 percent.
Dubas also outlined how Medicare will recoup their advance payments made in response to Covid 19. Ringgold County Hospital received $5.5 million. Medicare will begin withholding 25 percent of normal payments for services to refund the cash advance. After 6 months the withholding will increase to 50 percent and interest will also be paid as part of that retainment.
PPP repayment begins 10 months after funds are received and then turns into a forgiveness request for the funds.
The Cares Act advanced provider relief funds came unrequested with initial terms and conditions based on two criteria; that funds be used to prevent and prepare for the impact of Covid 19 in lost revenue and increased expenses. In June, it was restated in guidance that the money could be used to expand or preserve health care delivery. September 19 new guidance was again released giving recipients until June 30,2021 to use the funds. A ceiling was also placed on what could be captured. Recipients could capture a gain up to their 2019 profit and a loss that would take the recipient to zero. With the many changes that have taken place since receipt of funds related to and in response to the Covid 19 pandemic, Dubas concluded his audit report reiterating the need to be patient and wait for final guidance on handling the received funds to best utilize guidance measures and funds and assure correct reporting for financial report accuracy.
Missy Walter, CFO, gave a brief recap of the month of October calling it a “good month” from a financial standpoint. Fifty-two patient days and forty-eight skilled days were reported, both numbers above budget. Net patient revenue was $1.8 million; operating expenses were just over $2.0 million. The hospital also recorded $270,000 in other revenue bringing the net gain for the month to $92,000. Walter also noted no big changes in assets or liabilities.
Dr. Bruce Ricker’s report to the board indicated the hospital and clinic are seeing more and more Covid 19 patients; however, Ringgold County currently sits with the lowest county positivity rates in the state.
“Every day is like a new day with different things on the table,” he said.
Ricker stated he and staff have met to develop a “surge plan” in the event of quickly rising numbers.
In addition to Dr. Ricker’s report it was noted later in the meeting that testing numbers have increased and the hospital is receiving many requests for the rapid test over the test which takes longer to provide results. Due to greater percentage of patient requesting the rapid test, while RCH continues to keep up with test requests, tighter guidelines have been implemented for the rapid test in order to maintain an adequate supply of both tests.
When asked about the ability to order and receive test kits, director of nursing Kathi Schuster indicated manufacturers are doing their best to provide tests but the number of test requests is “overwhelming the system.”
Ricker also gave an update on the new pain management services clinic being offered. Ricker commented, “local people appreciate not having to travel for this service, so we have a lot of interest. I see that as a huge asset for patients.” Th pain management clinic saw 9 patients on their first day available for services. Melissa Freidrich will be the local provider once she has completed all training and certifications.
Gordon Winkler, RCH administrator, gave a construction report on the project underway. The owner/contractor agreement has been approved and signed. Temporary walls have been discussed as well as site demo, dirt work and delivery schedules for structural steel. Some preliminary work has been done inside the building marking out carpentry work for a retail pharmacy access door and a temporary wall. The south entrance has been closed and removing data tracks from above the ceiling is underway. Concrete and dirt work will begin soon.