Table of Contents
Page
Report of Independent Auditors 1
Consolidated Financial Statements
Consolidated Balance Sheets 4
Consolidated Statements of Operations and Change in Net Deficit 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 8
Supplementary Information
Consolidating Balance Sheet 28
Consolidating Statement of Operations 30
1
Report of Independent Auditors
The Board of Trustees
Astria Health and Subsidiaries
Report on the Audit of the Financial Statements
Disclaimer of Opinion
We were engaged to audit the consolidated financial statements of Astria Health and Subsidiaries
(the Organization), which comprise the consolidated balance sheets as of December 31, 2022 and
2021, and the related consolidated statements of operations and change in net deficit and cash flows
for the years then ended, and the related notes to the consolidated financial statements.
We do not express an opinion on the accompanying consolidated financial statements of the
Organization. Because of the significance of the matters described in the Basis for Disclaimer of
Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to
provide a basis for an audit opinion on these consolidated financial statements.
Basis for Disclaimer of Opinion
Management informed us that the Organization had not been audited since 2017. Management was
unable to obtain support to complete necessary reconciliations between 2018 and 2020 for certain
accounts. In addition, during that same period, the Organization had entered and emerged from
bankruptcy and the Organization had also experienced challenges associated with implementing a
new revenue system.
As of the date of our audit report, with respect to accounts on December 31, 2022, management was
still in the process of reconciling property and equipment, net; and deferred other grant income
(recorded in other accrued liabilities).
As a result of these matters, we were unable to determine whether any adjustments might have been
found necessary with respect to recorded or unrecorded net deficit without donor restrictions;
property and equipment, net; and other accrued liabilities; and the elements included in the
consolidated statements of operations and change in net deficit and cash flows for the year ended
December 31, 2022.
As of the date of our audit report, with respect to accounts on December 31, 2021, management was
still in the process of reconciling some accounts including property and equipment, net; accrued paid
time off (recorded in accrued compensation and benefits); and deferred other grant income (recorded
in other accrued liabilities).
In addition, we were not engaged as the Organization’s auditor until after December 31, 2020, and,
therefore, did not observe the counting of physical inventories at the beginning of the year. We were
unable to satisfy ourselves by other auditing procedures concerning the activity related to changes in
inventory for the year ended December 31, 2021.
As a result of these matters, we were unable to determine whether any adjustments might have been
found necessary with respect to recorded or unrecorded net deficit without donor restrictions;
property and equipment, net; accrued compensation and benefits; other accrued liabilities; and the
elements making up the statements of operations and change in net deficit and cash flows for the
year ended December 31, 2021.
2
Emphasis of Matter - Change in Accounting Principle
As discussed in Note 2 to the consolidated financial statements, in 2022, the Organization adopted
new accounting guidance Accounting Standards Codification Topic 842, Leases. Our opinion is not
modified with respect to this matter.
Substantial Doubt about the Organization’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the
Organization will continue as a going concern. As discussed in Note 3 to the consolidated financial
statements, the Organization had 10 days of cash on hand and a net deficit of $30,766,757 as of
December 31, 2022. The Organization has stated that substantial doubt exists about the
Organization’s ability to continue as a going concern. Management’s evaluation of the events and
conditions and management’s plans regarding these matters are also described in Note 3. The
consolidated financial statements do not include any adjustments that might result from the outcome
of this uncertainty. Our audit opinion is not modified with respect to that matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in the United States of
America, and for the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there
are conditions or events, considered in the aggregate, that raise substantial doubt about the
Organization’s ability to continue as a going concern within one year after the date that the financial
statements are available to be issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our responsibility is to conduct an audit of the Organization’s consolidated financial statements in
accordance with auditing standards generally accepted in the United States of America and to issue
an auditor’s report. However, because of the matters described in the Basis for Disclaimer of Opinion
section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a
basis for an audit opinion on these consolidated financial statements.
We are required to be independent of the Organization and to meet our other ethical responsibilities,
in accordance with the relevant ethical requirements relating to our audit.
Supplementary Information
We were engaged for the purpose of forming an opinion on the financial statements as a whole. The
consolidating balance sheet – December 31, 2022, consolidating balance sheet – December 31,
2021, consolidating statement of operations – year ended December 31, 2022, and consolidating
statement of operations – year ended December 31, 2021, are presented for the purposes of
additional analysis and are not a required part of the financial statements. Because of the significance
of the matter described above in the Basis for Disclaimer of Opinion section, it is inappropriate to and
we do not express an opinion on the supplementary information referred to above.
