Annual Audit Report places TCMH in 'strong position'

Texas County Memorial Hospital ended 2022 in a “financially strong position” hospital board members heard at their monthly meeting on Tuesday.

David Taylor, senior manager at Forvis, LLP of Springfield, MO presented the annual financial audit report at the meeting.

Taylor noted three positive accomplishments in 2022. The hospital had a significant decrease of $4.7 million in accounts receivable which mitigated pressures on cash from lower operations and Medicare repayments in 2022. TCMH recognized $771,000 from the Provider Relief Fund, which was revenue from COVID funding that was distributed by the government to healthcare organizations. Finally, an exceptional decrease of $462,000 in controllable expenses.

Taylor explained that over the past three years, the hospital has received $11.4 million from federal relief funding related to COVID-19. “This isn’t money that just lands, and the hospital gets to keep it,” Taylor said. “There is a lot of work to demonstrate to the government that the hospital had expenses and lost revenues to retain that amount of funding. It was well worth the effort by the finance team as that is a big number that significantly impacted the hospital.”

Taylor commended the hospital staff for the decrease of $462,000 in controllable expenses in 2022. “This clearly demonstrates management discipline to keep the hospital’s revenue matched up with expenses as volumes were a little softer and revenues were tighter in 2022.”

Taylor reported that the hospital ended 2022 with a net position decrease of $1,938,536, an improvement over the previously unaudited numbers. Taylor noted that in 2021 TCMH brought in $9.3 million due to various opportunities for additional revenue. “Even with a $2 million loss in 2022, TCMH has increased the net position by $7.3 million over the past two years,” Taylor said.

Taylor explained that very few hospitals are showing a positive margin in the current economy.

“Even larger systems are fighting to stay close to the break-even point,” he said. “The healthcare industry is just tough right now for any hospital system to be able to record a positive margin and it doesn’t seem to matter if they are large, small, urban, or rural.”

In 2022, TCMH had a decline of $3.8 million in current assets. Taylor explained that most of the decline resulted from the repayments of money sent back to the government that was part of the COVID funding, which was essentially an advance short-term loan. “The good news is that all of the money was repaid by the end of 2022 as scheduled, so there are no more future repayments in terms of the short-term funding.”

Days cash on hand for 2022 at year-end was 155 days. “The overall liquidity of the hospital is three times what it was three years ago in 2019, which reflects a super strong financial position,” Taylor said.

Taylor pointed out the $6.5 million the TCMH Healthcare Foundation brought in from outside sources over the past 10 years. “A key distinction that separates TCMH from its peer hospitals of the same size is the ability to raise additional funds for the hospital through outside donations and grants,” Taylor said. Taylor called the TCMH Healthcare Foundation “a tremendous asset” to the hospital.

Taylor also commended TCMH for successfully navigating through the past three years and emerging in a stronger financial position.

Forvis sends an audit team to TCMH each March, spending about a week pouring over hospital financial information from the previous year. The firm takes about a month to complete the audit information including expense statements, balance sheets, statement of cash flows, and other information that comprises the financial report documents presented at the April board meeting.

Forvis uses historical TCMH data and data from other healthcare facilities for comparison purposes during the audit. Forvis also has access to the latest information regarding hospital payers which helps the firm reach concrete numbers in the final audit report.

In other business, Ross Richardson was sworn in for a five-year term on the TCMH board of trustees. Jim Perry, OD, TCMH board of trustees’ chairperson, administered the oath of office to Richardson.

The TCMH Board of Trustees voted unanimously for their officer positions for the upcoming year with Perry as chairperson, Allen Branstetter as vice-chairperson, and Joleen Durham as secretary.

Stace Holland, TCMH chief executive officer, reported that TCMH will take ownership of the former Sturgeon Chevrolet building in Licking. Bids will be obtained for the renovation of the 8,400-square-foot building into a new space for the TCMH Family Clinic and ambulance base in Licking.

“The new TCMH facility will include a full-service modern medical clinic, weather-resistant drive-thru testing, and a vaccinations site, and a mass infusion area,” Holland said. “We are excited about the generational benefits this project will bring to the people of Licking and Texas County.”

Linda Pamperien, TCMH chief financial officer, presented the March Financials. Overall revenues were down by $374,451 from budgeted expectations for the month.

According to Pamperien, outpatient revenues improved significantly in March from February’s numbers due to an increase in emergency room visits. Expenses at the hospital were down again this month, but the hospital ended the month of March with a negative bottom line of $279,007 and a year-to-date loss of $925,892.

Upcoming activities at the hospital include Nurses Week celebrated May 1 through 5, Hospital Week May 8 through 12, and a quarterly community leadership breakfast meeting on Friday, May 19 at the hospital. The leadership meeting is an opportunity for area mayors, city administrators, Texas County commissioners and public administrator, schools, and government representatives to partner and work together for the betterment of our communities.

Board members learned that Jay Gentry, director of the TCMH Healthcare Foundation, would retire at the end of April. “We thank Jay for his commitment of over 17 years to TCMH,” Holland said. “Jay has been vital to the success of our hospital with his tremendous efforts in securing extra capital money for the hospital from various funding sources.”

Present at the meeting were Taylor; Richardson; Perry; Branstetter; Durham; Holland; Pamperien; Courtney Owens, chief nursing officer; Helania Wulff, director of public relations, marketing, and physician recruiting; April Crites, director of quality and risk management; Tricia Benoist, MD, chief of staff; Anita Kuhn, controller; board member, Steve Pierce.

The next meeting of the TCMH board of trustees is Tuesday, May 23 at 12:00 p.m. in the hospital board room.