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Massena Memorial Hospital posts August profit thanks to low volume adjustment

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MASSENA — A check for nearly $2 million helped Massena Memorial Hospital have another profitable month in August.

But it’s a check that CEO Charles F. Fahd II said he really doesn’t want to receive.

Chief Financial Officer James L. Smith said the hospital received $1.75 million in federal funds as a “low-volume adjustment” for 2012. That money, according to Mr. Fahd, means that the hospital saw more than a 5 percent decrease in the number of Medicare admissions during the adjusted year.

“It’s obviously a lot of money. It’s nice to get it, but the reasoning for getting it is not a good thing. The only time we are allowed to have an adjustment is if volume drops significantly,” he said. “You can’t count on it every year. ... It’s not a good thing.”

In order to receive the money, hospital officials had to show they were making a significant effort to decrease their costs, including downsizing staff or decreasing expenses, Mr. Fahd said.

Mr. Smith said that, with the low-volume adjustment, the hospital’s August financials were significantly better than they had predicted.

“It turned a very poor revenue month into a pretty good revenue month. It showed us to be 5 percent over budget. Previously we were well over 10 percent below budget,” he said.

Overall, the hospital had a profit of $508,384 in August. It had budgeted a profit of $118,358. It had turned a profit of $19,541 in August 2012.

“What ended up happening is the net bottom line, which was going to be negative $450,000, ended up being positive $508,000,” Mr. Smith said.

Hospital officials had budgeted 217 inpatient discharges for August and finished the month with 177 — 18.43 percent below budget. They had recorded 228 inpatient discharges in August 2012.

Observation visits, however, were 7 percent above what was budgeted.

Outpatient registrations finished the month at 10,950, which was 3.50 percent below the budget of 11,347 for August. The hospital had 11,350 outpatient registrations in August 2012.

“Outpatient visits were down somewhat, but not to the same degree that the inpatient volumes were,” Mr. Smith said, noting that some of that was attributable to vacations by medical staff during that month.

Net patient revenue for August had been budgeted at $4.14 million and the hospital finished the month with $4.36 million, a 5.52 percent increase over its budget. It was $3.88 million in August 2012.

“Net patient revenues originally were $850,000 below budget” prior to receiving the low-volume adjustment, Mr. Smith said

The hospital was able to add the money from the adjustment to the August budget because it was received quickly, according to the chief financial officer, who said it had received a letter dated Sept. 16 notifying it that it would have the cash within 30 days.

It ended up arriving in six days and was deposited Monday, he said.

Year-to-date, the hospital revenues remain $1.4 million under budget. At this same period last year they were $1.6 million under budget.

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