EXECUTIVE COMMITTEE MEETING - Covenant Care

[Pages:25]COVENANT HEALTH AND COMMUNITY SERVICES, INC. COVENANT HOSPICE, INC.

COVENANT HOSPICE FOUNDATION, INC.

EXECUTIVE COMMITTEE MEETING

Friday, August 25, 2017 at 8:30 a.m.

Conference Call: 1.719.457.6209; passcode 170672#

AGENDA

CONVENING OF MEETING

TOM OWENS

MINUTES OF THE EXECUTIVE COMMITTEE MEETINGS OF APRIL 20, 2017 AND JUNE 15, 2017

(pp. 2-5) ***** TOM OWENS

CONSOLIDATED JULY 2107 AND YTD FINANCIAL REPORT

(pp.6-19) ***** ODIN BERG

FOCUSED DISCUSSION

UPDATES: WFCC, PRIVATE DUTY, AND MEMORY CARE

(pp.20-21)

TODD FISHER

QRSC REPORT

(p.22)

KARA BENEDICT

LAST WISH PROGRAM

(pp.23-24)

AARON WEST

BHC IPU UPDATE

(p.25)

JEFF MISLEVY

ANNOUNCEMENT OF NEW COO

JEFF MISLEVY

OTHER BUSINESS AS SUBMITTED

TOM OWENS

ADJOURNMENT

TOM OWENS

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

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COVENANT HEALTH AND COMMUNITY SERVICES, INC. COVENANT HOSPICE, INC.

COVENANT HOSPICE FOUNDATION, INC.

EXECUTIVE COMMITTEE MEETING MINUTES

April 20, 2017

MEMBERS PRESENT:

Tom Owens Carey King Jeff Mislevy Rodney Guttmann Susan Davis

MEMBERS ABSENT:

Bill Greenhut Susan Davis Xan Smith

EXECUTIVE LEADERSHIP PRESENT:

Amy Bajjaly Odin Berg Todd Fisher

Mr. Owens convened the meeting at 8:30 a.m. and thanked everyone for attending.

MINUTES

The minutes of the Executive Committee Meeting of February 23, 2017 were presented for approval. A copy of the minutes was provided in Tab B of the handouts.

A motion was made and passed.

CONSOLIDATED MARCH 2017 AND YTD FINANCIAL REPORT

Mr. Berg presented the Consolidated March 2017 and YTD Financial Report. A copy of the report was provided in Tab C of the handouts. The following highlights were discussed.

Covenant Care, consolidated results: o March Operating Margin of $137,588 o Net Income of $347,579 o YTD Operating Margin $237,605 o YTD Net Income $441,834

Covenant Hospice realized a positive operating margin of $55,795; net non-operating revenue of $174,936 produced a Net Income ("Excess of Revenues over Expenses") of $230,731.

Total admissions: 467 end-of-life admissions; 450 homebound admissions; 917 total admissions. (February total - 828)

Covenant Hospice key statistics: o Average Daily Census: 778.5 o Average Length of Stay: 51.7 o Admissions: 467

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Executive Committee Meeting April 20, 2017 cont.

Peoples Home Health achieved a positive operating margin of $244,527. YTD operating margin of $627,137.

Peoples Home Health key statistics: o Medicare & Medicare-like episodes: 557 o Home health visits: 7,634 o Average Medicare episode payment: $2,490 o 30-day readmissions: 17%

Covenant Health & Community Services had an operating loss of ($251,675). CHCS expenses include $96,994 in unallocated compensation costs related to the growth and diversification activities pursued by Covenant, and legal and consulting expenses of $153,660.

Revenues and expenses continued to be reviewed to ensure costs were appropriate for current census levels, proactively addressing a possible period during which future volumes remained flat.

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

A motion was made and passed.

President's Report

Mr. Mislevy gave an update on the recent validation survey conducted by the Centers for Medicare and Medicaid (CMS) of which spanned the Alabama service areas. It was expected that standard and condition-level deficiencies would be cited. Consequently, CMS will conduct a second survey to ensure Covenant had executed remedial actions accordingly. Ongoing updates will be provided to the Board of Directors as available.

Renovation of the Residence, as well as the construction of the inpatient unit at Sacred Heart, remained on schedule. It was expected that the first patient will be admitted to the Sacred Heart inpatient unit in early September.

Mr. Fisher presented a position document on "Population Health and Covenant-Baptist Faith Health Network." A copy of the document was distributed to the members. Mr. Fisher gave an overview of the following: o Population health strategy and initiatives o CHN ? The Memphis Model o Faith Health Network Operating Principles and Guidelines o Partnership financial value proposition o 5-year proforma and assumptions Mr. Fisher explained that Covenant Care and Baptist Health Care continued to collaborate to formalize the population health program.

ADJOURNMENT

There being no further business, the meeting was adjourned 9:36 a.m.

____________________________________ Submitted By: Carey King, Secretary

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COVENANT HEALTH AND COMMUNITY SERVICES, INC. COVENANT HOSPICE, INC.

COVENANT HOSPICE FOUNDATION, INC.

EXECUTIVE COMMITTEE MEETING MINUTES

June 15, 2017

MEMBERS PRESENT:

Tom Owens Carey King Jeff Mislevy Rodney Guttmann Xan Smith

MEMBERS ABSENT:

Bill Greenhut Susan Davis

EXECUTIVE LEADERSHIP PRESENT:

Aaron West Odin Berg Rhonda Jordan

Mr. Owens convened the meeting at 8:32 a.m. and thanked everyone for attending.

