Naperville, Ill.-based Edward-Elmhurst Health has released restated financial results after the health system overestimated the revenue it expects to receive from patients and health insurers by $92 million.
Edward-Elmhurst discovered the accounting error after doing an evaluation of its accounts receivable, which was recommended by Ernst and Young.
The analysis revealed accounting errors over several years totaled $92 million as of June 30, 2017. The health system said $42 million occurred before the 2013 merger of Edward Hospital in Naperville and Elmhurst (Ill.) Hospital. Independent auditing firm KPMG validated the analysis, according to the Chicago Tribune.
In a memo to employees, Edward-Elmhurst President and CEO Mary Lou Mastro, RN, said the errors were caused by insufficient accounting procedures and a misunderstanding of the health system's EMR system, according to the report.
Ms. Mastro told the Chicago Tribune the health system is addressing the issues to prevent similar errors in the future. She said Edward-Elmhurst will not lay off employees or cut services to offset the revenue overestimation.
Edward-Elmhurst implemented accounting changes to correct the errors, which negatively affected the system's financial picture. The system originally expected a $5 million operating loss for the first half of fiscal year 2018 and now expects a $15 million loss. The system's operating income of $1.7 million for fiscal year 2017 has also been adjusted to a $15 million loss.
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