Northwell receives $1B in CARES Act cash to offset COVID-19 financial damage

New Hyde Park, N.Y.-based Northwell Health saw revenue increase in the first quarter of this year, but the COVID-19 pandemic pushed the 19-hospital system to an operating loss, according to recently released financial documents

Northwell saw revenue increase 4.5 percent year over year to $3.08 billion in the first quarter of this year. The system said the revenue growth was attributable to several factors, including increased payment rates and continued revenue cycle initiatives.

Rising expenses offset the system's revenue growth. Northwell's operating expenses for the first quarter of this year were up 8.5 percent compared to the same period a year earlier. The increase was partially attributable to costs associated with Northwell's response to COVID-19.

"No other health system in NYS has treated as many COVID-19 patients as Northwell and Northwell was among the health systems that treated the most COVID-19 patients in the US," management wrote in comments on the financial results.

Northwell ended the first quarter of this year with an operating loss of $141 million, compared to an operating loss of $19.7 million in the same quarter of last year. The health system said the negative financial impact of the COVID-19 pandemic on its operating results for the first quarter of this year is estimated to be $170 million, primarily due to reductions in patient volume in the latter part of March. Management estimates a $330 million financial hit from the pandemic in April. 

"Despite the continuing challenges and factors pressuring operating margins still being caused by the crisis, management is focused on the recovery and evolution of operations and improved operating results," management wrote in comments on the financial results. "This effort is being managed through an incident command structure that is comprised of collaborative workgroups led by Northwell's executive management team, and includes plans to attempt to restore operating results to pre-COVID-19 levels through various initiatives."

After factoring in investments and other nonoperating items, Northwell reported a net loss of $710 million for the three months ended March 31. In the same period a year earlier, the system posted net income of $201 million. 

To help offset financial damage, Northwell received funds from the $175 billion in relief aid Congress has allocated to hospitals and other healthcare providers to cover expenses and lost revenue tied to the pandemic. The health system said it received $1 billion in federal grants after the first quarter ended March 31. 

The health system also applied for and received about $1 billion of Medicare advance payments, which will be repaid over eight months starting in August. 

More articles on healthcare finance:
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U of Vermont Medical Center furloughs about 450 employees

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