Issue link: https://beckershealthcare.uberflip.com/i/790284
41 CFO / FINANCE HCA Profit Soars 58% to $920M in Q4 By Ayla Ellison N ashville, Tenn.-based HCA Holdings recorded a 58 percent spike in profits in the fourth quarter of 2016 as it benefitted from higher patient volume and gains on sales of facilities. The for-profit hospital operator said revenue increased 3.8 percent year over year to $10.64 billion in the fourth quarter of 2016. The financial boost was attributable, in part, to higher patient volumes. HCA said same-facility admissions and same-facility emergency room visits each rose 1.6 per- cent year over year, while inpatient surgeries increased 1.4 percent. In the fourth quarter, HCA also recorded a $15 million gain due the sales of facilities and benefitted from a re- cent appellate court decision that reduced a judgment in a breach of contract case by more than half. In December 2015, HCA was ordered to pay nearly $434 million to the Health Care Foundation of Greater Kansas City for allegedly failing to fulfill pledges it made when it acquired Kansas City, Mo.-based Health Midwest's 12 hospitals in 2003. Earlier this month, the Missouri Court of Appeals reduced the judgment to $188 million. After factoring in expenses, HCA ended the fourth quar- ter with net income of $920 million, up 58 percent from $582 million in the same period of the year prior. Looking at full-year 2016 results, HCA recorded revenue of $41.49 billion, up from $39.68 billion in 2015. The company ended 2016 with net income of $2.89 billion, a 35.7 percent increase from net income of $2.13 billion the year prior. n 10 Things to Know About the CMS Medicaid Spending Report By Kelly Gooch F ederal and state Medicaid spending increased by an estimated 4.3 percent to $575.9 billion in fiscal year 2016, according to a Jan. 30 CMS report. Federal Medicaid spending alone grew by an estimated 4.5 percent to $363.4 billion in FY 2016, while state Medicaid spending increased by an estimated 3.8 percent to $212.5 billion. CMS estimated the federal share of all Medicaid spending remained at 63 percent in FY 2016. e findings are part of the Obama administration's final Medicaid spending report. For the report, CMS said it analyzed prior Medicaid trends and 10-year projections of expenditures and enrollment un- der current law, including the impact of the 2014 eligibility changes under the ACA. According to the agency, the Medicaid expenditure and enrollment projections in the report are consistent with current legislation and administrative policy regarding Medicaid as of Dec. 1, 2016, and do not take into account any future changes to policy or legislation. ere is one exception: the report assumes funding for the Children's Health Insurance Program is extended aer FY 2017 through 2025. Here are 10 other highlights and findings from the report. Medicaid spending in FY 2015 1. e states and the federal government collectively spent $553.8 bil- lion for Medicaid in FY 2015. is represents an 11.6 percent increase from FY 2014. CMS said this was the fastest growth in more than a decade, due primarily to Medicaid expansion under the ACA. 2. e federal government alone spent $349.8 billion for Medicaid in FY 2015, a 16 percent increase over the year prior, according to the report. CMS attributed this increase, in large part, to Medicaid expan- sion under the ACA. e states paid $204 billion, or about 37 percent of all Medicaid spending in FY 2015. 3. Medicaid provided healthcare assistance for an estimated 70 million enrollees on average in FY 2015, according to the report. is includ- ed 9.1 million newly eligible adults in the first full fiscal year of the ACA eligibility expansions. CMS estimated that overall enrollment grew by 7.6 percent between FY 2014 and FY 2015. 4. Estimated per enrollee spending in FY 2015 for children ($3,389), non-newly eligible adults ($4,986), and newly eligible adults ($6,365) was lower than that for aged enrollees ($14,323) and enrollees with disabilities ($19,478), resulting in an overall average of $7,492 per en- rollee in FY 2015, CMS said. e agency noted the figures include federal and state spending, but do not include spending for U.S. terri- tories, administration, disproportionate share hospital payments, and unallocated collections and prior period adjustments. CMS estimated per enrollee spending increased 4 percent between FY 2014 and FY 2015, reflecting a large increase in newly eligible adults. Medicaid spending in FY 2016 5. In FY 2016, average Medicaid enrollment is estimated to have in- creased 3.1 percent to 72.2 million enrollees. CMS said nearly all of the growth in enrollment is estimated to have been among newly eli- gible adults (2 million of the 2.2-million increase). 6. CMS estimated per enrollee costs for newly eligible adults decreased from $6,365 in FY 2015 to $5,926 in FY 2016 (6.9 percent). Medicaid projections 7. Medicaid spending is projected to increase at an average annual rate of 5.7 percent and to reach $957.5 billion by 2025, according to the report. 8. Enrollment is projected to increase at an average annual rate of 1.5 percent over the next decade and reach 81.6 million in 2025, CMS said. 9. Medicaid spending for adults newly eligible under the ACA is projected to amount to $806 billion by 2025. CMS said most of this spending — $741 billion, or about 92 percent — is projected to be paid by the federal government. 10. CMS said it expects per enrollee costs for newly eligible adults to decrease by 6.3 percent in 2017 and 3.3 percent in 2018. n