Wayne Memorial Hospital reports $2.4 million deficit
By Matthew Whittle
Published in News on February 12, 2014 1:46 PM
Thanks in part to being pushed out of network by Blue Cross and Blue Shield of North Carolina, Wayne Memorial Hospital is facing a $2.4 million budget hole after the first three months of its fiscal year.
The contract between the hospital and the insurance company was canceled on Dec. 5 after the two sides were unable to come to a new agreement. And while a new one was signed on Feb. 4, those two months are definitely impacting the hospital's revenue, WMH Chief Financial Officer Becky Craig said Tuesday.
Also contributing to the $1.2 million operating loss were much higher than expected bad debt and charity claims from uninsured patients.
The $2.4 million shortfall comes about because the hospital's budget had originally projected a $1.2 million operating gain in the first quarter -- all despite lower than expected expenses and slightly higher than expected patient volumes.
But, said Ray McDonald Jr. as he gave the financial report to the hospital's board of directors Tuesday, the finance committee and the administration are recommending holding off on making any drastic changes to the budget at this point.
Mrs. Craig explained that the numbers discussed Tuesday only include the estimated effects of being out of network in December, but that when the second quarter financial report is given in April, they should have a better idea of where things stand.
Part of that, she said, is because the January out-of-network numbers will be included then -- and will be create another revenue loss.
But the other part of that, she continued, is because the hospital had delayed billing the out-of-network December patients as long as possible -- and because the hospital had pledged to not make those patients pay any more than if they'd been in network.
"Really, that's the biggest expense. But we tried to be as conservative because at the time we hadn't filed a lot of claims," Mrs. Craig said. "And we still don't have a great read on that reduction yet. It's based on expectations, so we hope it could be better."
Still, she admitted, this may be a year Wayne Memorial is unable to end in the black, but as they wait for more information, they will continue to keep an eye on expenses and look for ways they continue to create efficiencies and improve patient care.
"We are hopeful we can make it to a positive position. We have really got to work with our physicians to get to that lowest cost quality of care. Ultimately, quality drives down cost," she said.