Auditor sees positive trend at nursing home

lorri sughroue

Associate Editor

McCOOK, Neb. — Hillcrest Nursing Home is in much better shape than it was five years ago, an auditor told the Hillcrest Board of Trustees Wednesday morning.

Its net position stands at $84,134 for 2019, with revenue up for the year.

And expenses stayed flat from the prior year, said a representative of Lutz and Company, PC of Grand Island, Neb., in presenting the yearly audit.

Hillcrest, owned by the county but operating from its own revenue, has come a long way from 2012, when Medicaid and Medicare payments were not billed for several months after a former administrator fired the employee responsible for billing. Red Willow County Commissioners authorized a $1 million bank loan to Hillcrest, from McCook National Bank for five years, to help meet payroll and other expenses. The loan was paid off in July 2017. Hillcrest is actually in a “nice” position, the auditor said, with a number of positive trends. Cash flow has also increased, giving Hillcrest the ability to build cash reserves that can be used in the future in case of financial difficulties.

During the fiscal year ending June 2019, operating revenues increased $58,915 while operating expenses increased $24,807, according to the audit. As a result, Hillcrest had operating income of $85,703, compared to $51,595 the prior year.

Total revenues were $6.95 million, with total expenses at $6.86 million.

Still, residents using Medicare at the facility are declining and Medicaid reimbursements still lag behind actual costs.

This prompted board member Mike Eklund to question why take any Medicaid residents. Because something is better than nothing, said Ron Ross, president of Rural Health Development, the healthcare management firm hired by the Hillcrest Board of Trustees.

“The most expensive bed is an empty bed,” Ross said, adding that the number of Medicaid residents are still not the majority of residents at the facility. When 70 percent of residents rely on Medicaid, then there’s a problem, he said. According to the audit, the current number is 56%, up from 54% the prior year.

A new methodology coming in the future will be a benefit to some rural nursing homes, Ross continued, Hillcrest being one of them. But in urban areas where costs are higher, this won’t be the case, he said.

Ross reviewed the current financial report with board members, noting that many departments came in under budget last month, such as in dietary, housekeeping, laundry, maintenance and nursing. Nursing is always the biggest expense and to come in under budget is commendable, he said. Ross cited the elimination of agency nursing and the addition of international nurses to Hillcrest staff that have helped cut costs in nursing. International, or VISA nurses, are a valuable asset to rural communities that struggle to get registered nurses, Ross said.

Total operating costs in August were $566,000, about $67,000 less than what was budgeted, and revenues/expense consistent, he said.

Other findings from the audit included:

-- Nursing Home revenue increased by 1% higher than the prior year, at $64,238. The increase was due to increased private-pay revenue.

--Private pay revenue rose because of a census increase of 412 days, a private rate increase of 3% in February 2019 and a significant increase in the facility’s average private level of care provided.

-- Medicaid revenues decreased $59,244, or 1.7%, due to a rate decrease effective in July 2018. Both Medicare and Veteran’s Administration decreased $125,562 (8.4%) due to a census decline of 576 days.