COVID-19 Response: Immediate Cash Planning Update and CEO Roundtable Kevin DeRonde, CEO, Mahaska Health Tony Rinaldi, Executive Vice President, Fairview Hospital Daryl Weaver, CEO, Baptist Medical Center – Leake Eric Shell, Chairman, Stroudwater Associates April 23, 2020 Information related to the COVID-19 pandemic changes frequently. The content of this presentation is accurate to the best of our knowledge as of the day and time it was presented and will not be updated continuously once it is posted. Please reach out to the presenters with any questions or concerns.
Panelists Eric K. Shell, CPA, MBA Kevin DeRonde, MBA, MHM • Chairman, Stroudwater Associates • Chief Executive Officer, Mahaska Health • (T/F) 207-221-8252 • 641-672-3392 • (C) 207-650-2702 • kderonde@mahaskahealth.org • eshell@stroudwater.com Anthony Rinaldi Daryl Weaver, MHA • Executive Vice President, Fairview Hospital • Chief Executive Officer, Baptist Medical Center – Leake • (413) 447-3006 • (601) 267-1422 • arinaldi@bhs1.org • daryl.weaver@bmhcc.org 2 Information related to the COVID-19 pandemic changes frequently. The content of this presentation is accurate to the best of our knowledge as of the day and time it was presented and will not be updated continuously once it is posted. Please reach out to the presenters with any questions or concerns.
Agenda Overview and Introductions Update to Immediate Cash Planning CEO Roundtable 3 Information related to the COVID-19 pandemic changes frequently. The content of this presentation is accurate to the best of our knowledge as of the day and time it was presented and will not be updated continuously once it is posted. Please reach out to the presenters with any questions or concerns.
OVERVIEW AND INTRODUCTIONS
Mahaska Health Kevin DeRonde, CEO 5 Information related to the COVID-19 pandemic changes frequently. The content of this presentation is accurate to the best of our knowledge as of the day and time it was presented and will not be updated continuously once it is posted. Please reach out to the presenters with any questions or concerns.
Mahaska Health Critical Access Hospital Oskaloosa, Iowa (population 11,523) Serving Mahaska County since 1907 (population 22,181) 6 Information related to the COVID-19 pandemic changes frequently. The content of this presentation is accurate to the best of our knowledge as of the day and time it was presented and will not be updated continuously once it is posted. Please reach out to the presenters with any questions or concerns.
Fairview Hospital 29 Lewis Avenue Great Barrington, MA 01230
Baptist Medical Center Leake • 25-bed Critical Access Hospital • Part of the 22-hospital Baptist Memorial Health Care system based in Memphis, TN • Location: Carthage, Mississippi Serving: Leake County, population 22,763 • Leake County is a rural, mostly farming community; however, the county is adjacent to the tri-county Jackson, metro area, which is the population, economic and health care center of the state. County demographics trend older than typical urban areas with higher incidences of poverty and chronic disease. Leake County Map: Covid-19 Case Density as of April 22, 2020
UPDATE TO IMMEDIATE CASH PLANNING
Cash Planning Overview Prepare 26-week, weekly cash flow projection Immediately file for accelerated/advanced payments, which will support operations for next 90 days Recognize receipt of your organization’s Public Health and Social Services Emergency Fund Grant $30B distributed on 4/10 and continue preparing information to support Recognize that additional grant revenue under the PHSSEF program will be distributed via the remaining $70B of CARES Act and an additional $75B approved by Senate on 4/21 Recognize Small Rural Hospital Improvement Program (SHIP) grant between $71K and 84K If applicable, submit loan application to local Small Business Administration (SBA) lenders for Payroll Protection Program (PPP) For organizations not eligible for SBA PPP, evaluate payroll tax credits and deferrals File Federal Emergency Management Agency Request for Public Assistance application and begin tracking eligible costs Evaluate Economic Injury Disaster Loan (EIDL) and Emergency Economic Injury Grants Evaluate Main Street Lending program as source of additional capital Request 12-month principal and interest deferral on USDA Community Facilities Direct Loans Critical Access Hospitals (CAHs) to prepare interim cost report and submit to MACs File updated Medicare rates with Medicare Advantage plans Negotiate PIPs with third-party payers Work with bank to open and/or expand line of credit 10 Information related to the COVID-19 pandemic changes frequently. The content of this presentation is accurate to the best of our knowledge as of the day and time it was presented and will not be updated continuously once it is posted. Please reach out to the presenters with any questions or concerns.
Financial Proj ection Prepare 26-week, weekly cash flow projection to enable better short and medium-term decision making Minimum of 26-week cash projection • Necessary for hospitals to understand a number of variables impacting cash including: Beginning cash balances • • Reduced volume (and possible increase) and timing of cash impact • Increased expenses for personal protective equipment • Cash impact on changing labor costs • Changes in cash from CARES Act provisions • Receipts and payments (i.e., accelerated payments) • Potential for increased bad debt • Opportunity for other balance sheet accounts affecting cash • Long-term debt 11 Information related to the COVID-19 pandemic changes frequently. The content of this presentation is accurate to the best of our knowledge as of the day and time it was presented and will not be updated continuously once it is posted. Please reach out to the presenters with any questions or concerns.
Financial Proj ection • Example (https://www.stroudwater.com/?resources=stroudwaters-26-week-cash-flow-model) • Beginning cash balance of $2.5M • COVID-19 Funding from Medicare accelerated payments, SBA PPP loan, PHSSEF and SHIP grants (other programs not included) • Assumed volume declined 50% beginning 3/15 and continuing through projection period • Assumed expenses remained constant during the projection period • After 26 weeks, cash was $7.0M, $4.5M greater than start 12 Information related to the COVID-19 pandemic changes frequently. The content of this presentation is accurate to the best of our knowledge as of the day and time it was presented and will not be updated continuously once it is posted. Please reach out to the presenters with any questions or concerns.
Accelerated/ Advanced Payments Immediately file for accelerated/advanced payments, which will support operations for next 90 days • Medicare Accelerated/Advanced Payments • Intended to provide necessary funds when there is a disruption in claims submission/processing or offered in circumstances of national emergencies in order to accelerate cash flow to impacted health care providers • Amounts (based on 7/1/2019-12/31/2019 PS&R information): • 100% of Medicare payment amount for a 3-month period • CAHs are able to request 125% of Medicare payment for a 6-month period • Timing: • Receipt within 7 calendar days of receiving request • Request submitted to MACs using forms found on their websites 13 Information related to the COVID-19 pandemic changes frequently. The content of this presentation is accurate to the best of our knowledge as of the day and time it was presented and will not be updated continuously once it is posted. Please reach out to the presenters with any questions or concerns.
Accelerated/ Advanced Payments (continued) • Medicare Accelerated/Advanced Payments (continued) • Repayment: • For most providers, repayment begins 120 past receipt and expected to be repaid in full within 12 months for CAHs and 3 months for others • At the end of the 120-day period, 100% of claims submitted by the provider will be offset to repay the accelerated/advanced payment • Hardship exceptions allowed if necessary • Interest: • Interest free for first 395 days (one year plus 30-day notification period) for CAHs and 210 days (six months plus 30-day notification period) for others • Interest at 10.25% after 30-day notification period 14 Information related to the COVID-19 pandemic changes frequently. The content of this presentation is accurate to the best of our knowledge as of the day and time it was presented and will not be updated continuously once it is posted. Please reach out to the presenters with any questions or concerns.
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