Becker's Hospital Review

18 CFO / FINANCE Shore Medical Center, other community hospitals left out of COVID-19 federal assistance programs By Alia Paavola S hore Medical Center, a nonprofit com- munity hospital in Somers Point, N.J., said it is being le out of the federal aid allocated to hospitals to cover expenses or lost revenues from the COVID-19 pandemic. And Shore Medical Center said it is not alone. "ere are a lot of hospitals that fall in a sim- ilar niche as us, where we don't qualify for most of the aid," explained Rob Wood, direc- tor of finance for Shore Medical Center. In response to the COVID-19 pandemic, Congress allocated $175 billion in provider relief aid to hospitals across the U.S. HHS announced plans to distribute the funds in several ways, including $50 billion in gener- al distribution based on Medicare claims or net patient revenue; $12 billion to 396 pro- viders in areas that treated a high number of COVID-19 patients; $10 billion to rural pro- viders and $10 billion to safety-net providers. Despite allocating the funds in several ways, Mr. Wood said many hospitals, including Shore Medical Center, are being le out of the distribution due to ineligibility. For example, Mr. Wood said the medical center doesn't quite match HHS' definition of a rural hospital, it isn't classified as a safety-net provid- er, and it didn't meet HHS' minimum thresh- old of treating 100 COVID-19 patients prior to April 10 to qualify for the high-impact funds. In particular, hospital officials said Shore Medical Center likely treated symptomatic COVID-19 patients as far back as January, but because COVID-19 testing didn't start until mid-March these patients are not in- cluded in the HHS minimum threshold of 100 patients admitted before April 10. Shore Medical Center has received just $3.8 million in relief aid through the general dis- tribution, which is not nearly enough to make up for the revenue losses attributed to the pandemic, Mr. Wood said. e medical center, from mid-March to the end of May, saw a revenue loss of $24 million. is was attributed to a volume dip aer the state suspended elective procedures. "From an inpatient perspective, we lost about 40 percent of volume and 55 percent of emergency department volume," Mr. Wood said. "e big- gest issue we had was the inability to generate revenue due to the elective procedure mandate." In response to the revenue loss, the medical center has focused on expense reduction, implementing an 11 percent reduction in nonclinical staff, cutting employee hours and reducing salaries and 401(k) contributions. "We implemented a lot of expense reductions right away. As things start to improve we can hopefully bring employees back. is wasn't meant to be a permanent reduction," Mr. Wood said. Mr. Wood said that he applauds HHS for its ef- forts in helping providers get compensated for losses due to the pandemic, but hopes that the dis- tribution of funding can become more equitable. "Shore Medical abided by the state mandate to suspend electives, our staff still went to work each day and assumed the same risks as other healthcare workers … but we don't qualify for the federal [relief] funding," he said. n Missouri hospitals' uncompensated care costs grew $80M in a year By Morgan Haefner H ospitals in Missouri are seeing their charity care and bad debt rise as more services aren't paid for, according to a community investment report from the Missouri Hospital Association. Including charity care and bad debt, Missouri hos- pitals saw their uncompensated care costs grow $80 million from 2017-18. In total, hospitals pro- vided $1.5 billion in uncompensated care in 2018, with nearly two-thirds of the growth coming from charity care. Bad debt increased by nearly $30 million in the year span. The Missouri Hospital Association estimates that with other benefits like donations and unpaid costs related to treating Medicare and Medicaid patients, Missouri hospitals spent $3 billion on community investments in 2018. n Physicians acquire 35-hospital health system from private equity firm By Ayla Ellison D allas-based Steward Health Care is now the largest physi- cian-owned healthcare system in the U.S. The 35-hospital system announced June 2 that a manage- ment group of Steward physicians led by the company's CEO and founder acquired a controlling interest of Steward from Cerberus Capital Management, a private equity firm. The physicians will con- trol 90 percent of the company and Medical Properties Trust will maintain its 10 percent stake. "The COVID-19 global pandemic has exposed serious deficiencies in the world's health care systems, with a disproportionate impact on underserved communities and populations," Steward CEO and Founder Ralph de la Torre, MD, said in a news release. "We believe that future health care management must completely integrate long-term clinical needs with investments. As physicians first, we will focus on creating structures and timelines that meet the long-term needs of our communities and the short-term needs of our patients." Steward was founded more than a decade ago, and Cerberus in- vested in the company in 2010. Today, Steward has 35 hospitals in nine states and more than 40,000 employees. n

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