Report presents financial status of Phoebe Putney Memorial Hospital

ALBANY — An auditor’s report from CPA firm Draffin & Tucker offers a picture of the financial state of Phoebe Putney Memorial Hospital during the fiscal year that ended on July 31.

The hospital had $615.78 million in total assets in Fiscal Year 2018, down from $625.96 million in FY 2017. The total revenues, gains and other support for the 2018 fiscal year were $530.78 million, while total expenses were $528.85 million and operating income $1.9 million. That left $2.9 million in excess revenues.

In 2017, those numbers were $518.56 million in total revenues and gains, $517.13 million in total expenses, $1.4 million in operating income and $5.9 million in excess revenues.

Net assets at the beginning of 2018 were $121.67 million and at $184.49 million at the end of the year. In 2017, these figures were at $91.43 million and $121.67 million, respectively.

The report said that, in accordance with Phoebe’s policy, the hospital conducts ongoing reviews estimating the useful lives of its property and equipment.

“This review indicated that the actual lives of certain property and equipment were longer than the estimated useful lives used for depreciation purposes in the corporation’s financial statements,” the report said. “As a result, effective Aug. 1 2017, the corporation changed its estimates of the useful lives of its property and equipment to better reflect the estimated periods during which these assets will remain in service.”

The report said the impact of this change in estimate was to reduce depreciation during the year by about $9.27 million compared to the depreciation expense under the previous useful life estimates.

“Gifts of long-lived assets such as land, buildings or equipment are reported as unrestricted support and are excluded from excess revenues, unless explicit donor stipulations specify how the donated assets must be used,” the report continues.

Patient service revenue, net of contractual allowances and discounts was a total of $615.67 million for all payors for FY 2018. Broken down by payor group, the hospital received $199.68 million from Medicare, $95.41 million from Medicaid, $275 million from third-party payors and $45.55 million from self-pay.

The Medicare, Medicaid and State Children’s Health Insurance Program Benefits Improvement and Protection Act provides payment adjustments to certain facilities based on the Medicaid upper payment limit. The report said the payment adjustments are based on a measure of the difference between Medicaid payments and the amount that could be paid based on Medicare payment principles.

The net amount of upper payment limit adjustments recognized in net patient service revenue for Phoebe was about $5.51 million in 2018 and $4.17 million in 2017, the report said.

During 2010, Georgia enacted the Provider Payment Agreement Act for which hospitals in the state are assessed a “provider payment” in the amount of 1.45 percent of their net patient revenue. About $6.37 million and $6.25 million relating to the legislation is included in “medical supplies and other” in Phoebe’s statement of operations and changes in net assets for the 2018 and 2017 years.

“The provider payments are due on a quarterly basis to the (Georgia) Department of Community Health,” the report explains. “The payments are to be used for the sole purpose of obtaining federal financial participation for medical assistance payments to providers on behalf of Medicaid patients.

“The provider payment results in an increase in hospital payments on Medicaid services of approximately 11.88 percent.”

Charges for uncompensated services for FY 2018 and FY 2017 were about $1.15 billion and $1.1 billion, respectively. Uncompensated care includes charity and indigent care services of about $56 million in 2018 and $60 million the prior year.

About $18 million of the $56 million was unreimbursed. The report said Phoebe took care of a total of 9,382 indigent and charity care patients during 2018, and the uncompensated services accounted for $509.98 million net patient service revenue.

A total of $888 million in charges went to Medicare, Medicaid and indigent and charity services, with $282 million in estimated unreimbursed cost. Of the $56 million in charges foregone in charity and indigent care, Dougherty County accounted for $29.4 million — and $9.5 million of that was unreimbursed.

Net property and equipment was at $278.53 million in 2018, down from $288.65 million in 2017.

“Depreciation expense for the years ended July 31, 2018 and 2017 amounted to approximately $26.24 million and $36.31 million, respectively,” the report said. “Construction contracts exist for various projects at year end with a total commitment of $8 million. At July 31, 2018, the remaining commitment on these contracts approximated $5.81 million.”

Total goodwill and other assets were at $125.29 million in the 2018 year. Goodwill is related to the purchase of health care clinics and lease of the former Palmyra Medical Center, now known as Phoebe North, and is evaluated annually for impairment.

Phoebe provided community health education services that reached 3,894 individuals during FY 2018 at a cost of $221,678 — and included CPR training, bicycle helmet giveaways and babysitter courses. Phoebe Network of Trust enrolled 77 teen parents during the 2017-18 school year at a cost of $203,947, and the school nurse program covered 14,100 student lives and operated at a cost of $192,435 in 2018, the report said.

The total cost for all health fairs was $17,038, and 458 free flu shots were administered at an unreimbursed cost of $9,178. A bleeding control training session with 130 participants was sponsored by Phoebe at a cost of $3,612.

Phoebe contracts with Change Healthcare to process eligibility applications on behalf of the poor and needy who may be eligible for Medicaid. In 2018, Phoebe paid $1.17 million to process those applications. In FY 2018, Phoebe provided $627,298 in clinical supervision and training of nursing students, and an additional $750,098 in clinical supervision and training to pharmacists, pharmacy technicians and other allied health professionals.

In all, 780 students received clinical instruction from Phoebe during the year.

In 2018, Phoebe provided $184,181 in unreimbursed medical and drug treatment to 145 Dougherty County Jail inmates. The indigent pharmacy filled 6,695 prescriptions at a cost of $279,518.

At the same time, Phoebe provided $400,585 in cash donations and in-kind support to organizations such as Horizons Community Solutions, Albany Area Primary Health Care, SOWEGA Council on Aging and Keep Albany-Dougherty Beautiful, the report said.

The report said a total of $463,699 in subsidized health services, and $285.97 million in community benefits were paid out.

The full report, and other financial information on Phoebe, can be found at http://www.phoebehealth.com/about-us/about-us-financials.

Jennifer Parks