An unqualified audit report reveals there are no significant internal control breakdowns at Bradley Healthcare and Rehabilitation Center.
Bill Matheney presented the audit results to the board.
“We didn’t have any significant disagreements with management during the course of our audit,” Matheney said.
“... There is no position management asked us to take on a particular accounting issue that was a condition on you choosing us for your audit.”
Matheney explained there were no significant matters to discuss, nor were there any cases of evident fraud.
He pointed out the facility’s cash flow is deteriorating with revenue lower than it was at the end of last year’s audit report.
“I don’t really like having to come and talk about the situation of loss. Believe me, I don’t like it any better than you do, but unfortunately that is what you have this year,” Matheney said. “One thing you might want to note there is income. Because your cash reserves have gone down, so has your income.”
Matheney warned the board to be very careful going forward, especially relating to the Affordable Care Act, recovery audit contractors and cuts at both the state and federal levels.
He noted the budget cuts Bradley Healthcare has made over the past year.
According to Matheney, there are only so many cuts that can be made before the quality of care is affected.
However, he praised BHRC for the amount of money placed back into patient care.
“Your actual mission is taking care of patients, it is not some sort of administrative function. You are not like the Red Cross or one of these entities who are not-for-profit who plow back their money into administrative costs,” Matheney said.
“Sixty-eight percent of your funds go back to patient care. I think that is very good, compared to your peer group.”
The audit revealed BHRC is below average on borrowing.
According to Matheney, the only good reason to borrow money at this point would be for the expansion of facilities.
“You are in excellent shape, because you got the debt you had years ago paid off,” Matheney said. “And you managed it so you did not get deeply in debt.”
He ended his presentation by suggesting the facility look into different revenue resources like physical therapy or adult day care as alternative avenues for revenue.
Board members discussed how to best address the current 168-resident census low. Resident numbers must at least be in the 180s to ensure full reimbursement and profit from increased insurance rates.
Dennis Burtnett, BHRC administrator, pointed out the recent notice by the Centers for Medicare & Medicaid Services damaged the public’s opinion of the center.
In an earlier interview, Burtnett explained the notice is a part of the state inspection process. Problems found within a nursing home during a state inspection automatically place the organization at risk for losing Medicare and Medicaid services.
The nursing home is given time to write a plan of correction and prove it has been effective in altering problems.
CMS followed its initial notice with a second one stating BHRC will continue to accept Medicare and Medicaid services.
Board Chairman John Stanbery said the loss of revenue and low census must be approached from all avenues. A committee will be formed to look at these issues.