Last year, after Fulton County Hospital's accounting firm did its annual audit, the team concluded, because of huge debt and no borrowing power, the hospital's chances of surviving the year were not good.
"The going concern opinion will simply say that we're not sure that this hospital can be sustained in business for the next 12 months," Dixon Hughes' Tommy Barnhart told the board last fall.
On Monday, Oct. 22, BKD, the hospital's new accounting firm, saw a big difference in financial status.
"Cash jumped from about $30,000 last year to over $600,000 this year, primarily due to the proceeds from the sale of home health assets," BKD Audit Manager Derek Pierce reported to the board.
Instead of a "going concern" opinion about survival, the hospital is seen to be on much better footing.
"The most important question (of an audit) is, "What kind of opinion did we issue on the audit? The one you want is the unqualified, which means we had no reservations about whether or not the financial statements were reasonably free of material misstatements," Pierce said. Unqualified is the opinion issued by BKD.
According to the audit, the sale of the hospital's home health license for $1.7 million dollars allowed FCH to pay bills and establish a cash reserve. The sale and an agreement to allow Ozarks Medical Center to take over day to day management decisions have made a big difference.
"There was some significant reduction in liabilities. Total liabilities went down 15 percent for last year as those obligations (debts) were settled," Pierce noted. "Employee expense costs, salaries and benefits together, went down about 17 percent, so that reflects some pretty aggressive efforts there (by management) to keep expenses down."
Running a small rural hospital is not easy, however, and, in the current fiscal year, there has been a struggle to keep bills current. This is the time of the year hospitals look at the amount received from Medicare and Medicaid, and a Cost Report settlement is determined, showing the hospital owes overpayments or is due reimbursement if it was underpaid.
"The Cost Report is nearing completion, and we got far enough along before the audit was done that we were able to estimate what the settlement was going to be," Pierce explained.
"It appears to be a pretty favorable settlement that resulted in an audit adjustment of about $450,000."
After the audit report was approved and the board went into its business session, OMC Chief Financial Officer Kim Thomson repeated the Cost Report news.
"You all do understand on the Cost Report, that means were are going to get cash?" Thompson asked.
Board members quickly indicated they "got it," and Thompson broke out in a laugh. "The $450,000 to $500,000 they are talking about will be cash coming in, so that is going to be excellent for Fulton County, since the liabilities have been building up again."
As hospital finances were discussed, Administrator Tony Thompson said, last month, bills 90 days past due were reduced from $477,891 to $349,342 and, "When we get that infusion of cash, we can get where we are current (on bills)."
The August board meeting was discouraging because of a big drop in in-patient and emergency room patients, but this month the news was better.
"So, for the month of September, the volume was back up a bit, which was good," Kim Thompson said. "You might remember, August was not a very good month, and we had lots of volumes that were down."
The September report showed that in-patient admissions and most other items were in line with budget. Total revenue was almost $30,000 over budget.
Year to date, the hospital is showing a net income loss of $74,677, but that is a big improvement over this time last year, when the loss was $304,778.
The November hospital board meeting is scheduled for Monday, Nov. 26, at 6:00 p.m. Meetings are held in the hospital conference room, and are open to the public.