St. Louis.-based Ascension saw revenue decline in the three months ended March 31, and it ended the period with a net loss, according to unaudited financial documents.
The 150-hospital system reported operating revenue of $6.1 billion in the third quarter of fiscal year 2020, down 2.5 percent from the same period a year earlier. Net patient service revenue dramatically declined in March due to a drop in patient volume attributed to the COVID-19 pandemic.
"COVID-19 has been encountered across all Ascension markets, to varying degrees, and has had an adverse effect on the system's revenues and operating margin," management wrote in comments on the financial results.
Looking at the nine months ended March 31, net patient service revenue was up 1.9 percent year over year due to several factors, including an increase in physician office visits and expansion of service lines and sites of care.
The health system's expenses climbed more than 3 percent year over year to $6.4 billion in the third quarter, and expenses were up nearly 4 percent in the nine months ended March 31. Higher expenses related to expanded service lines and the transition toward standardized revenue cycle services pushed the system's expenses higher before the COVID-19 pandemic, Ascension said.
Ascension ended the most recent quarter with an operating loss of $429.4 million, compared to operating income of $80.1 million a year earlier. During the nine months ended March 31, the health system's operating loss totaled $344.9 million.
After factoring in nonoperating items, including losses from investments of nearly $2.5 billion, Ascension reported a net loss of $2.7 billion in the third quarter of fiscal year 2020. In the same period a year earlier, the system recorded investment income of $1.1 billion and net income of $1.2 billion.
To help offset financial damage caused by the COVID-19 pandemic, Ascension received funds from the $175 billion in relief aid Congress has allocated to hospitals and other healthcare providers to cover expenses and lost revenue tied to the pandemic. The health system received $211 million in federal grants, according to The New York Times.
Ascension also applied for and received about $2 billion of Medicare advance payments in April, which must be repaid.