Hospital moves into black with larger surplus than projected
Hospital CFO Greg Gardner has informed the Hospital District and his own board that Indian River Medical Center wound up doing considerably better financially than his earlier projections for the fiscal year that ended Sept. 30.
The hospital leadership has also welcomed a financial consultant hired by the Hospital District to take an in-depth look at hospital finances and advise District trustees on what’s fair in the ongoing dispute between the District and the hospital over indigent care reimbursement rates.
At the start of fiscal year 2014, Gardner had forecast the hospital would wind up in the black, showing a slight gain of about $100,000 in revenue over expenses when the fiscal year ended Sept. 30, 2014.
But the good news is that the hospital exceeded his projections by $1.1 million, for a total positive balance of $1.2 million in revenues over expenses.
“We’re tracking nicely, gaining momentum,” Gardner said at a series of recent meetings, where he compared the disappointing financial picture of fiscal 2013, when the hospital had a deficit of $3.5 million and was beginning a stringent turn-around plan.
Gardner attributed the encouraging news to the success of the turn-around plan and to a 6 percent increase in hospital revenues in fiscal year 2014. Expenses increased by only 3 percent, giving the hospital what Gardner characterized as a “very strong financial close” to the fiscal year.
District Trustee Harris Webber congratulated Gardner on the promising financial news at a recent meeting: “It’s good to see you’re making progress,” he said.
Gardner has also corrected mistakes in hospital tax forms for fiscal years 2013 and 2014 and resubmitted the forms to the IRS. The hospital provided Vero Beach 32963 and Vero News with amended tax forms Gardner filed at the end of October for fiscal years 2012 and 2013.
The original forms said the hospital gave over $1.3 million in retirement bonuses beyond their salaries to three executives over two years, then also paid the taxes on the bonuses. The amended forms say the executives received the money, but the hospital did not pay “a gross-up,” meaning the payment of the taxes on the amounts.
Last week, the accountant hired by the Hospital District, David Cranford of the Decosimo CPA firm in Chattanooga, TN, began combing through these tax forms, as well as other internal hospital financial reports, Medicare cost reports and Partners childbirth program costs. District trustees hope this detailed information will help them decide how to reimburse the hospital in the future for indigent health care.
Currently, the hospital and the District are negotiating over reimbursement rates for indigent care. At a recent meeting, District trustees decided to hire the accounting firm to avoid being “penny-wise and pound-foolish.”
“If it costs $20,000 to get information that saves taxpayers $500,000 then it’s worth it,” District attorney Glen Torcivia, who is negotiating with the hospital, told the trustees. The District contract with the financial consultant says his fee cannot exceed $20,000 plus expenses for travel, research and copying.
Hospital attorney Bill Stewart, who is on the hospital negotiating team, said the hospital was looking forward to helping the District’s financial consultant find what he needs.
“Our books are open to him,” said Stewart, reflecting a recent effort by the hospital to be more transparent and work with the Hospital District.