ECU Physicians posts positive earnings
(Oct. 3, 2011)
Aided by a cancer services joint-venture agreement with Pitt County Memorial Hospital, ECU Physicians turned a profit in fiscal year 2010-2011.
It was the first year since 2006-2007 that the practice made money. Expected approval of higher payment rates by Medicaid should help practice revenues exceed expenses in coming years.
In the fiscal year that ended June 30, ECU Physicians had operating revenue of $158.8 million and operating expenses of $167.9 million, executive director Brian Jowers told the health sciences committee of the ECU board of trustees last week.
But a $17.9 million payment from PCMH as part of the cancer center joint venture agreement, plus another $9 million in revenue shifts related to the Healthspan electronic medical record implementation and unfilled jobs, helped total revenues exceed expenses by $17.5 million.
Even though operating revenues -- the money ECU Physicians makes providing direct patient care -- fell short of operating expenses by $9 million, Jowers said the medical practice is close to balancing its budget.
"We would have come close to breaking even without the cancer center deal," Jowers said this week. The practice is seeing more patients, improving its charging and bill collecting, and using better business practices, he said. "We've just had to tighten our belt."
ECU Physicians cash reserves sit at approximately 50 days. Jowers would like to have 180 days of cash set aside. That's the amount of money the practice would need to pay its bills if all revenue stopped.
Most department revenues are exceeding expenses, and Jowers' team is working with the ones that aren't to improve their finances.
Through the end of August, fiscal year 2011-2012 revenues are $1 million below expenses. Another $3.4 million ECU is owed for the cancer center joint venture will offset the deficit, Jowers said.
State approval of Medicaid upper payment limits will help revenues in coming years, Jowers said. Once approved, ECU will be reimbursed to July 1, 2010, and higher reimbursement rates will continue.
Medicaid is the federal-state health insurance program for the poor and children. The upper payment limit reimburses state medical school practice plans (ECU Physicians and UNC Physicians and Associates) that see significant numbers of Medicaid patients at rates closer to what commercial insurers pay.
Jowers said that the state Medicaid agency should have approval for the upper payment limit by the end of the month.