WinnMed CAO Says Reimbursement Timing Affecting Cash as Hospital Invests in Growth

Without your donation, some stories vanish. Support Decorah News. DECORAH — WinnMed Chief Administrative Officer Steve Slessor told the hospital's board that the organization posted an operating loss in January and has seen a notable drop in cash reserves this fiscal year. However, Slessor explained most of the change can be attributed to timing issues with reimbursements and other accounting factors. During a financial update to the WinnMed Board of Trustees, Slessor said the hospital recorded an operating loss of about $305,000 in January, driven largely by revenue falling short of projections and expenses slightly exceeding budget. Gross patient revenue missed the monthly budget by about $1.2 million, while expenses were $131,000 higher than planned, contributing to the loss, Slessor said. For the fiscal year so far, the hospital has a year-to-date loss of roughly $715,000, which Slessor said is below expectations but not entirely surprising given that WinnMed planned for a much tighter financial year after several strong years of performance. "We expected this year to be not as rosy as prior financial years," Slessor told the board. "We projected about a break-even budget going into this year." Cash decline draws attention More concerning to leadership was the decline in the hospital's cash balance. WinnMed began the fiscal year with about $32 million in cash but is now holding roughly $27 million, prompting hospital leaders to closely examine where the difference came from, "That clearly created a lot of discussion with our finance and leadership teams to figure out, 'Yeah, we should be experiencing a little bit of cash reduction where we do have an operating loss, but not that much,'" Slessor stated. Slessor said the hospital's operating loss explains only a small portion of the drop. Much of the difference is tied to reimbursements and revenues that have been recorded on financial statements but whose cash payments have not yet arrived. One of the largest factors involves about $2.8 million in Medicare-related payments the hospital expects to receive but has not yet collected due to administrative and processing delays. Part of the issue stems from a nationwide Medicare billing problem involving radiology and pathology claims, while another portion relates to provider documentation requirements that temporarily halted payments for some services. The hospital is also waiting for about $2.5 million in Medicaid directed payments that have been recognized as revenue but will not be paid out until installments arrive between March and July. Other Factors Affecting Cash About $1.018 million repaid to Medicare after annual cost report reconciliation. Capital purchases totaling about $700,000 so far this year. Debt principal payments tied to the hospital's building project. Timing differences for county tax revenue and grant reimbursements. After accounting for those items, Slessor said the hospital's current cash balance is close to what financial models predicted. "What this tells us is that there's not a big bogey in the income statement," he said, meaning the cash changes largely reflect expected timing differences rather than hidden financial problems. Outlook Tied to Reimbursements and RevenueSlessor said leadership is optimistic that cash levels will stabilize as delayed payments arrive and Medicaid directed payments begin coming in. He described the outlook as "high optimism" for near-term improvement in cash flow once those reimbursements begin processing. Still, he cautioned that the hospital must begin generating at least break-even operations in the coming months to sustain long-term financial stability. Current performance, he said, is "tolerable for a year of big investment" because WinnMed has been expanding services and continuing work tied to its building project. But sustained losses would eventually limit the hospital's ability to fund future equipment and facility upgrades. Board Receives Financial EducationBefore the financial update, the board heard a financial education presentation from Joe Splinter of Eide Bailly LLP, who reviewed how trustees should interpret hospital financial statements. Splinter said board members do not need to perform detailed accounting work but should focus on recognizing trends and asking questions when numbers shift unexpectedly. "The board doesn't want to dive into the details all the time," he said. "What we want the board to do is stay above the detail and understand why it matters." He encouraged trustees to compare current results with previous months and prior years to identify significant changes in revenue, expenses or cash balances. Splinter also highlighted key financial indicators commonly used in hospital oversight, including: Days of cash on hand Days in accounts receivable Salaries as a percentage of revenue Debt service coverage ratios He emphasized the importance of cash collections and efficient billing practices, noting that delays in collecting patient or insurer payments can significantly affect hospital finances. "Cash really needs to be coming in the door," Splinter said, "or it will be coming in the door." Growth Brings Expected Financial PressureDespite current challenges, Slessor noted that WinnMed has expanded services and completed major facility investments in recent years. Those expansions often create short-term financial pressure while new programs ramp up patient volume. Slessor told trustees that while the current fiscal year may be weaker financially than recent ones, the hospital expects improved performance as patient volumes increase and reimbursement timing issues are resolved. 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