Becker's Hospital Review

18 CFO / FINANCE CHS sees net loss quadruple, revenue sink in Q1 By Ayla Ellison F ranklin, Tenn.-based Community Health Systems, which operates 106 hospitals in 18 states, saw its net loss swell in the first quarter of 2019. CHS reported operating revenues of $3.38 billion in the first quarter of this year, down 8.5 percent from $3.69 bil- lion in the same period the year prior. e drop in revenue was partially attrib- utable to a year-over-year decline in pa- tient admissions and owning fewer hos- pitals than in the first quarter of 2018. Aer factoring in operating expenses and one-time charges, CHS ended the first quarter of 2019 with a net loss at- tributable to stockholders of $118 mil- lion. at's compared to the first quarter of 2018, when the company recorded a net loss of $25 million. CHS announced in late 2017 that it in- tends to sell a group of hospitals with combined revenue of $2 billion. e company made progress toward that goal in 2018 by divesting 11 hospitals and closing three others. CHS continued its hospital sell-off spree in the first three months of this year. During the first quarter of 2019, CHS completed seven hospital divestitures. e company has one other hospital un- der definitive agreement to sell. "e company intends to continue its portfolio rationalization strategy during the remainder of 2019 and is pursuing additional interests for sale transactions, which are currently in various stages of negotiation with potential buyers," stated the earnings release. e hospital divestitures have helped CHS reduce its debt load. e company carried $13.88 billion in long-term debt when it announced its divestiture plan at the end of 2017. CHS' long-term debt totaled $13.39 billion as of March 31. n Recession would rock for-profit and nonprofit hospitals, Moody's says By Kelly Gooch H ospitals are somewhat resistant to recessions because they provide medi- cally necessary services, but for-profit and nonprofit institutions would both feel the sting of an economic slowdown, Moody's Investors Service said in its quarterly report published April 24. "Adjusted admissions, a measurement of patient volumes, would come under pres- sure, and there would be an unfavorable shift in hospitals' payer mix. Reimburse- ments would also decrease if states were to cut their Medicaid programs in order to balance their budgets," the ratings agency wrote. Moody's said both nonprofit and for-profit hospitals would take hits on volume and reimbursements. Employers may lay off workers or close in a recession. This means people would lose their health insurance coverage and be more likely to defer elective surgeries and nonemergency procedures, the agency said. Hospitals would also have fewer patients with commercial insurance and be more reliant on reimbursement from Medicare, Medicaid and self-pay patients. Moody's said nonprofit hospitals would be particularly sensitive to the payer shifts, because they recently have seen expenses grow faster than revenue. In a recession, the agency said it also expects hospitals to face challenges be- cause states would likely consider cutting Medicaid reimbursement and benefits to balance their budgets. n Judge steps down from UnitedHealth case over 'immoral' denial of cancer treatment By Morgan Haefner A federal judge recused himself from a class-action case against United- Healthcare because the health insurer denied coverage of radiation treat- ment that could have treated his own cancer, according to BenefitsPRO. U.S. District Judge Robert Scola, who survived prostate cancer, recused himself from Richard Cole v. United Healthcare Insurance Co. in the Southern District of Florida April 29. The plaintiff, Mr. Cole, was diagnosed with prostate cancer in April 2018. UnitedHealthcare refused to cover proton beam radiation therapy to treat his tumors, spurring Mr. Cole to file a putative class-action complaint against UnitedHealthcare on April 3. In his order of recusal, Mr. Scola, who ultimately treated his cancer with surgery, said he could not rule on the case "fairly and impartially" due to the life-saving op- tion proton radiation gave him. He also noted that UnitedHealthcare initially de- nied his friend's six-figure medical bills for proton therapy, and only reimbursed him $150,000 after being threatened with litigation, according to BenefitsPRO. "To deny a patient this treatment, if it is available, is immoral and barbaric," Mr. Scola wrote. In an April 29 statement to BenefitsPRO, UnitedHealthcare spokesperson Maria Gordon Shydlo said the insurer "bases its medical policies and coverage deci- sions — including for proton beam therapy — on the prevailing published clinical and scientific evidence." n

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