The June figures are in for Morgan Memorial Hospital, and for most organizations, that signifies the end of the fiscal year.Â

But the hospital will not know whether it has ended the year in the red or in the black until later this fall, when the federal government decides whether or not the hospital has paid enough to Medicare for the year. As of right now, the total is still a budget unknown.

“Normally, we’d have a little better handle on how much [Medicare will demand],â€� said new hospital CEO H.D. Cannington. “We probably will have a better idea [of what will be required] at the end of ’08. But I haven’t been here very long, and [new CFO] Darlena [Kinnett] hasn’t been here very longâ€"I just don’t have a feel for the year, yet.â€�

Twelve-month figures for the hospital currently show the organization down about $114,000 for the year, after the county’s $1 million supplement is taken into account. But that total includes an estimated Medicare cost report settlement, to be paid by the hospital, of $565,000. That figure could go up, or downâ€"or Medicare could determine that it owes the hospital. The results won’t be known for weeks, until auditors submit year-end costs to the government for final settlement. Authority treasurer John Milliken likened the federal cost settlement system to that of personal income tax.

“It’s a little like the IRS,� he said. “You budget a certain amount of income tax to the government each month, but you don’t find out until you file your final income tax report whether you owe money or whether you get a refund.�

Last year, the hospital had to pay over a million dollars in cost report settlements, because Medicare concluded that the hospital had overestimated what the federal healthcare program for the aged would pay for services. This year, the hospital has budgeted even more conservatively than usual, and Milliken is cautiously optimistic.

“If [Medicare] comes along and tells us that we owe the [$565,000] that we have set aside, then the year-end will be pretty accurate,� said Milliken. “But if Medicare were to say we only owe $300,000, for example, then all that remaining set-aside goes right to the bottom line.�

Other notable hospital figures include a year-to-date figure of $20.58 million in gross patient revenue, which is the value that the hospital assigns to services rendered. Deductions from revenue, including the aforementioned cost report settlement, difference in contract prices for state and federal and insurance programs, and bad debt, could top $11 million at year end, leaving a net patient revenue for the yearâ€"as of Juneâ€"of $9.49 million, not including the county’s $1 million annual supplement. Operating expenses of $10.45 million result in a net operating income of $310,000; the current overall loss of $114,000â€"which could change before the books are closedâ€"can be chalked up to depreciation, amortization, and interest expenses.

Hospital officials are encouraged at the financial position of the hospital, especially when considering the cash-flow problems of just a few years ago. Nowadays, the hospital is able to cut a check each year to submit to the state as “matching funds� for increased federal grant money.

“Five years ago, we would have had to go the county to borrow that money for two weeks, just to get our federal money back from the state,� said Milliken.