Seattle, Washington
April 30, 2023
Consolidated Financial Statements
Astria Health and Subsidiaries
See accompanying notes.
4
Consolidated Balance Sheets
December 31, 2022 and 2021
2022 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents 4,499,315$ 4,612,077$
Patient accounts receivable 28,141,842 24,148,323
Other receivables 26,003 -
Inventory 5,559,088 5,339,991
Prepaid expenses and other assets 1,706,069 1,571,810
Total current assets 39,932,317 35,672,201
PROPERTY AND EQUIPMENT, net 25,995,950 27,695,625
OPERATING LEASE RIGHT-OF-USE ASSETS, net 6,777,185 -
FINANCE LEASE RIGHT-OF-USE ASSETS, net 314,434 -
OTHER ASSETS 858,022 1,252,851
Total assets 73,877,908$ 64,620,677$
LIABILITIES AND NET DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses 12,454,864$ 14,452,207$
Accrued compensation and benefits 5,968,581 5,978,505
Estimated third-party payor settlements 1,376,815 1,407,995
Other accrued liabilities 2,228,888 1,068,298
Current portion of long-term debt 10,998 1,024,756
Current portion of operating lease liabilities 1,110,709 -
Current portion of finance lease liabilities 50,573 -
Total current liabilities 23,201,428 23,931,761
LONG-TERM DEBT, net of current portion 75,147,867 77,007,294
OPERATING LEASE LIABILITIES, less current portion 5,628,798 -
FINANCE LEASE LIABILITIES, less current portion 266,572 -
OTHER LONG-TERM LIABILITIES 400,000 235,114
Total liabilities 104,644,665 101,174,169
NET DEFICIT
Without donor restrictions (30,766,757) (36,553,492)
Total net deficit (30,766,757) (36,553,492)
Total liabilities and net deficit 73,877,908$ 64,620,677$
Astria Health and Subsidiaries
See accompanying notes.
5
Consolidated Statements of Operations and Change in Net Deficit
Years Ended December 31, 2022 and 2021
2022 2021
REVENUES, GAINS, AND OTHER SUPPORT
Net patient service revenue 160,268,604$ 128,828,544$
Other operating revenue 12,225,566 2,751,890
Grant income 1,626,376 11,051,099
Contributions in-kind - 347,070
Total revenues, gains, and other support 174,120,546 142,978,603
OPERATING EXPENSES
Salaries and wages 60,753,059 53,855,513
Employee benefits 13,226,561 9,491,838
Professional fees 19,390,100 15,692,362
Supplies 19,934,690 19,260,763
Purchased services 28,060,229 26,021,621
Depreciation and amortization 3,320,345 3,495,065
Interest expenses 7,179,293 7,221,966
Facility expenses 4,089,843 3,613,996
Insurance 3,213,426 2,937,625
Other expenses 8,070,698 5,074,438
Total operating expenses 167,238,244 146,665,187
OPERATING INCOME 6,882,302 (3,686,584)
OTHER INCOME (LOSS)
(Loss) gain on bankruptcy settlements, net (730,373) 1,161,662
Other loss, net (59,807) (85,920)
Total other income (loss), net (790,180) 1,075,742
EXCESS OF REVENUES OVER EXPENSES
FROM CONTINUING OPERATIONS 6,092,122 (2,610,842)
DISCONTINUED OPERATIONS
Loss on discontinued operations (see Note 14) (305,387) (2,642,072)
Change in net deficit 5,786,735 (5,252,914)
NET DEFICIT WITHOUT DONOR RESTRICTIONS,
beginning of year (36,553,492) (31,300,578)
NET DEFICIT WITHOUT DONOR RESTRICTIONS,
end of year (30,766,757)$ (36,553,492)$
Astria Health and Subsidiaries
See accompanying notes.
