Franklin, Tenn.-based Capella Healthcare lost $6.5 million in the second quarter, the fifth straight quarter in which the hospital operator posted red ink.
The $6.5 million loss was $5.2 million higher than the loss it recorded in the second quarter of 2012. However, second-quarter revenue ticked up 0.7 percent, from $184.3 million last year to $185.5 million.
Capella officials attributed the loss to higher operating expenses, lagging admissions, $1.2 million in Medicare cuts from sequestration and the discontinuation of Medicare's "low quartile" program. In fiscal years 2011 and 2012, the healthcare reform law required CMS to make $400 million in additional payments to hospitals that were located in counties with the lowest quartile of per enrollee Medicare spending, but those payments did not extend into FY 2013.
Capella has not recorded positive earnings since the first quarter of 2012, when it tallied a profit of $4.7 million.
For the six months ended June 30, Capella's losses exceeded $12 million. Revenue in the first six months was $372.7 million, down 2.2 percent from $381.2 million in the same period a year ago. Capella's adjusted EBITDA stood at $42.6 million compared with $57.2 million in the first six months of 2012.
Admissions across Capella's hospitals fell 2.6 percent in the second quarter, while inpatient surgeries plunged 3.9 percent. However, second-quarter outpatient surgeries rose 6.4 percent.
Capella currently owns or operates 13 acute-care hospitals. In June, the company announced it ended negotiations with Chesterfield, Mo.-based Mercy. Mercy planned on selling Mercy Hospital Hot Springs (Ark.) to Capella's National Park Medical Center, also in Hot Springs, but the deal faced challenges from both the Vatican and the Federal Trade Commission.
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