Board of Directors September 28, 2017 - Covenant Care

[Pages:30]Board of Directors September 28, 2017

COVENANT HEALTH AND COMMUNITY SERVICES, INC. BOARD OF DIRECTORS MEETING September 28, 2017 at 8:30 a.m.

Conference Call: 1 (719) 457-6209 Passcode: 170672#

AGENDA (p. 1)

CONVENING OF MEETING

TOM OWENS

MINUTES OF THE COVENANT HEALTH AND COMMUNITY SERVICES BOARD OF DIRECTORS MEETING OF JULY 27, 2017

(pp. 2-4) ***** TOM OWENS

COVENANT CARE AUGUST 2017 AND YTD FINANCIAL STATEMENTS

FOCUSED DISCUSSION

INTRODUCTIONS: COO; VP, FINANCE

WFCC UPDATE

(pp. 5-17) ***** ODIN BERG

(pp.18-19 )

JEFF MISLEVY JEFF MISLEVY

QRSC COMMITTEE REPORT

KARA BENEDICT

FOUNDATION NAME CONSOLIDATION PRESIDENT'S REPORT

AARON WEST JEFF MISLEVY

OTHER BUSINESS AS SUBMITTED ADJOURNMENT

TOM OWENS TOM OWENS

NOTES: **** DENOTES VOTE OR OTHER ACTION REQUIRED

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Covenant Health and Community Services, Inc. BOARD OF DIRECTORS MEETING July 27, 2017

MINUTES

MEMBERS PRESENT:

Carey King Don Haferkamp Jamie Campbell Jeff Mislevy JT Young Patrice Villemure Rodney Guttmann Roger Poitras Susan Davis Steve Sarros Teresa Dos Santos Tom Owens Xan Smith

MEMBERS ABSENT:

Bill Greenhut Brett Parra Janet Kinney Kent Skolrood Wanda Kaye Hambrick

LEADERSHIP STAFF:

Todd Fisher Odin Berg Amy Bajjaly Aaron West Rhonda Jordan Kara Benedict

INTRODUCTION

Mr. Owens convened the meeting at 8:34 a.m. and thanked everyone for attending.

MINUTES

Mr. Owens called for a motion to approve the minutes of the Covenant Health and Community Services Board Meeting of May 25, 2017.

A motion was made and passed.

FINANCIAL REPORTS

Covenant Care June 2017 Consolidated Financial Report

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COVENANT HEALTH AND COMMUNITY SERVICES, INC. BOARD OF DIRECTORS July 27, 2017 cont.

Mr. Berg reported the following financial highlights: Covenant Health and Community Services: operating margin for the month was| ($64,097); YTD operating loss was ($472,257) Covenant Hospice: operating margin for the month was $89,490; YTD operating margin was $304,493 Peoples Home Health: operating margin for the month was $151,036; YTD operating margin was $1,173,920 Covenant Hospice Foundation: net income of ($433); YTD net income was $355,109.

After discussion, Mr. Owens called for a motion to approve the Covenant Care June 2017 and YTD Financial Report.

A motion was made and passed.

FOCUSED DISCUSSION

West Florida Care Center

Mr. Mislevy gave an overview of recent discussions with West Florida Hospital (WFH) administration regarding the potential relocation of Covenant's inpatient hospice unit. Relocating the unit to the first floor would improve the status of patient rooms and clinical spaces as well as provide an opportunity for better brand visibility. Ongoing dialogue with WFH administration included lease space and terms, and build-out requirements. Mr. Owens emphasized the positive impact of the strategically-aligned growth initiative for both entities. Mr. Mislevy explained that more information would be provided as negotiations progressed.

Ratification of Covenant At Home, Inc. Management Board

Mr. Berg explained that the bylaws of Covenant At Home, Inc. had been approved by its original directors in 2016. Likewise, Covenant At Home board members approved and elected the following 2017 Slate of Officers at its annual meeting:

COVENANT AT HOME, INC. OFFICERS: Odin Berg, Chair James Smith, MD, Vice Chair Jeff Mislevy, Treasurer Todd Fisher, Secretary

At the advice of legal counsel, the above-stated 2017 Slate of Officers for Covenant At Home, Inc.'s Management Board required ratification by Covenant Health and Community Services, Inc.'s Board of Directors.

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COVENANT HEALTH AND COMMUNITY SERVICES, INC. BOARD OF DIRECTORS July 27, 2017 cont.

After discussion, Mr. Owens called for the ratification of the 2017 Management Board for Covenant At Home, Inc. The motion was made and passed. Quality, Risk, Safety and Compliance Committee Report Mr. Owens gave an update on the committee's recent activities. The committee met regularly to monitor the implementation and outcomes of the Plan of Correction for Alabama and Florida service areas. Mr. Owens noted that the ongoing remediation and resource commitment had a financial impact as well. Ms. Benedict provided a detailed report on the progress made as a result of the Plan of Correction efforts. Also, a summary of the Navigant Report findings was presented for review and discussion. Ms. Benedict explained that the Quality Assurance/Process Improvement Committee continued to review and audit quality outcomes.