6
Consolidated Statements of Cash Flows
Years Ended December 31, 2022 and 2021
2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Change in net deficit 5,786,735$ (5,252,914)$
Adjustments to reconcile change in net assets to net cash
used in operating activities
Depreciation and amortization of property and equipment 3,320,345 3,495,065
Non-cash lease expense 1,399,167 -
Gain on forgiveness of PPP Loans (2,743,300) -
Loss on disposal of property and equipment 93,339 685,524
Loss on discontinued operations (see Note 14) 305,387 2,642,072
Changes in operating assets and liabilities
Patient accounts receivable (3,993,519) (508,321)
Other receivables (161,317) 153,357
Inventory (219,097) (1,619,308)
Prepaid expenses and other assets 260,570 (218,208)
Due from (to) intercompany
for discontinued operations (see Note 13) 1,247,681 (243,665)
Accounts payable and accrued expenses (1,955,855) (983,301)
Accrued compensation and benefits (9,924) (2,405,040)
Estimated third-party payor settlements (31,180) (1,776,505)
Other accrued liabilities 950,867 (32,911,134)
Operating lease liabilities (1,385,314) -
Net cash provided by (used in) operating activities 2,864,585 (38,942,378)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment - 314,176
Purchase and construction of property and equipment (2,798,642) (1,845,210)
Net cash used in investing activities (2,798,642) (1,531,034)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 160,000 76,215,000
Repayment of long-term debt (289,885) (58,239,529)
Repayment on finance lease liabilities (48,820) -
Net cash (used in) provided by financing activities (178,705) 17,975,471
NET CHANGE IN CASH AND CASH EQUIVALENTS (112,762) (22,497,941)
CASH AND CASH EQUIVALENTS, beginning of year 4,612,077 27,110,018
CASH AND CASH EQUIVALENTS, end of year 4,499,315$ 4,612,077$
Astria Health and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2022 and 2021
See accompanying notes.
7
2022 2021
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the year for interest 7,218,833$ 7,887,963$
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES
Noncash impact of the implementation of ASC 842
Operating lease right-of-use assets obtained
in exchange for operating lease liabilities 8,009,319$ -$
Finance lease right-of-use assets obtained
in exchange for new finance lease liabilities 365,875$ -$
Astria Health and Subsidiaries
8
Notes to Consolidated Financial Statements
Note 1 – Organization and Principles of Consolidation
Astria Health (the Organization) is a nonprofit corporation operating hospitals, health clinics, home health
services, and other healthcare services in Yakima, Toppenish, and Sunnyside, Washington, and the
surrounding areas. The Organization is exempt under Section 501(c)(3) of the Internal Revenue Code
from federal income taxes except for unrelated business income.
Astria Sunnyside Hospital consists of the following entities:
Astria Sunnyside Hospital (Sunnyside) is a critical access hospital with 25 set-up beds. Services
offered at the hospital include medical, surgical, labor/delivery and nursery care, 24-hour emergency,
laboratory, imaging services, physical therapy, cardiac rehabilitation, urgent care, oncology,
cardiology, and clinics. Members of the medical staff include specialists in emergency medicine, family
practice, internal medicine, general surgery, pediatrics, obstetrics/gynecology, orthopedics,
otolaryngology, radiology, and inpatient hospitalization. Astria Health is the sole member of Sunnyside.
A wholly owned subsidiary of Sunnyside, Sunnyside Professional Services, LLC (SPS), a for-profit
limited liability corporation, has an investment in a corporation that owns two medical office buildings.
It manages these buildings for Sunnyside.
Sunnyside Hospital Foundation (the Foundation) is a nonprofit organization that provides contributions
to Sunnyside. The Foundation is exempt under Section 501(c)(3) of the Internal Revenue Code from
federal income taxes except for unrelated business income. The Foundation is an affiliated
organization, and its activity is consolidated with the Organization.
Astria Home Health is a nonprofit organization working toward establishing home health services in
Sunnyside and does not currently provide patient care services. Astria Home Health is exempt under
Section 501(c)(3) of the Internal Revenue Code from federal income taxes except for unrelated
business income. Astria Home Health is a wholly owned subsidiary of Sunnyside.
Astria Home Medical Supply is a for-profit organization providing durable medical equipment and
supplies to the community the Organization serves.
SHC Holdco, LLC, whose sole member is Astria Health, consists of the following entities:
Astria Toppenish Hospital (Toppenish) is a 78-bed facility located in Toppenish, Washington.
Toppenish has an expanded surgery capability, pediatrics area, and a Family Maternity Center.
A wholly owned subsidiary, Yakima Home Care Holdings, LLC (YHCH), a for-profit limited liability
corporation, owns and operates Yakima HMA Home Health, LLC, (YHHH), which provides home
health and hospice services throughout Yakima County, Washington.
