PROVIDENCE – Care New England Health System started fiscal year 2025 strong, posting a $3.4 million operating gain through the first quarter ending Dec. 31, 2024, according to unaudited financial statements released Feb. 14.
The earnings mark is an improvement over the same period last year, when the health system reported a $566,145 operating gain.
The operating gain blunted an overall loss for the quarter of $5.6 million, compared to the previous year’s profit of $24.8 million.
Todd Conklin, chief financial officer for Care New England, said the overall loss was mainly because of softer investment returns.
“Care New England's operating income remained positive and stable during the first quarter of fiscal year 2025 [three months ended Dec. 31, 2024].” Conklin said in a statement. “...Care New England's investment performance was consistent with softer national investment returns during this period.”
The state’s second-largest health system reported $366.8 million in total revenue for the quarter, up from the $343.5 million reported in the same period last year.
Net patient service revenue for the quarter was $310.4 million, a 5.3% increase over $294.9 million reported in first quarter of 2024. Other revenue also rose from $39.2 million last year to $47.4 million in the most recent period, a 16.2% increase.
Total operating expenses also rose 6% over the same period last year. In the first quarter 2024 Care New England reported $342.9 million in total operating expenses compared with $363.4 million posted in the most recent quarter. Contributing to this was a rise in expenses on salaries and fringe benefits, which rose from $193.3 million in the first quarter of 2024 to $208.6 million in the most recent quarter. Also, other expenses increased from $103.3 million in 2024 to $115.5 million in the first quarter of 2025. Spending on medical supplies and drugs also rose by 22%, increasing from $34.4 million in the first quarter 2024 to $44.2 million in the most recent quarter.
Care New England posted a nonoperating loss of $9 million in the first quarter, compared to a $24.3 million gain in the same period last year. The health system saw its unrestricted gifts and contributions disappear to nothing in the most recent quarter, compared with the $189,170 in the same period last year. Also, the change in net unrealized gains fell $34.1 million, going from a $18.3 million in the first quarter 2024 to a $15.8 million loss in the first quarter 2025.
The health system’s assets were about $1.04 billion for the quarter, up from about $1.02 billion the same period last year. Total liabilities fell from $723.9 million in the first quarter 2024 to $707 million in the most recent quarter. Also, net assets rose to $337.9 million in the first quarter 2025, up from $302.3 million in the same period last year.
Care New England’s total receivables fell $20.3 million, from $194.9 million last year to $174.6 million in the first quarter 2025. An $22.4 million increase in patient accounts receivable – going from $115.6 million in the first quarter 2024 to $138 million in the first quarter 2025 – and a $42.7 million decrease in other receivables – falling from $79.3 million in 2024 to $36.6 million in the most recent period – contributed to this. The decline in other receivables is mainly because of timing of receipts from the state of Rhode Island Medicaid License Fee Program.
Prepaid expenses, both current and long-term, rose $2.3 million from $13.4 million in the first quarter 2024 to $15.7 million in the most recent period.
Cash and cash equivalents fell from $28.7 million in the first quarter 2024 to $17.1 million in the first quarter 2025. Also, short term investments rose from $15.1 million last year to $22.4 million in the most recent quarter.
Care New England’s management attributed its improved financial performance to actions that were implemented in 2023 and continue today. Specifically, these include reducing denials, prior authorizations and improvements to charge capture that have boosted revenue growth. Also, improving the supply chain with an agreement with Captis Group Purchasing Organization and Aggregation Group as well as reducing the corporate overhead structure.
“Management is acutely aware of the value and impact of these initiatives and continues to monitor their effectiveness with operational teams during monthly business review meetings,” the health system said in the financial report.
(SUBS 3rd paragraph to clarify loss; minor edits.)
Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.
