Hospital District budget presented to board

TONASKET – The preliminary 2011 budget for the North Valley Hospital District was presented to the board during their meeting on Thursday, Nov. 4.

“We’ve made some basic assumptions in the budget,” Bomi Bharucha, chief financial officer, said. “We’ve put the impact of the new building depreciation into the budget and have provided a higher level of contract reimbursements for the Medicaid and Medicare payments. By the end of 2011, we expect to have the warrants down from $2.5 million to $2.2 million.”

In the budget narrative, the following revenue assumptions for 2011 have been made:

· Volumes have been assumed to be steady except for the following: the Tonasket Clinic revenue has been factored at $1,020,000 and the Oroville Clinic at $1,014,000. This increased volume reflects the incorporation of minimum productivity standards. Emergency Department professional fee billings also reflect a large increase as a result of Coast to Coast taking over full management of the Emergency Department. Surgical revenue including professional fee billings assume the successful recruitment of new part time general surgeons.

· Nursing Home occupancy has been budgeted at an average of 41 Medicaid, six Medicare and eight private pay residents per day for a total daily occupancy of 55 residents. Nursing Home daily room rates have been increased by $10 per diem.

· Assisted Living is budgeted to reflect an average daily occupancy of 13 Medicaid and 12 private pay residents. Room rates have been budgeted at a $5 per diem increase for each of the three levels of care.

· LTC Division Revenue includes inter and intra division revenues for dietary and laundry services provided by the Nursing Home to the Assisted Living Facility and to the Hospital. Hospital Division Revenue includes ancillary services provided (Rehab, Lab, Radiology) to the LTC Division.

The following are the deduction from revenue which are expected for 2011 in the budget narrative:

· Contractual Allowances have been budgeted for 2011 incorporating the full impact of the depreciation and interest expense of the new addition for 2010 (three months) and all of 2011. Early in 2011 we will need to appeal to the Medicare Fiscal Intermediary for a rate increase based on this factor.

· Contractuals have also been increased as a percent of Gross Revenue to reflect the write-off of a large portion of the increased charges since Medicare and Medicaid (about 65 percent to 70 percent of the hospital’s overall business) only pay “cost-based” reimbursement regardless of charges under Critical Access status.

In the preliminary budget, a budgeted income statement, budgeted balance sheet, cash projection by month, detail schedule of FTE’s and money by department, schedule of budgeted contractuals and capital budget are also provided.

The next hospital board meeting will be on Thursday, Nov. 18 at 7 p.m. in the boardroom.