Southwest Memorial Hospital in Cortez, Colo., has implemented a new financial turnaround plan after a Medicaid rebilling plan generated less funding than expected, according to The Journal.
In May, the hospital's management arm said the facility was facing financial troubles and was in violation of bond covenants. Southwest Memorial issued bonds to finance a $32 million expansion project, and the bond covenants require the hospital to have 81 days' cash on hand. However, the hospital only has 21 days' cash on hand, according to the report.
To overcome the funding shortfall, the hospital rolled out a Medicaid rebilling plan. Southwest Memorial officials believed the hospital was shorted on Medicaid reimbursement due to coding issues, and rebilled Medicaid for 11,000 claims to bring in additional reimbursement.
The Medicaid rebilling plan yielded less than $500,000 in additional reimbursement, which was less than hospital officials originally expected, Southwest Memorial Health System interim CEO Tony Sudduth told The Journal.
The hospital immediately implemented a new turnaround plan that involves exploring ways to cut expenses and increase revenues. Under the plan, Southwest Memorial will leave 20 full-time positions unfilled and may sell off some properties, according to the report.
"A financial turnaround won't happen overnight, but we are confident in the next 12 months we will be back in good standing," Mr. Sudduth told The Journal.
More articles on healthcare finance:
Chicago hospital needs $3M infusion to avoid closure
CHS closes Missouri hospital; physicians put their money on the line to expand services
CMS releases proposed physician payment rule for 2019: 6 things to know