This broadcast is posted on behalf of Jean E. Robillard, MD, Vice President for Medical Affairs, and Dean, UI Carver College of Medicine, and Kenneth P. Kates, Associate Vice President, UI Health Care, and Chief Executive Officer, UI Hospitals and Clinics.
We want to make you aware of a discussion we had today with the Board of Regents, State of Iowa, that you may hear about in the media.
As you know, we are caring for a record number of inpatients, with the census often in the 90 to 95 percent range. University of Iowa Stead Family Children’s Hospital has also been quite full, exceeding our expectations. The care provided continues to be exceptional. You are also to be commended for doing an excellent job in managing expenses. As of February, we are running about 3.5 percent under budget for expenses. Keep up the good work!
Despite gross revenues being above last year and spending less than budgeted, UI Health Care is experiencing a decline in net revenue—that is, we are receiving less money than budgeted. This is due to a dramatic decrease in our collection rate.
Over the past few months, we have been experiencing a high level of inaccurate payments, denials, and retroactive adjustment in payments from the Medicaid managed care organizations. In addition, we are seeing a rapid and dramatic increase in our Medicaid receivables. In fact, we have been waiting more than 270 days for more than $21 million in Medicaid payments. These issues together have combined to lead us to not meet our budget targets. As you know, a strong margin is important to be able to continue to invest in new programs, equipment, and facilities that improve care, education, and research.
We shared this information with the Board of Regents today to inform them of the budget challenges we are experiencing and gain their assistance in working with the state and the Medicaid managed care organizations in resolving the issues. Until then, we have to continue to be careful about our expenses this year and develop responsible budgets for the next fiscal year.
It is our hope that this is a temporary issue and will be resolved soon. In the meantime, please continue to focus on providing excellent care to our patients. We will keep you informed as progress is made on resolving the revenue issues. If you have questions in the meantime, please talk with your administrator.
Thank you for all you do.