(This article has been updated with a correction.)
UnityPoint Health, a 12-hospital system in West Des Moines, Iowa, reported an increase in operating surplus in 2013, in part due to higher reimbursement from Medicaid and its value-based contracts.
The not-for-profit group saw a 34.5% year-over-year increase (PDF)
in operating income during fiscal 2013, which ended Dec. 31. It reported $82.6 million in operating income on $2.8 billion in revenue, compared with $61.4 million on $2.7 billion in revenue during fiscal 2012.
Patient service revenue from Medicaid reimbursement was nearly 16% higher in 2013 than it was the prior year. The system pointed to a 2011 policy change in Iowa that levied an annual tax assessment on certain hospitals to fund Medicaid and obtain federal matching dollars. However, a portion of those funds were returned to hospitals in the form of higher Medicaid reimbursement that is now closer to the cost of providing care.
A similar policy exists in Illinois, where UnityPoint has two hospitals. Medicaid reimbursement from Illinois nearly doubled year over year.
UnityPoint also reported that it recognized $7.8 million in revenue from value-based contracts, a significant increase from only $2.3 million in 2012. Its value-based contracts include its Trinity Pioneer Accountable Care Organization, which began operating Jan. 1, 2012; a commercial ACO in partnership with Wellmark Blue Cross and Blue Shield, which was formed April 1, 2012; and a Medicare Shared Savings ACO, which was accepted into the program July 1, 2012.
It also booked $25.1 million in revenue from the CMS' Electronic Health Records Incentive Program, up from $17.5 million the prior year.
Yet the system also saw a 10.8% increase in revenue from self-pay patients—leading to a 15.2% increase in its provision for uncollectable accounts, which was $151.3 million.
The financial statements did not include its most recent affiliation with Meriter Health Services
, Madison, Wis., a deal that closed Jan. 1, 2014, and will bring UnityPoint into its third Midwestern state.
However, the system said Meriter had 2013 net revenues of $456.6 million, and its for-profit Physicians Plus Insurance Corp. had revenues of $346.5 million. Follow Beth Kutscher on Twitter: @MHbkutscher(This article has been updated to indicate UnityPoint had a 34.5% year-over-year increase in operating income during fiscal 2013.)