Community Health Organization

Company Overview

Community Health Organization - one of the nation’s largest federally-qualified health care organizations providing primary care, specialty services and social services to more than 215,000 patients in the Midwest. The Company is a not-for-profit enterprise providing a “health care home” for the medically underserved, low income and uninsured patients.

Engagement Overview
•  The Company started to experience operating losses and tight liquidity due to the following:
–  Unexpected costs associated with outsourcing the revenue cycle.
–  As a result of the economic malaise, patient encounters and managed care lives decreased 4% and 2%, respectively.
–  Costs incurred from implementing a state-of-the-art software system designed to integrate accounting, patient billing and electronic medical records
–Collectability of account receivable.

•  As a result of the Company’s financial performance, the Company’s senior lender restricted management from borrowing under its line of credit facility.

•  Fort Dearborn (FDP) was retained to review the Company’s financial forecast  and assist management in accessing its existing line of credit facility with the goal of refinancing with a new senior lender.  As part of the process, FDP performed the following:
–  Performed a deep dive understanding over the company’s operations, information system  conversion, changes in reimbursement rates and other regulatory matters. 
–  Based on our thorough understanding of the Company, Fort Dearborn developed a financial  forecast that incorporated expected changes to the business as well as management’s and  Fort Dearborn’s profit improvement initiatives.
–  Analyzed accounts receivable and estimated uncollectible balances and its impact on  profitability, EBITDA and debt service.

Results
•  Based on Fort Dearborn’s assessment over the Company’s financial position and trusted relationship with the Company’s lender, the Company obtained limited availability under its existing line of credit prior to their refinancing.

•  The Company successfully refinanced its senior debt with a new financial institution.