Hospitals had a challenging financial year in 2022 as expenses skyrocketed without a similar lift in revenue and reimbursement.

 Key ratios

Source: Moody's Investors Service, "Medians - Operating performance weakens as tough expense environment persists." The report was released Sept. 7, 2023 and includes data from freestanding hospitals, single-state and multistate healthcare systems for the 2022 fiscal year.

1. Operating margin: -0.3 percent

2. Excess margin: 2.4 percent

3. Operating cash flow margin: 4.9 percent

4. Return on assets: 1.7 percent

5. Three-year operating revenue CAGR: 6.5 percent

6. Three-year operating expense CAGR: 7.7 percent

7. Cash on hand: 205.6 days

8. Annual operating revenue growth rate:

9. Annual operating expense growth rate:

10. Total debt-to-capitalization: 31.9 percent

11. Total debt-to-operating revenue: 31 percent

12. Current ratio: 1.7x

13. Cushion ratio: 24.9x

14. Annual debt service coverage: 4.0x

15. Maximum annual debt service coverage: 3.6x

16. Total debt-to-cash flow: 3.6x

17. Capital spending ratio: 1.1x

Over 400 hospitals and medical facilities are now using an underpayment recovery service that is a risk-free addition to their Revenue Cycle Management (RCM) efforts. 

This forensic audit is performed on remittances AFTER all other RCM efforts have been completed including other internal or external underpayment recovery efforts. 

The company only engages remittance files that their clients expect no further revenues from. Therefore, their services compliment all other RCM efforts and provides new revenues…100% of the time.

The Underpayment System historically uncovers 5-30% of commercial payments which have been paid incorrectly on every analysis. Their collection statistics for commercial payer underpayments are 85-90% of identified claims. The majority of contracts allow providers to appeal claims that have been underpaid or paid incorrectly for up to 12 months from the last response by the insurer.

After 12 months, they will expire, at which point hosputals will never be able to bill or collect. This system recovers additional underpayments owed on zero balance accounts. Dollars underpaid after EMR/EHR and billing systems have fully processed claims as “PAID IN FULL”.

Larry G. Potter

Senior Advisor

Lgpotter33@gmail.com