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U of L Health CEO Says Faster Billing, Savings Contributed To Lower Request For State Funding

U of L Health CEO Tom Miller addresses the Rotary Club of Louisville in January 2020
U of L Health CEO Tom Miller addresses the Rotary Club of Louisville in January 2020

Kentucky lawmakers are moving closer to approving funding for the University of Louisville’s purchase of the Jewish Hospital system. In an address to the Rotary Club of Louisville Thursday, U of L Health CEO Tom Miller shed light on why the health system is asking for less money from the state.

Lower operational costs, higher reimbursements and the ability to bill faster than anticipated contributed to U of L needing less state funding, Miller said. He said Kentucky officials asked his team to be “respectful” of the fact that they’ll use state funds.

The university originally asked for a $50 million loan from the state last summer, but recently dropped its ask to $35 million. U of L purchased the struggling Jewish Hospital as well as other Louisville assets of Kentucky One Health in November.

The House Appropriations and Revenue Committee passed a bill that would use emergency funds to give U of L the loan earlier this week. If approved by the full legislature, the state will loan U of L $35 million, which will be due back in 20 years. Half of that amount is forgivable if the hospitals meet certain conditions related to hiring and caring for under-served populations.

"As we try to establish a plan to be successful, to turn around, again, our goal is to operate University and Jewish Hospital as one hospital," Miller said.

He said Jewish Hospital had about $100 million in payroll, a figure U of L Health could not accommodate without support from state and foundations, the latter of which put in $50 million.

Because of the purchase, the combined hospitals had to re-credential doctors and sites, reapply for licenses, gain approval from insurance providers and more. And while the system waited for federal approval for a change of ownership, it couldn’t bill patients.

"That was going to be about $150 million in costs...Our staff wanted to get paid. Our suppliers wanted to get paid during this process, but we couldn't bill," Miller said. "And so that's why we needed the help because we just didn't have the type of resources associated with it."

But Miller said some approvals came in faster than anticipated, meaning the hospitals will be billing sooner. He said the remaining $120 million in bills will be sent by the end of January.

Looking ahead, Miller said U of L plans to pursue a turnaround strategy that includes enhancing what Sts. Mary & Elizabeth Hospital and Jewish Hospital Shelbyville offer so that patients don't have to pass first through the downtown hospitals via a hub and spoke model. That includes building more outpatient care into the model, he said.

Amina Elahi is LPM's City Editor. Email Amina at aelahi@lpm.org.

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