Roy Exum: Erlanger Bets On Biden

  • Wednesday, October 21, 2020
  • Roy Exum
Roy Exum
Roy Exum

At first blush the news that Chattanooga’s largest public hospital ended its fiscal year with $35.3 million net income is miraculous, particularly when every hospital in America is reeling after being decimated by the curse of the COVID-19 virus. Far be it from me to cast doubt on a certified independent audit, and we all understand that $35.3 million net doesn’t include interest, which will level out to be more in the neighborhood of $28 million or $29 million. Regardless, for struggling Erlanger that’s great news … or is it the truth?

I find the kicker in the 50-odd page report done by Knoxville’s PYA accounting firm is located on Page 42 of the extensive findings where it states “the amount reported as revenue from the PRF (CARES Act Provider Relief Fund) could be reduced by $0-$40 million.”

Wait! You are telling me the audit could be overstated by $40 million?

In other words, the accountants are betting on an election-day miracle.

Erlanger got approximately $70,225,000 from the Coronavirus, Relief, and Economic Security (CARES) Act to provide essential funding during the pandemic. When that money was given, it was with the knowledge about $40 million of the $70M was a loan – neither a gift nor a grant.

Further, in ‘Note N’ of the audit statement it reads, “Subsequent to June 30, 2020, the Primary Health System (Erlanger) received additional PRF funding of approximately $10,000,000 that has not been reported in the accompanying combined financial statements.” I struggle to understand how $10 million has not been reported in a certified audit?

Then there is this paragraph, again on Page 42 of the audit: “Additionally, the Primary Health System received $93,800,000 of payments issued under the Medicare Accelerated and Advance Payment (AAP) Program, which have been reported as a current liability in the accompanying financial statements. Such amounts are intended to fund short-term cash flow needs and will be recouped by the Center for Medicare and Medicaid Services (CMS) through an offset to future Medicare claims.”

So, explain this subterfuge to me … If the $93.8 million which must be reimbursed and is therefore a liability, how is $40 million of the PRF’s $70.2 million, which must also be repaid, reported as earned revenue? What are Erlanger’s actual earnings, really? Be upfront and honest.

Last week Trump issued an order that extended the $40M loan until next year, but again the language clearly stated the money would still have to be paid back. According to the audit report, $55.9 million of the $70 million was “booked” as revenue with the remaining cash -- what? $14 million? -- obviously being held in what some hospitals call a “slush fund” for lack of a better word. I’m thinking, to cushion the 2021FY because it somehow and quite mysteriously wasn’t included in a certified audit. At least not that I could find. Forgive me, I am not trying to cast aspersions, but this is why many folks don’t find Erlanger trustworthy about anything.

If this is so, the $55.9 million Erlanger showed as revenue is really $15.9 million plus the $40M loan. But the accountants wrote the revenue “could be reduced by $0-$40 million.” Here’s how that works: There is a guarded but frantic prayer among hospital lobbyists that the Biden-Harris ticket will “wash” – or forgive – the $40 million bail-out dough that Trump wants back. This could happen, but only if the Biden/Harris ticket is a winner. We’ll just have to wait and see but should a political pipe dream be part of a certified audit? I can’t get my arms around this, nor can I see how CEO Will Jackson is using such skewed reasoning to seek a raise from the hospital trustees.

If Biden were to win and forgive the billions of debt the nation’s hospitals share, oh happy day. But if the Trump-Pence ticket prevails, Erlanger will show a disastrous loss – the $35.3 million net being squashed by the $40 million payback. And where is that $10 million the audit clearly states, “has not been reported in the accompanying combined financial statements”?

Then there is this:

* * *

ERLANGER EMPLOYEES ALLEGE OVERTIME, COVID-19 IRREGULARITIES

In my daily emails arrivesthis plea:

“I just wanted to reach out to you in regard to Erlanger’s continued efforts to deceive and undermine their staff.

“(Certain hospital employees) are being offered an extra 30.00 per hour and not getting paid overtime once over 40 hours are reached. They are giving the employee an option to take $10.00 extra an hour to come in and work a shift not regularly scheduled and collect their overtime pay, or collect no overtime pay and receive 30.00 extra per hour.

“There are also multiple cases of employees contracting COVID-19 after caring for patients with the virus and being repeatedly exposed who are not being compensated for having to take off work due to their illness.

“Workforce is telling employees that they are not eligible for compensation because they were not exposed in the workplace. They are told they can return to work as soon as they are fever-free for 24 hours despite having any other lingering symptoms of COVID-19.

“(The hospital does) not require an employee to have a negative COVID-19 test to return to work after being out of work for a confirmed COVID-19 infection. Employees are also not being tested for COVID-19 after a confirmed exposure to COVID-19. They are being told as long as they had on a surgical mask and goggles then it’s not considered an exposure, so no test is needed.

“Please help. You are the only voice these employees have against the injustices.”

* * *

Gee, that doesn’t sound right, does it?

royexum@aol.com

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