Memory Care Update Mr. Fisher provided an update on the new memory care assisted living facility, The Residence. Renovation of the building was underway and completion of construction was expected by late October. Opening of The Residence was scheduled for January 1, 2018. The total capital budget for the project was $2,430,150. This new 22-bed facility would provide housing for residents and a portfolio of services for Alzheimer's and dementia patients and their caregivers. Mr. West presented various donor opportunities that were available to support The Residence and other community-based memory care programs and services. ADJOURNMENT There being no further business to discuss, the meeting was adjourned at 9:40 a.m.

__ Submitted By: Carey King, Secretary

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August 2017 Consolidated Financial Statements: CEO/CFO REPORT

August 2017 marked the 9th consecutive month of positive operating and overall financial performance

1. Covenant Care, consolidated results: August: Operating margin of $45,077; net income of $51,234 YTD: Operating margin of $696,633; net income of $1,348,282.

2. Covenant Hospice results: Covenant Hospice realized an August Operating Income of $11,340 (+0.2%); net non-operating revenue of ($5,218) produced a Net Income of $6,122 (0.1%). YTD Operating Margin is $582,378 (+1.6%) and YTD Net Income is $957,841 (+2.6%).

3. Peoples Home Health results: Peoples Home Health, achieved an August Operating Income of $173,544 (+15.5%). YTD Operating Margin is $1,499,715 (+17.0%). (Peoples non-operating revenues or expenses are immaterial.)

4. Covenant Health & Community Services (d/b/a "Covenant Care"): Covenant Health & Community Services had an August operating loss of ($45,955) and a YTD operating loss of ($590,408). CHCS YTD expenses include $221,363 in compensation costs, and $364,993 in legal and consulting expenses.

5. Covenant Hospice Foundation: Covenant Hospice Foundation realized an August Net Loss of ($14,013). YTD Net Income is $56,472.

6. Construction-in-progress ("CIP"): As of 08/31/17, CIP for the two outstanding construction projects is $2,776,668: o Sacred Heart Hospital, hospice inpatient center: $1,634,015 (opened September 5, 2017) o Covenant Alzheimer's Services, The Residence memory care center: $1,142,653

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August 2017 Consolidated Financial Statements STATISTICAL HIGHLIGHTS

SUMMARY OF AUGUST STATISTICS: Covenant Hospice key statistics:

--Average Daily Census: 770 (August); 778 (YTD) --Average Length of Stay: 59.8 (August); 54.7 (YTD) --Total admissions: 399 (August); 3,454 (YTD) [Average per month ? 432] --Inpatient admissions: 207 (August); 1,697 (YTD) [Average per month ? 212] --Deaths: 346 (August); 2,978 (YTD) [Average per month ? 372]

Peoples Home Health key statistics: --Medicare & Medicare-like episodes: 413 (August); 3,389 (YTD) [Average per month ? 424] --Home health visits: 7,708 (August); 57,062 (YTD) [Average per month ? 7,133] --Average Medicare episode payment: $2,370 (YTD actual); $2,347 (2017 budget) --YTD 30-day readmissions: 16%

Total Covenant Care activity: Admissions, August: 399 end-of-life admissions; 413 homebound admissions; 812 total admissions. Admissions, YTD: 3,454 end-of-life admissions; 3,280 homebound admissions; 6,734 total admissions Average daily census, August: 770, hospice ADC; 804, home health ADC; 1,574, total ADC Average daily census, YTD: 778, hospice ADC; 781, home health ADC; 1,559, total ADC

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Covenant Care Month of August 2017 - Financial Results

COVENANT CARE COMBINED STATEMENT OF OPERATIONS AUGUST 31, 2017

COMBINED

BUDGET ANALYSIS BUDGET VARIANCE % VARIANCE

NET PATIENT/FAMILY CARE/PROGRAM REVENUE

5,724,546

6,490,546

(766,000)

-11.8%

TOTAL PATIENT/FAMILY CARE EXPENSES

4,020,511

4,464,918

(444,407)

-10.0%

CONTRIBUTIONS FROM OPERATIONS CONTRIBUTION %

1,704,035 29.8%

2,025,628 31.2%

(321,593) -1.4%

-15.9%

GENERAL & ADMINISTRATIVE EXPENSES Other Direct Payroll Benefits Allocation from CHCS

734,117 796,836 128,006

-

954,372 918,582 162,706

-

(220,255) (121,747)

(34,700) -

-23.1% -13.3% -21.3%

0.0%

TOTAL G&A EXPENSES

1,658,958

2,035,660

(376,702)

-18.5%

OPERATING MARGIN OPERATING MARGIN %

45,077 0.8%

(10,032) -0.2%

55,109 0.9%

-549.3%

NON-OPERATING REVENUES Contributions and fundraising Other Non-Operating Revenues Development/Fundraising Expense Other Non-Operating Expense Contributions to Affiliates

46,225 53,051 (52,604) (40,515)

-

63,571 27,341 (77,434) (35,809)

-

(17,346) 25,711 24,829 (4,707)

-

-27.3% 94.0% -32.1% 13.1%

0.0%

NET NON-OPERATING REVENUE

6,157

(22,331)

28,488

-127.6%

EXCESS OF REVENUE OVER EXPENSES

51,234

(32,363)

83,597

-258.3%

AUGUST 2016

5,587,610

4,332,481

1,255,129 22.5%

866,614 658,265 108,962

-

1,633,841

(378,712) -6.8%

48,674 (4,321) (51,176) (33,255)

-

(40,078)

(418,790)

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