Flush with sales tax revenue from the CF Industries expansion and far lower losses from unpaid medical bills, Prevost Memorial Hospital in Donaldsonville ended fiscal 2014 nearly $3 million to the good, a new financial audit says.
The 25-bed critical access hospital saw its total revenues increase by 42 percent to $9.9 million while its operating expenses increased 1 percent, or just $79,939, to $6.9 million.
The upswing in revenues over expenses in 2014 and improved investments meant the hospital saw its annual bottom line from business operations turnaround more than $3.5 million between the ends of its fiscal years in 2013 and 2014.
The hospital, whose fiscal year ends on Aug. 31, took a $570,430 loss in fiscal 2013 while in 2014 the hospital added nearly $3 million to its surplus after expenses were paid.
Formally known as the West Ascension Parish Hospital Service District, the hospital collects a half-cent sales tax on the parish’s west bank.
The hospital’s sales tax revenue rose nearly 70 percent between 2013 and 2014 from $1.3 million to $2.2 million.
Jane Arboneaux, the hospital’s office manager, said this month that the majority of the increase stems from the CF Industries expansion.
The Mississippi River fertilizer complex is the world’s largest nitrogen plant and has been undergoing a $2.1 billion expansion since mid-2013, bringing as many as 2,500 temporary workers to the river community.
Though the boost in sales tax revenue has provided a shot in the arm, patient revenues still comprise 70 percent of the hospital’s revenues and strong improvement happened in that revenue sector as well as in 2014.
Total revenues for hospital services rose 3 percent to $10.6 million in 2014, but the hospital’s audit shows that Prevost managers also were able to reduce their allowances for bad debts from patients by 50 percent between fiscal 2013 and 2014.
The allowances dropped from $2.3 million in 2013 to $1.1 million in 2014 and improved net patient revenues by nearly $1.7 million, the audit says.
Vince Cataldo, hospital administrator, said the reduction was not due to an increased number of insured patients from the Affordable Care Act but from improved reimbursement rates in 2014.
As one of 27 critical access hospitals in Louisiana, Prevost is reimbursed on a cost basis, not under the fee-for-service method many other hospitals receive, Cataldo said. Under fee for service, hospital are paid a set fee for a particular medical procedure; however, on a cost basis, hospitals can be reimbursed for reasonable costs at a rate higher than they might receive under fee for service.
He said the reimbursement rates rose in 2014 because of investments made in the hospital in the previous year. Those investments helped upgrade the hospital, meaning it was entitled to a better reimbursement.
CF Industries announced last month that its expansion is on schedule and expects to start some production in third quarter of the year. Other areas of the plant will start production in fourth quarter of this year or in early 2016.
Cataldo said hospital officials know the sales tax revenues from the plant expansion will not be around too much longer but they’re ready for that change.
“We’re going to take care of business,” Cataldo said.
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