Astria Regional Medical Center (ARMC) was closed in January 2020 (see Note 14).
The consolidated financial statements reflect the consolidated operations of Astria Health, Sunnyside,
and SHC Holdco, LLC, collectively referred herein as the “Organization.” All significant intercompany
transactions and balances have been eliminated.
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
9
Note 2 – Significant Accounting Policies
Use of estimates – The preparation of the consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America (GAAP) requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates.
Cash and cash equivalents – Cash and cash equivalents include highly liquid investments with an
original maturity of three months or less, excluding assets limited as to use.
Patient accounts receivables – Patient receivables are uncollateralized patient, customer, and third-
party payor obligations. Payments of patient receivables are allocated to the specific claims identified on
the remittance advice or, if unspecified, are applied to the earliest unpaid claim. The carrying amount of
patient receivables is reduced by implicit and explicit price concessions that reflects management’s
estimate of amounts that will not be collected from patients, residents, and third-party payors.
Management reviews patient receivables by payor class and applies percentages to determine estimated
amounts that will not be collected from third parties under contractual agreements and amounts that will
not be collected from patients due to implicit price concessions. Management considers historical write-off
and recovery information in determining the estimated implicit price concession.
Inventory – Inventory, consisting principally of surgical, medical, and pharmaceutical supplies, are stated
at the lower of cost (first-in, first-out) or market.
Prepaid expenses – Prepaid expenses are expenses paid during the fiscal year relating to expenses to
be incurred in future periods.
Property and equipment – Property and equipment acquisitions equal to or greater than $5,000 and
having more than a one-year useful life are capitalized and recorded at cost. The cost of property and
equipment, and the related accumulated depreciation, are removed from the accounts when sold or
retired, and any resulting gain or loss is recognized. Depreciation is provided over the estimated useful
life of each depreciable asset and is computed using the straight-line method. The estimated useful lives
of property and equipment are as follows:
Buildings and improvements 3 to 40 years
Equipment 1 to 15 years
The Organization assesses potential impairment to its long-lived assets when there is evidence that
events or changes in circumstances have made recovery of the carrying value of the assets unlikely.
Leases – For the year ended December 31, 2021, the Company followed Financial Accounting
Standards Board (FASB) Accounting Standards Codification (ASC) 840, Leases. Under that guidance,
the Company classified leases as either operating or capital. Capital leases resulted in the recognition of
the assets and liabilities, whereas operating leases did not.
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
10
As of January 1, 2022, the Company adopted FASB ASC 842, Leases. The Company implemented this
standard utilizing the modified retrospective transition approach and electing to not adjust comparative
periods. As a result, the consolidated financial statements for the year ended December 31, 2021, were
not changed related to this implementation.
The following lease accounting policies were followed for year ended December 31, 2022:
At lease inception, the Company determines whether an arrangement is or contains a lease. Operating
leases and Finance leases are included in property and equipment, current portion of long-term lease
obligation, and lease obligation, net of current under long-term liabilities in the consolidated balance
sheets. Right-of-use (ROU) assets represent the Company’s right to use leased assets over the term of
the lease. Lease liabilities represent the Company’s contractual obligation to make lease payments
arising from the lease.
For operating leases, ROU assets and lease liabilities are recognized at the commencement date. The
lease liability is measured as the present value of the lease payments over the lease term. The Company
uses the rate implicit in the lease if it is determinable. When the rate implicit in the lease is not
determinable, the Company uses its incremental borrowing rate to determine the present value of the
lease payments. Operating ROU assets are calculated as the present value of the lease payments plus
initial direct costs, plus any repayments less any lease incentives received. Lease terms may include
renewal or extension options to the extent they are reasonably certain to be exercised. Factors
considered in determining whether an option is reasonably certain of exercise include, but are not limited
to, the value of leasehold improvements, the value of renewal rates, and the presence of factors that
would cause a significant economic penalty to the Company if the option were not exercised. Lease
expenses are recognized on a straight-line basis over the lease term. The Company has elected not to
recognize an ROU asset and obligation for leases with an initial term of 12 months or less. The expense
associated with short-term leases is included in rent expense in the consolidated statements of
operations.
