Children’s Hospital reports $3.7 million loss in first quarter

The El Paso Children’s Hospital announced a multi-million dollar deficit during it’s quarterly report to commissioner’s court Thursday morning.

“This quarter, we saw a $3.7 million loss,” EPCH CEO Cindy Stout said. “However, as I have come on board, we have been able to establish our executive team and we are finding the opportunities, and we are confident as we move forward, we will continue to close those gaps.”

Stout said those Medicaid contracts were negotiated back in 2012 and 2013, and are primarily to blame for why the hospital is still upside down. She told ABC-7 it typically takes three to four months to renegotiate contracts and the hospital is hopeful that it will be on par with other Texas children’s hospitals by April.

“Our managed Medicaid contracts are well below market rates, so we are in the process of renegotiating those,” Stout said. “I can foresee over the next couple of quarters we will have a very different forecast.” Stout added it usually take 90 to 120 days to renegotiate contracts. “We foresee that through April we will have many renegotiated so that will be on par with other Texas Children’s Hospitals.”

Children’s Hospital filed for bankruptcy back in 2015 after the county hospital district and University Medical Center said Children’s owed it more than $100 million in unpaid rent.

The bitter fight ended when the bankruptcy judge approved a reorganization plan that called for Children’s to become a subsidiary of the county hospital.

The judge ordered UMC to forgive $58 million in rent and pay Children’s creditors, and for Children’s to pay back $48 million owed to UMC once it can afford to do so.

“As part of the bankruptcy there was a plan that was established to pay UMC and we are right on spot with that,” Stout said. “We are meeting those obligations.”

Stout said she did not have the hospital’s cash on hand value in front of her, but did say that they are ahead of the hospital’s projected goals.

“You want to make sure you have good cash on hand, however coming out of bankruptcy we are a young organization, when the hospital was project it was looking at not making money until the seventh or eighth year. We are at six years – again we continue to look at our operational efficiency and improving our contracts. We are confident it will happen before then,” Stout said.

University Medical Center spokesman Ryan Mielke said the county hospital is happy with how Children’s is doing as of late.

“When you have a new hospital, a young hospital, a baby hospital, if you will, they go through growing pains and things are turning around and looking really good,” Mielke said.

Mielke said the quarterly report by Children’s does not mean UMC is on the hook for more debt.

“UMC did extend a line of credit and this is not an a-typical situation this happens with most hospitals,” Mielke said. “This is something we do as a partnership and this is something because they are an important part of our community and it something that we do to ensure that their operations continue unabated.”