Dive Brief:
- San Francisco-based, 37-hospital Dignity Health says revenue from the California provider fee program was instrumental in creating an increase of more than 300% in the system's operating surplus for the fiscal second quarter.
- Dignity also credited "higher volume, a shift from self-pay to Medicaid coverage and better reimbursement rates from insurers" as contributors to its increased surplus, reports Modern Healthcare. Even discounting the provider fee payments, Dignity's revenue increased by 10.7% during the second quarter in comparison to the prior-year period.
- Dignity received $420 million in provider fee revenue for the period of January through December.
Dive Insight:
California's provider fee program was approved for an extension by CMS in December after being on hold for much of 2014 while the extension was pending, reports Modern Healthcare. That drop in funds had notably impacted California hospitals.
The program uses fees assessed by the state on hospitals, which draw matching federal funds, to increase reimbursements to hospitals that rely heavily on Medi-Cal.
For the second quarter ended Dec. 31, Dignity reported an operating surplus of $377.9 million on $3.7 billion in revenue. In Q2 of the previous year, the hospital reported an operating surplus of $91.8 million on $2.7 billion in revenue.