Becker's Hospital Review

9 CFO / FINANCE Vanderbilt University Medical Center triples operating income after Epic rollout By Ayla Ellison N ashville, Tenn.-based Vanderbilt University Medical Center reported higher revenue and operating income in fiscal year 2019 than in the year prior, according to audited financial documents released Nov. 12. The hospital reported operating revenues of $4.5 billion in the fiscal year ended June 30, up from $4.1 billion in the year prior. The boost is primarily attributable to higher net patient service revenue, which climbed 11 percent year over year. "The increase in net patient service revenue was due to improved clinical vol- ume and significant improvement in cash collections," the hospital said. Increases in labor, drug and supplies costs pushed VUMC's expenses higher. The hospital's expenses totaled $4.3 billion in the 2019 fiscal year, up 7 per- cent from a year earlier. VUMC ended fiscal 2019 with operating income of $181.1 million, up from $56.2 million in the year prior. The implementation of a new Epic EMR system dragged down the hospital's finances in fiscal 2018. VUMC's finances bounced back in fiscal year 2019. "Our FY19 operating results reflect a return to strong operating performance as we completed our recovery after our electronic medical record implementation which occurred in FY18," VUMC management said in the earnings release. VUMC completed its EMR implementation in November 2017. In its fiscal year 2018 earnings report, the hospital said its operating income was dragged down by increased operating expenses tied to the implementation. The EMR implementation also put pressure on clinical volumes in the post-live period, the hospital said. n HCA's profit dips to $612M in Q3 By Ayla Ellison H CA Healthcare's revenue increased year over year in the third quarter of 2019, but the Nashville, Tenn.-based company's profit declined. Four things to know: 1. HCA's revenues increased 10.9 percent year over year to $12.7 bil- lion in the third quarter of 2019. 2. HCA said same-hospital admis- sions increased 3.2 percent year over year. 3. The company's operating ex- penses totaled $10.4 billion in the third quarter of 2019, up from $9.4 billion in the third quarter of 2018. Labor and supplies costs climbed 11 percent and 10.6 percent, re- spectively, year over year. 4. HCA ended the third quarter of 2019 with net income of $612 million, down 19 percent from $759 million in the same period a year earlier. n Sanford Health must hire auditor to monitor billing after whistleblower settlement By Kelly Gooch S ioux Falls, S.D.-based Sanford Health has entered into a corporate integri- ty agreement with the HHS Office of Inspector General that requires the health system to hire an independent auditor to monitor Medicare and Medicaid claims, according to the Argus Leader. e 36-page agreement is designed to en- sure Sanford's continued participation in federal programs such as Medicare, the newspaper reported. It requires Sanford to maintain a compliance program, implement a risk assessment pro- gram and hire an independent review orga- nization to review billing at Sanford Medical Center, the Department of Justice said. Specifically, Sanford, which recently called off its merger with Des Moines, Iowa-based UnityPoint Health, will be required to con- duct at least annual training for employees regarding the health system's corporate in- tegrity agreement requirements and compli- ance program and the requirements of the federal Anti-Kickback Statute and Stark Law. e health system will also be required to submit reports each year for the next five years certifying compliance with the agreement and federal laws, according to the Argus Leader. e corporate integrity agreement is coex- istent with a $20.25 million civil settlement Sanford reached in October to resolve False Claims Act allegations. e settlement resolved allegations brought in a whistleblower lawsuit that Sanford offi- cials knew one of its neurosurgeons, Wilson Asfora, MD, was receiving kickbacks from his use of implantable devices distributed by a company he owned. e federal government said Sanford al- lowed the physician to financially benefit from the devices he used in surgeries and continued to submit claims to federal health- care programs for these surgeries, including procedures that weren't medically necessary. Sanford confirmed the corporate integrity agreement to the Argus Leader and told the newspaper the agreement includes compliance requirements that are already implemented. "Sanford is confident that all the require- ments set forth in the corporate integrity agreement will be met and in a timely fash- ion," the health system said. n

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