LOGAN — A recent state audit report on Hocking County raised questions about the continued financial viability of the Hocking Valley Community Hospital (HVCH).

The hospital’s chief financial officer indicated Friday, however, that HVCH has already taken a number of steps that are improving its financial health, and is being highly proactive in responding to the challenges it faces from the COVID-19 pandemic.

“The main reason behind the going concern designation (in the audit report) was the need to improve the strength of the hospital’s balance sheet,” explained CFO Julie Grow. “Although the COVID-19 pandemic made that quite a challenge, the hospital worked very hard in 2020 to make the needed improvements. We carefully thought out every dollar of the Provider Relief Funds we spent and looked for and applied to every grant available to us. This has allowed us to offset the losses from the pandemic – which was exactly what the funds were intended to do – while working to ensure the changes we made were successful as well.”

The audit report, issued last month by the Ohio Auditor of State, is on a single audit of Hocking County for the year 2019, which was conducted by the private accounting firm Milhuff-Stang. It includes an extensive section dealing with HVCH, which is treated as a “component unit” of the county for financial reporting purposes.

Among other observations in the audit, it notes that HVCH saw an operating loss of about $3.16 million in 2019, and that at the end of that year, its current liabilities exceeded its current assets.

“These factors could be indicative of the hospital’s inability to continue as a going concern,” it adds.

The report recognized that at the time it was prepared, HVCH was already looking at different opportunities to increase reimbursement and net revenue, including using more swing-bed capacity; increasing insurance provider coverage for its pain clinic; using more contract pharmacy benefits; changing the hospital’s outpatient psychiatric clinic to a hospital-based facility, with the hopes that this would increase reimbursements; and changing most of the medical practices of Hocking Valley Medical Group, Inc., (HVMG) a separate not-for-profit professional corporation, into a rural health clinic, and its general surgery practice into a hospital-based clinic.

The hospital was also anticipating that receipts would increase from the state’s Upper Payment Limit Program, which provides access to available federal funding up to 100 percent of the Medicare upper payment limits for inpatient hospital services rendered by Ohio public hospitals to Ohio Medicaid consumers. This boost in revenues was expected to result due to increased funding of the program by the Ohio Hospital Association.

Essentially, according to Grow, all of these opportunities are being realized in whole or part.

Despite the pandemic, Grow said, the hospital has seen a 5 percent increase in swing bed utilization over the previous year. Changes made to provider coverage in the pain clinic, she said, have “both decreased expenses and improved profitability,” with minimal disruption of services.

On the prescription drug front, according to Grow, “Shriver’s Pharmacy contracted with HVCH effective July 1, 2020 and the partnership is growing to realize benefits for both the patients and the hospital.”

Changes in HVMG are also helping, she said. The company’s family practice and pediatric service lines were certified as Rural Health Clinics in December 2019. “This has greatly improved reimbursement for this service line to allow us to treat a high percentage of Medicare and Medicaid patients in the community,” Grow told The Logan Daily News. “These service lines also adopted telehealth capabilities early in the pandemic to allow for continuity of patient care.”

Finally, Grow said, the hospital has seen an increase in receipts from the Upper Limit Payment Program.

Grow said overall HVHC has “improved several key financial indicators, including days cash on Hand, liabilities, and total assets. This has certainly not been an easy task; however, I feel the hospital has put in a lot of work this year to stabilize the hospital and improve our sustainability.”

She added that one silver lining to the dark pandemic cloud has been that “the importance of rural healthcare has been pushed into the national spotlight and is finally receiving the attention it deserves. There were rural hospitals across the country being forced to close their doors, leaving millions without access to care. COVID-19 was a wakeup call to our state and national leaders that this was simply unacceptable.”


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