Becker's Hospital Review

16 CFO / FINANCE UHS sees jump in net income, ups reserve for DOJ investigations to $90M By Ayla Ellison K ing of Prussia, Pa.-based Universal Health Ser- vices saw revenues and net income increase in the third quarter of 2018 compared to the same period of the year prior. Here are six things to know: 1. UHS' revenues increased 4.2 percent year over year to $2.65 billion in the quarter ended Sept. 30. 2. e revenue growth was partially due to increased patient admissions at UHS' acute care hospitals. Ad- missions when adjusted for outpatient activity in- creased 1.5 percent on a same-facility basis in the third quarter of 2018 compared to the same period of the year prior. At UHS' behavioral healthcare facilities, ad- justed admissions increased 4.7 percent on a same-fa- cility basis year over year. 3. UHS saw expenses increase from $2.28 billion in the third quarter of 2017 to $2.39 billion in the third quarter of 2018. 4. In the third quarter of this year, UHS said it added $48 million to its reserve for an ongoing investigation into its behavioral health facilities by the Department of Justice. e reserve now totals about $90 million. "Changes in the reserve may be required in future peri- ods as discussions with the Department of Justice con- tinue and additional information becomes available," UHS said in an earnings release. "We cannot predict the ultimate resolution of this matter and therefore can provide no assurance that final amounts paid in settle- ment or otherwise, if any, or associated costs, will not differ materially from our established reserve." 5. e fact that the reserves are increasing more fre- quently is a "good thing," said Steve Filton, UHS exec- utive vice president and CFO, during a third quarter earnings call. "I think it's reflective of the fact that … our settlement and negotiations with the government are meaning- ful," he said. "e gap between where our offers and the government demands are has narrowed and we are optimistic or hopeful that that means we can reach a resolution of this relatively soon." 6. UHS ended the third quarter of 2018 with net in- come of $171.75 million, compared to $141.25 million in the same period of the year prior. n Ochsner Health, Walmart to launch accountable care plan in Louisiana By Alia Paavola W almart is partnering with New Orleans-based Ochsner Health System to launch a health insurance plan for about 6,600 Walmart and Sam's Club employees. This marks the first time the health system has partnered in this capacity with a large national employer, according to The Times-Picayune. The health insurance plan, called the Ochsner Accountable Care Plan, will be available to Walmart and Sam's Club employees in New Orleans and Baton Rouge, La., beginning Jan. 1. The health insurance plan will use Ochsner's ACO, a group of physi- cians, hospitals and other care providers. The goals are to avoid dupli- cation of services, improve care and save money. Walmart employees from 41 store locations will have access to care through a network of 200 primary care physicians with Ochsner Health. Patient engagement specialists also will be available for the Walmart employees through a 24-hour call center. Walmart has partnered with 10 other health systems in several other states through similar accountable care plans, Kory Lundberg, Walmart's senior director of global communications, told The Times-Picayune. n Indiana hospital files for bankruptcy, scales back services By Ayla Ellison F ayette Regional Health System, a single-hospital system based in Connersville, Ind., filed for Chapter 11 bankruptcy protection on Oct. 10. "After exhausting other possibilities, it was clear that Fayette Regional could not continue to operate under mounting debt and tightening fi- nancial resources," the hospital said in a press release. "Fayette Region- al will now be able to restructure its debt in an effort to obtain financial stability while still maintaining its high level of patient care." As part of the restructuring, the hospital closed its obstetric service line on Oct. 19. "Programs which have offered us the ability to provide these services are no longer in place, and the number of deliveries at our hospital has declined over the last several years," Fayette Regional Health System CEO Randy White told the Connersville News Examiner. "This limited demand for services, declining reimbursements and the need to up- grade our labor and delivery department, have made it hard to contin- ue to provide the deliveries in an effective and efficient manner." In its bankruptcy petition, the hospital listed its assets as between $10 million and $50 million and listed its liabilities in the same range. Mr. White said Fayette Regional is working with vendors to minimize dis- ruptions of services during the restructuring process. "This is a reorganization process, we're not closing the doors," Mr. White said. "Reorganization will allow us the ability to align our operations under [the] current healthcare industry to meet the needs of the community." n

• Cover