Chicago-based CommonSpirit, a 158-hospital system, expects to receive about $1.3 billion in payments from various one-time funding opportunities by the second quarter of 2025, executives said during the health system's Oct. 4 investor call.
Payments from the Federal Emergency Management Agency and some tax credit dollars related to the Internal Revenue Service's employee retention program were not reflected in CommonSpirits fiscal year 2024 results.
CommonSpirit reported a $581 million operating loss (-1.5% margin) for the year ending June 30, 2024, a notable improvement on the $1.3 billion operating loss of (-3.6% margin) reported in the same period the previous year. Total operating revenues were $37.5 billion, up from $34.1 billion, while operating expenses grew from $35.3 billion in FY 2023 to $38.1 billion in FY 2024.
"With regard to FEMA, we have about 70 projects, all of which are in the final stages," Benjie Loanzon, senior vice president and corporate controller of CommonSpirit, said. "In fact, we are expecting some approvals in October. The total amount for these projects is about $800 million once we're reimbursed for all of them."
CommonSpirit said FEMA payments were delayed because the federal government was reserving cash for future potential disasters and was waiting for continuing resolution approval.
"Now that this has been approved, we expect the FEMA money, or the funding obligation, to come through by Q2, or at the latest, Q3," Mr. Loanzon said.
Additionally, the employer retention tax credits amount to about $500 million, according to CommonSpirit.
"The IRS is being cautious with reversals, but we have around 600 claims. In mid-August, the IRS indicated it would start processing about 30,000 claims in the coming weeks, so we're hopeful our 600 claims will be included in that," Mr. Loanzon said. "Lastly, we are awaiting approval for a Nebraska provider fee, which would be a substantial amount, and we're hoping to receive it in Q2 or Q3 as well."
As for the amount owed from payers and back payments, CommonSpirit said it tends not to disclose that figure.
"What I can tell you is that we have select payers, and we are in dispute over more than $100 million in some of our larger markets for delinquent payments that we believe we are entitled to," CFO Dan Morissette said. "It's a frustrating and slow process, often requiring arbitration or litigation when necessary. We are hopeful that some of these payers will step up and fulfill their contractual obligations to us."