For finance leases, upon lease commencement, the lease liability is measured on an amortized cost
basis and increased to reflect interest on the liability and decreased to reflect the lease payment made
during the period. Interest on the lease liability is determined each period during the lease term as the
amount that results in a constant period discount rate on the remaining balance of the liability. The ROU
asset is subsequently measured at cost, less any accumulated amortization and any accumulated
impairment losses. Amortization on the ROU asset is recognized over the period from the
commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease
term. The Company uses the rate implicit in the lease if it is determinable. When the rate implicit in the
lease is not determinable, the Company uses its incremental borrowing rate to determine the present
value of the lease payments.
Self-insurance reserves – The provisions for the reserves in the self-insured health plan and the
workers’ compensation trust include estimates of the ultimate costs for both the reported claims and the
claims incurred but not reported.
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
11
Basis of presentation – The Organization’s consolidated financial statements are presented in
accordance with GAAP, as codified by the Financial Accounting Standards Board (FASB). Net assets,
revenues, gains, and losses are classified based on the existence or absence of donor-imposed
restrictions. Accordingly, net assets and changes therein are classified and reported as follows:
Net (deficit) assets without donor restrictions – Net (deficit) assets available for use in general operations
and not subject to donor restrictions.
Net assets with donor restrictions – Net assets subject to donor-imposed restrictions. Some donor-
imposed restrictions are temporary in nature, such as those that will be met by the passage of time or
other events specified by the donor. Other donor-imposed restrictions are perpetual in nature, where the
donor stipulates that resources be maintained in perpetuity. Donor-imposed restrictions are released
when a restriction expires; that is, when the stipulated time has elapsed, when the stipulated purpose for
which the resource was restricted has been fulfilled, or both. These are reported as reclassifications
between the applicable classes of net assets. There were no net assets with donor restrictions for the
years ended December 31, 2022 and 2021.
Net patient service revenue – Patient care service revenue is reported at the amount that reflects the
consideration to which the Organization expects to be entitled in exchange for providing patient care.
These amounts are due from patients, third-party payors (including health insurers and government
programs), and others and includes variable consideration for retroactive revenue adjustments due to
settlement of audits, reviews, and investigations. Generally, the Organization bills the patients and third-
party payors several days after the services are performed or the patient is discharged from the facility.
Revenue is recognized as performance obligations are satisfied.
Charity care – Patients who meet the Organization’s criteria for charity care are provided care without
charge or at amounts less than established rates. Such amounts determined to qualify as charity care are
not reported as revenue. The costs the Organization incurred to provide charity care were approximately
$1,441,732 and $982,000 for the year ended December 31, 2022 and 2021, respectively. The
Organization has estimated these costs by multiplying its ratio of costs to gross charges to the gross
uncompensated charges associated with providing charity care.
Grant income – Grant income primarily includes revenues generated primarily from U.S. Department of
Health and Human Services’ Provider Relief Fund (PRF) (see Note 4).
Other operating revenue – Other operating revenue primarily includes revenues generated from
cafeteria, rentals, vendor rebates, other ancillary services, and joint venture gains and losses.
Other operating expenses – Other operating expenses primarily include expenses related to taxes,
repairs and maintenance, travel, education, professional dues, subscriptions, recruiting, and licenses.
Performance indicator – Deficiency/excess of revenues over expenses from continuing operations, as
reflected in the accompanying consolidated statement of operations and change in net deficit, is the
performance indicator. Deficiency/excess of revenues over expenses from continuing operations includes
all changes in net deficit except for activity of discontinued operations.
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
12
Hospital safety net assessment – The state of Washington has a safety net assessment program
involving Washington State hospitals to increase funding from other sources and obtain additional federal
funds to support increased payments to providers for Medicaid services. In connection with this program,
the Organization recorded increases in patient service revenue of $1,724,381 and $1,284,932 for 2022
and 2021, respectively and incurred assessments of $1,196,012 and $776,628, respectively, which were
recorded in other operating expenses in the accompanying consolidated statement of operations and
change in net deficit. The Organization has outstanding receivables of $524,646 and $99,935 associated
with this program as of December 31, 2022 and 2021, respectively, which are included with patient
accounts receivable on the consolidated balance sheet.
Federal income tax – The Organization comprises several corporations that are exempt from federal
income tax under Section 501(c)(3) of the IRC (see Note 1), except to the extent of unrelated business
taxable income as defined under IRC Sections 511 through 515, and several limited liability companies.