CONSOLIDATED MAY 2017 AND YTD FINANCIAL REPORT

Mr. Berg presented the Consolidated May 2017 and YTD Financial Report. A copy of the report was provided in the handouts. The following highlights were discussed.

Covenant Care, consolidated results: o May Operating Margin of $77,764 o Net Income of $39,642 o YTD Operating Margin $324,467 o YTD Net Income $693,173

Covenant Hospice realized a positive operating margin of $40,720; net non-operating revenue of ($2,581) produced a Net Income ("Excess of Revenues over Expenses") of $38,338.

Peoples Home Health achieved a positive operating margin of $231,568. YTD operating margin of $1,022,884.

Covenant Health & Community Services had an operating loss of ($35,233). CHCS expenses include $175,284 in unallocated compensation costs related to the growth and diversification activities pursued by Covenant, and legal and consulting expenses of $231,269.

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

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Executive Committee Meeting June 15, 2017 cont. A motion was made and passed.

SURVEY UPDATE: CMS AND THE JOINT COMMISSION Mr. Mislevy gave an update on recent activities:

The CMS re-survey visit for Alabama service areas was conducted; all condition-level citations were removed.

The CMS validation survey for Florida service areas was expected to occur post-The Joint Commission survey.

The Plan of Correction developed and implemented in the Alabama service areas was implemented in the Florida service areas as well.

Additional operational expenses were incurred due to the development and organizationwide implementation of the Plan of Correction.

WEST FLORIDA CARE CENTER Mr. Mislevy explained that the current lease agreement for the West Florida Care Center expired in October 2017. At the request of West Florida Hospital administration, Covenant was asked to consider relocating its inpatient unit to an unoccupied space on the 1st floor of the hospital. The new location would provide an updated care setting, easier patient and family access, better internal and external visibility, and external signage opportunities. Discussions with architectural firm Caldwell and Associates produced a preliminary design for a 13-bed unit with an estimated capital expenditure of $1.55mm. Mr. Owens recommended legal counsel's assistance with the development and execution of a Letter of Intent between Covenant Care and West Florida Hospital.

After discussion, Mr. Owens asked for a consensus to move forward with executing a Letter of Intent for the relocation of the West Florida Care Center. The members approved.

ADJOURNMENT There being no further business, the meeting was adjourned 9:25 a.m.

____________________________________ Submitted By: Carey King, Secretary

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Board of Directors ?

Executive Committee August 25, 2017

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July 2017 Consolidated Financial Statements: CEO & CFO REPORTS

1. July 2017 marked the 8th consecutive month of positive operating and overall financial performance 2. Covenant Hospice results:

Covenant Hospice realized a July Operating Income of $116,605 (+2.6%); net non-operating revenue of $84,736 produced a Net Income of $201,341. YTD Operating Margin is $571,038 (+1.8%) and YTD Net Income is $951,719. 3. Peoples Home Health results: Peoples Home Health, achieved a July Operating Income of $152,513 (+14.7%). YTD Operating Margin is $1,326,401 (+17.2%). (Peoples non-operating revenues or expenses are immaterial.)

4. Covenant Health & Community Services (d/b/a "Covenant Care"): Covenant Health & Community Services had a July operating loss of ($72,197) and a YTD operating loss of ($544,454). CHCS YTD expenses include $201,428 in compensation costs, and $339,353 in legal and consulting expenses.

5. Covenant Hospice Foundation: Covenant Hospice Foundation achieved July Net Income of $42,499. YTD Net Income is $70,485.

6. Construction-in-progress: As of 07/31/17, CIP for the two outstanding construction projects is $2,230,929: o Sacred Heart Hospital, hospice inpatient center: $1,300,977 (scheduled to open September 5, 2017) o Covenant Alzheimer's Services, The Residence memory care center: $929,952

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July 2017 Consolidated Financial Statements STATISTICAL HIGHLIGHTS

SUMMARY OF JULY STATISTICS: Covenant Hospice key statistics:

--Average Daily Census: 774.5 (July) vs. 778.7 (YTD) --Average Length of Stay: 56.9 (July) vs. 54.0 (YTD) --Total admissions: 422 (July) vs 3,055 (YTD) (Average per month ? 439) --Inpatient admissions: 197 (July) vs.1,490 (YTD) (Average per month ? 214) --Deaths: 344 (July) vs. 2,632 (YTD) (Average per month ? 376)

Peoples Home Health key statistics: --Medicare & Medicare-like episodes: 384 (July) vs. 2,533 (YTD) --Home health visits: 6,624 (July) vs. 42,728 (YTD) --Average Medicare episode payment: $2,395 vs. $2,347 (2017 budget) --YTD 30-day readmissions: 16%

Total Covenant Care activity: Admissions, July: 424 end-of-life admissions; 443 homebound admissions; 867 total admissions. Admissions, YTD: 3,055 end-of-life admissions; 2,976 homebound admissions; 6,029 total admissions Average daily census, July: 775, hospice ADC; 749, home health ADC; 1,524, total ADC Average daily census, YTD: 779, hospice ADC; 778, home health ADC; 1,557, total ADC

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