Recent Financial Audit Concludes Sierra View Medical Center is in Outstanding Financial Position and SVMC Sets the Record Straight

A Press Release from the Sierra View Medical Center

Porterville, CA – October 30, 2020: Regardless of the fiscal challenges in health care and fiscal challenges in the California economy during the pandemic, Sierra View Local Healthcare District Hospital (Sierra View) is in a strong financial position according to a recent audit report.

Moss Adams, a fully integrated professional services firm, recently conducted the annual financial statement audit. During the latest Board of Directors Meeting held on October 27, 2020, the team that handled the audit presented some financial highlights. One of the highlights was Sierra View’s Debt to Capitalization ratio which compares favorably to similar hospitals in Northern and Central California.

During the presentation, current Sierra View Board Member, Dan Smith asked what Moss Adams’ overall assessment of financial strengths was in comparing to similar hospitals and the answer he received was that the hospital is in an outstanding financial position. The liquidity and the balance sheet was found to be excellent.  SVMC endured the magnitude of the financial impact from the pandemic which left comparable hospitals in California financially crippled. This is in addition to not having a significant amount of government relief and support. It’s times like these when an auditing firm, such as Moss Adams gets a full look at how financially sound an organization is.

During the audit presentation, one of the CPA’s made mention that the hospital is well positioned to fight their way through situations such as the pandemic and in comparison to similar organizations, Sierra View is viewed as top of class. They also spoke highly of Doug Dickson, Sierra View VP, Chief Financial Officer and Merly Camat, Director of General Accounting. Because of the fantastic job their team did at producing financial statements that present fairly, in all material respects, the net position of Sierra View Local Health Care District as of June 30, 2020 and 2019, and the changes in its net position and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States.

There were also no audit adjustments proposed as a result of the audit conducted by Moss Adams. Accolades were given to management and the entire accounting team at Sierra View.

Board Chair, Rakesh Jindal, MD asked what Moss Adams’ conclusion was on growth of assets over the years. The answer from the Moss Adams CPA: capitalization maintaining a ratio of 5-0 of capital was grown and developed by the hospital’s net position. The equity compared to debt shows a very strong capital structure; ability to do that as a standalone hospital in Central California with payer mix challenges is something to be proud of.

Sierra View will continue to use its’ current financial practices to optimize its revenue cycle while emphasizing revenue integrity. Being a financially sound hospital means offering quality care and the ability to be a key component to the community in which it serves. Sierra View is proud of their teams that help them accomplish annual audits seamlessly such as this one. Sierra View’s clinical and financial teams have been jointly implementing strategies to keep operational costs down to protect the hospital in these unprecedented times.

In addition to the favorable audit, Sierra View Medical Center recently had its ‘A’ credit rating reaffirmed by Fitch Ratings, an award-winning provider of credit ratings and commentary and research. This rating denotes strong credit quality of financial commitment and has allowed an approximately $24.2 million of series 2020 refunding revenue bonds to be issued to Sierra View. For SVMC, this rating signifies a monumental step in the right direction of financial stability and the outcome of the 2020 audit validates that feeling of success.

A few other points to highlight from Monday nights board meeting that might dispel some recent misconceptions recently perpetuated about SVMC and set the record straight are as follows…

COVID-19 Grant Funding: Year-to-date the hospital has received approximately $3.3 million in grant funding from the Federal Government. The COVID-19 relief funds are regulated and audited by the government. SVMC has utilized these supplemental funds to acquire supplies and medical equipment, including PPE; providing additional intensivists coverage in the ICU; and to offset the $8-million-dollar loss in revenue that affected SVMC, largely due to the impact of COVID-19. Funds were not used to compensate upper management as was stated in a recent local news story.

Hospital License in Jeopardy: In a recent news story a report written by the California Department of Public Health (CDPH) is referenced regarding a case involving a CRNA who left their post during a C-Section. This departure resulted in the death of the mother 28 days after surgery. A “Root Cause Analysis” and plan of correction were completed and the event was self-reported to CDPH from SVMC resulting in an Immediate Jeopardy finding. The results of an Immediate Jeopardy finding include an in-depth (In SVMC’s Case: 19-month) review and a corrective plan was developed and implemented, once approved by CDPH. As of now, all steps in the corrective action plan have been completed and all fines have been paid. Immediate Jeopardy findings for hospitals in the state of California average 50 to 150 cases per year per the CDPH website. An immediate disclosure to the family occurred as did many further transparent conversations. In addition, SVMC supported staff through an internal peer to peer support program. SVMC was not in immediate jeopardy of losing licensure as stated in the recent news story and this incident is not a reflection of the team at SVMC. Our sincere condolences and thoughts go out to the family.  

CMS One-Star Rating: The overall quality star rating summarizes a variety of measures reflecting common conditions that a hospital treats along with how well each hospital performed. It should be noted that data used for the current one-star rating reflects some metrics that date back to 2016 and is not an accurate view of what is happening in 2020. A review of MRSA cases revealed the hospital had mistakenly reported 3 out of 5 of their total MRSA cases incorrectly. This process has been corrected and a checks and balance process has been put in to place but due to clerical error it did affect the overall score which resulted in part of the one-star rating. Please note: most of the ratings are based on Medicare fee for service patients only. Overall HCAHPS ratings are more reflective of what is currently happening and in 2020 SVMC received a 3 out of 5-star rating. For more information on how HCAHPS scores are achieved please visit www.cms.gov.

In conclusion, quality care is not just a clinical goal, it’s a priority that encompasses customer service, compliance and wellness for our community to thrive. The hospital at large continues to pursue ongoing quality improvement and strive to continually raise the bar in providing excellent health care to our patients.