The Organization has adopted accounting for uncertain tax positions, which is an accounting standard
that prescribes a recognition threshold and measurement process for uncertain tax positions. The
Organization had no uncertain tax positions as of December 31, 2022.
Subsequent events – Subsequent events are events or transactions that occur after the consolidated
balance sheet date but before the consolidated financial statements are issued. The Organization
recognizes in the consolidated financial statements the effects of all subsequent events that provide
additional evidence about conditions that existed at the date of the consolidated balance sheet, including
the estimates inherent in the process of preparing the consolidated financial statements. The
Organization’s consolidated financial statements do not recognize subsequent events that provide
evidence about conditions that did not exist at the date of the consolidated balance sheets but arose after
the consolidated balance sheet date and before the consolidated financial statements are available to be
issued.
The Organization has evaluated subsequent events through April 30, 2023, which is the date the
consolidated financial statements are available to be issued, and concluded that there were no events or
transactions that need to be disclosed.
Note 3 – Going Concern
The Organization, in accordance with FASB ASC Subtopic 205-40, Presentation of Financial
Statements—Going Concern, has identified conditions that raise substantial doubt about the ability of the
Organization to continue as a going concern in the near future. The following is the evaluation of this
condition and management’s plan: The principal conditions that raised substantial doubt about the
Organization’s ability to continue as a going concern is the days cash on hand ratio of 10 days and 12
days, negative operating cash flows, and a net deficit of $30,766,757 and $36,553,492 as of and for the
years ended December 31, 2022 and 2021, respectively. The Organization’s $75,000,000 note payable
matures in December 2025 and the Organization was not in compliance with its financial covenants and
received a waiver (see Note 7) as of and for the years ended December 31, 2022 and 2021. The
Organization is actively working to improve cash flows to provide adequate liquidity for operations and
prevent an event of default on the long-term debt obligations.
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
13
Note 4 – Coronavirus (COVID-19) Impact
The Organization received funds under the PRF, administered by the U.S. Department of Health &
Human Services (HHS), of $221,916 and $3,926,219 in 2022 and 2021, of which the Organization has
recognized grant income of $221,916 and $3,926,219 and deferred revenue, which is included in other
accrued liabilities, of $0and $0, as of and for the years ended December 31, 2022 and 2021, respectively.
The Organization was required to agree to the terms and conditions of payments. Those terms and
conditions include measures to help prevent fraud and misuse. Documentation is required to ensure that
these funds are to be used for expenses or lost revenue attributable to coronavirus. Also, anti-fraud
monitoring and auditing will be done by HHS and the Office of the Inspector General.
The Organization received funds under the Payroll Protection Program (PPP or Program) loans (see Note
7), administered by the Small Business Administration (SBA), The PPP loans may be fully forgiven if (i)
proceeds are used to pay eligible payroll costs or other eligible costs and (ii) full-time employee
headcount and salaries are either maintained during the eight-week period following disbursement or
restored by December 31, 2020. If not maintained or restored, any forgiveness of the PPP loan would be
reduced in accordance with the regulations. All the proceeds of the PPP loans were used by the
Organization to pay eligible payroll costs and the Organization maintained its headcount and otherwise
complied with the terms of the PPP loans.
PPP loan payments were deferred during the Deferral Period. The Deferral Period is the period beginning
on the date of the loans and ending 10 months after the last day of the covered period (Deferral
Expiration Date). Any amounts not forgiven under the Program will be payable in equal installments of
principal plus any interest owed on the payment date from the Deferral Expiration Date through the
Maturity Date. Additionally, any accrued interest that is not forgiven under the Program will be due on the
First Payment Date.
While the Organization believes that it has acted in compliance with the program and did seek
forgiveness of the PPP loans, no assurance can be provided that the Organization will obtain forgiveness
of the PPP loans in whole or in part. As a result, the funding provided under the PPP program was
recorded as a liability rather than grant revenue as of and for the year ended December 31, 2021. The
PPP loans were forgiven in 2022 and gain on forgiveness has been recognized as is included in other
operating revenue.
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
14
Note 5 – Net Patient Service Revenue
Revenue is recognized as performance obligations are satisfied. Performance obligations are determined
based on the nature of the services provided by the Organization. Revenue for performance obligations
satisfied over time is recognized based on actual charges incurred in relation to total expected (or actual)
charges. The Organization believes that this method provides a faithful depiction of the transfer of
services over the term of the performance obligation based on the inputs needed to satisfy the obligation.
