Executives from Chicago-based CommonSpirit said on a Dec. 2 investor call they are still expecting to receive roughly $1.3 billion in one-time payments before the end of the fiscal year.
The system is awaiting COVID-19-related reimbursements from the Federal Emergency Management Agency, as well as tax credit dollars related to the Internal Revenue Service's employee retention program.
As of November, CommonSpirit has received about $192 million from FEMA. Benjie Loanzon, the system's senior vice president and corporate controller, said they have weekly meetings with FEMA officials.
"As I said in the past, the approval process is very complicated, but in the last meeting we had with FEMA, they indicated that they're not looking for any extension," Mr. Loanzon said. "Hopefully, we'll get most of this revenue in Q2 and Q3, about $850 million inclusive of the $192 million we already booked."
Regarding the tax credit, Mr. Loanzon said the system is expecting to receive about $500 million from the IRS sometime this year. The IRS said in October that it is accelerating work on processing the claims. The agency is processing roughly 400,000 claims, representing about $10 billion of eligible claims. The IRS said that a significant number of claims came during a period of "aggressive marketing by promoters," which led to a large percentage of improper, ineligible claims. IRS Commissioner Danny Werfel said the agency is working to process the claims as quickly as possible while guarding against improper payments.
Mr. Loanzon said CommonSpirit has about 600 claims.
CommonSpirit reported an operating loss of $331 million (-3.5% operating margin) in the first quarter of fiscal 2025 — which ended Sept. 30 — an improvement from a $402 million operating loss (-4.7% margin) reported during the same period last year.