A Delta County hospital that said Medicare loans drained its cash will get more than $1.4 million in advance payments from the state, but it’s not clear if that will be enough to stabilize it.
Board members of Delta Health, which owns Delta County Memorial Hospital and clinics on the Western Slope, on Monday said they had recently discovered almost all of their cash on hand was committed to paying off debts — meaning they had money in the bank, but couldn’t use it.
Board chair Jean Ceriani said Delta Health would be able to make payroll the next time checks were due, but would be seeking help to get through the cash crunch.
The hospital had been losing money for years, but Ceriani blamed the immediate crisis on the need to repay $11 million in advances from Medicare late last year.
The federal Centers for Medicare and Medicaid Services had essentially loaned hospitals some of their expected future payments to get them through the worst points of the pandemic, but when the time came to repay them, hospitals also were dealing with rising labor and supply costs.
Marc Williams, a spokesman for the Colorado Department of Health Care Policy and Financing, on Friday said the department planned to advance Delta Health, by day’s end, a payment of $653,060 from the Colorado Healthcare Affordability and Sustainability Enterprise, or CHASE, that it was supposed to receive in April and May.
Delta Health also will receive $818,262 in June payments from CHASE by April 21, he said. The payments aren’t loans, but an early delivery of money the hospital was already going to receive, Williams said.
All hospitals are expected to receive more payments through CHASE in June than in May as the department switches to its 2023 rates, Williams said. Hospitals pay a fee into CHASE, which is used to draw matching federal funds and redistributed to the hospitals. Some of the money is used to offset the cost of uncompensated care, while some goes toward covering people who became eligible when the state expanded Medicaid.
Representatives for Delta Health on Friday said they were still working through the process, and would discuss it with staff before making public statements.
The need to repay loans also was a major factor in a cash crunch that almost closed St. Vincent Health in Leadville, along with the decision to add services and billing problems that predated the pandemic. The Lake County hospital had to repay about $1.2 million to Medicare, and would have closed last year if not for a $480,000 bailout from the county and a $1 million advance from the state, according to Kaiser Health News.
The Colorado Hospital Association said other hospitals found the Medicare repayments challenging, but couldn’t offer more specific information at this point.
Hospital systems in the state were less profitable in 2022 than in previous years — though much of the difference was due to investment losses — and lawmakers recently appropriated $5 million to help stabilize Denver Health.
Board members said they weren’t aware of the extent of Delta Health’s financial problems until the chief financial officer unexpectedly resigned on March 13. An independent investigation found the financial documents they’d received didn’t accurately describe the hospital’s position, though they didn’t uncover any signs of fraud or other illegal activities.
CEO Matt Heyn left on March 24 and was replaced on an interim basis by chief legal officer Julie Huffman.
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