Generally, performance obligations satisfied over time relate to patients in the hospitals receiving
inpatient acute care services or patients receiving services in the outpatient centers or in their homes
(home care). The Organization measures the performance obligation from admission into the hospital, or
the commencement of an outpatient service, to the point when it is no longer required to provide services
to that patient, which is generally at the time of discharge or completion of the outpatient services.
Revenue for performance obligations satisfied at a point in time is generally recognized when goods are
provided to the patients and customers in a retail setting (for example, pharmaceuticals and medical
equipment) and the Organization does not believe it is required to provide additional goods or services
related to that sale.
Because all of its performance obligations relate to contracts with a duration of less than one year, the
Organization has elected to apply the optional exemption provided in FASB ASC 606-10-50-14(a);
therefore, is not required to disclose the aggregate amount of the transaction price allocated to
performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The
unsatisfied or partially unsatisfied performance obligations referred to above are primarily related to
inpatient acute care services at the end of the reporting period. The performance obligations for these
contracts are generally completed when the patients are discharged, which generally occurs within days
or weeks of the end of the reporting period.
The Organization determines the transaction price based on standard charges for goods and services
provided, reduced by contractual adjustments provided to third-party payors, discounts provided to
uninsured patients in accordance with the Organization’s policy, and implicit price concessions provided
to uninsured patients. The Organization determines its estimates of contractual adjustments and
discounts based on contractual agreements, its discount policies, and historical experience. The
Organization determines its estimate of implicit price concessions based on its historical collection
experience with this class of patients.
Contractual agreements with third-party payors provide for payments at amounts less than the
Organization’s established charges. A summary of the payment arrangements with major third-party
payors is as follows:
Medicare – Inpatient acute care services rendered to Medicare program beneficiaries are paid at
prospectively determined rates per discharge, which provides for reimbursement based on Medicare
Severity Diagnosis-Related Groups (MS-DRGs). These rates vary according to a patient classification
system that is based on clinical diagnosis, acuity, and expected use of hospital resources. The majority of
Medicare outpatient services is reimbursed under a prospective payment methodology, the Ambulatory
Payment Classification System (APCs), or fees schedules.
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
15
Medicaid – Inpatient services rendered to Medicaid program beneficiaries are reimbursed under a
prospective payment system similar to Medicare; however, Medicaid utilizes All Payor Refined Diagnosis-
Related Groups (APR-DRGs) as opposed to Medicare’s MS-DRGs. The Majority of Medicaid outpatient
services are reimbursed under a prospective payment methodology, the Enhanced Ambulatory Patient
Groups (EAPG), or fee schedules.
Other – The Organization has entered into payment agreements with certain commercial insurance
carriers, health maintenance organizations, and preferred provider organizations. The basis for payment
to the Organization under these agreements includes prospectively determined rates per discharge,
discounts form established charges, and prospectively determined daily rates and fee schedules.
Laws and regulations concerning government programs, including Medicare and Medicaid, are complex
and subject to varying interpretation. As a result of investigations and notices regarding alleged
noncompliance with those laws and regulations, which, in some instances, have resulted in organizations
entering into significant settlement agreements with the government. Compliance with such laws and
regulations may also be subject to future government exclusion from the related programs. There can be
no assurance that regulatory or government authorities will not challenge the Organization’s compliance
with these laws and regulations, and it is not possible to determine the impact, if any, that such claims or
penalties would have upon the Organization. In addition, the contracts with commercial payors also
provide for retroactive audit and review of claims that can reduce the amount of revenue ultimately
received.
Settlements with third-party payors for retroactive adjustments due to audits, reviews, or investigations
are considered variable consideration and are included in the determination of the estimated transaction
price for providing patient care. These settlements are estimated based on the terms of the payment
agreement with the payor, correspondence from the payor, and the Organization’s historical settlement
activity, including an assessment to ensure that it is probable that a significant reversal in the amount of
cumulative revenue recognized will not occur when the uncertainty associated with the retroactive
adjustment is subsequently resolved. Estimated settlements are adjusted in future periods as adjustments
become known (that is, new information becomes available), or as years are settled or are no longer
subject to such audits, reviews, and investigations. Adjustments arising from a change in the transaction
price were not significant in 2022 or 2021.
