A $1.1 million check from Medicare to the Johnson County Healthcare Center came at just the right time.
The payout, a result of the healthcare center’s 2019 reconciliation process with Medicare, is even larger than expected, according to CEO Sean McCallister, and it couldn’t be arriving at a better time.
“This is phenomenal news that is cause for celebration,” McCallister said during a March 25 hospital board meeting. “This is cash that is going straight to the bank at a time of financial uncertainty for many hospitals due to the unprecedented spread of the coronavirus. This just goes to show that partnering with this new cost report firm was a great investment for us.”
A cost report, according to McCallister, is a complicated “reconciliation” process with Medicare. Medicare provides funds to the healthcare center at the beginning of each fiscal year, and the cost report helps determine whether Medicare underpaid or overpaid. In this case, because Medicare had underpaid, the hospital is due a reimbursement.
The reconciliation process is complicated, but there is some strategy involved, McCallister said. Allocating dollars in certain ways could lead to savings, while others could lead to losses.
When the healthcare center’s CPA firm, Casey Peterson, first calculated that the center was owed over a million dollars for fiscal 2019, McCallister said that he was expecting some pushback from Medicare and was realistically hoping for $890,000 rather than the full $1.1 million.
“This really went better than any of us could have anticipated,” he said.
The success of the 2019 cost report process has motivated the healthcare center to re-evaluate past cost reports, McCallister said. Casey Peterson has already recalculated the center’s 2018 cost report, which could net an additional $239,000 for the healthcare center, McCallister said. The center is also considering re-evaluating their 2017 cost report.
“There is probably not a lot to lose by doing that,” McCallister said. “It is probably worth giving 2017 another look, but we wouldn’t want to go any further than that, because the farther back we go, the more issues we are going to run into with documentation and that sort of thing.”
McCallister said that most of the dollars received from Medicare will “go straight to the bank to increase our cash on hand.” Any other uses for the dollars will be discussed with the Johnson County hospital board at a later date, he said.