Generally, patients who are covered by third-party payors are responsible for related deductibles and
coinsurance, which vary in amount. The Organization also provides services to uninsured patients and
offers those uninsured patients a discount, either by policy or law, from standard charges. The
Organization estimates the transaction price for patients with deductibles and coinsurance and from those
who are uninsured based on historical experience and current market conditions. The initial estimate of
the transaction price is determined by reducing the standard charge by any contractual adjustments,
discounts, and implicit price concessions. Subsequent changes to the estimate of the transaction price
are generally recorded as adjustments to patient service revenue in the period of the change. For the
years ended December 31, 2022 and 2021, no significant additional revenue was recognized due to
changes in the Organization’s estimates of implicit price concessions, discounts, and contractual
adjustments for performance obligations satisfied in prior years. Subsequent changes that are determined
to be the result of an adverse change in the patient’s ability to pay are recorded as changes in the
Organization’s estimates of implicit price concessions.
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
16
Consistent with the Organization’s mission, care is provided to patients regardless of their ability to pay.
Therefore, the Organization has determined that it has provided implicit price concessions to uninsured
patients and patients with other uninsured balances (for example, copays and deductibles). The implicit
price concessions included in estimating the transaction price represent the difference between amounts
billed to patients and the amounts the Organization expects to collect based on its collection history with
those patients.
The Organization has determined that the best depiction of its revenue is by mix of payors as this shows
the amount of revenue recognized from each portfolio and by lines of business.
Patient service revenue disaggregated by payor for the years ended December 31, 2022 and 2021, is as
follows:
2022 2021
Medicare 50,288,489$ 35,338,693$
Medicaid 39,983,368 37,551,399
Commercial 61,350,279 55,682,127
Self-pay 8,646,468 256,325
160,268,604$ 128,828,544$
Patient service revenue disaggregated by line of business for the years ended December 31, 2022 and
2021, is as follows:
2022 2021
Hospital 138,625,161$ 112,529,394$
Clinics 17,895,586 13,282,046
Home Health 3,747,857 3,017,104
160,268,604$ 128,828,544$
The Organization has elected to apply the practical expedient under ASC 340-40-25-4 and therefore, all
incremental customer contract acquisition costs are expenses as incurred, as the amortization period of
the asset that the Organization would have otherwise recognized is one year or less in duration.
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
17
Note 6 – Property and Equipment
A summary of property and equipment at December 31, 2022 and 2021, follows:
2022 2021
Land and improvements 7,080,212$ 8,174,095$
Buildings and improvements 33,559,474 32,194,317
Fixed, major movable, and minor equipment 34,602,580 34,173,224
Construction in progress 1,174,571 325,899
76,416,837 74,867,535
Less accumulated depreciation (50,420,887) (47,171,910)
Net property and equipment 25,995,950$ 27,695,625$
Depreciation expense on property and equipment was $3,320,345 and $3,495,065 for the years ended
December 31, 2022 and 2021, respectively.
Note 7 – Long-Term Debt
Long-term debt consists of the following at December 31, 2022 and 2021:
2022
2021
MultiCare note payable (a)
75,000,000$
75,000,000$
PPP loan payable - Toppenish (b)
- 2,358,900
PPP loan payable - YHHH (c)
- 384,400
Other notes payable (d)
- 288,750
Note payable (e)
158,865 -
75,158,865 78,032,050
Net of current portion
(10,998) (1,024,756)
75,147,867$ 77,007,294$
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
18
(a) MultiCare note payable – In January 2021, the Organization entered into a $75,000,000 note
payable to MultiCare, a Washington nonprofit corporation, which was amended in December 2022
to extend the maturity date (MultiCare Note). The MultiCare Note bears a fixed interest rate of 9.5%
with payments due on June 30 and December 31 of each year, secured by all assets of the
Organization, and matures in December 2025. MultiCare has an option to acquire all of the assets
and operations and assume the liabilities arising after the effective date of the note payable
(Purchase Option). The Purchase Option may be exercised at any time up to the later of (i) the
maturity date, and (ii) the date on which the MultiCare Note is satisfied in full (Option Period). The
Purchase Option can be exercised by MultiCare providing written notice to the Organization prior to
the expiration of the Option Period. MultiCare has not exercised the Purchase Option as of April 30,
2023, which is the date the consolidated financial statements are available to be issued.
(b) PPP loan payable – Toppenish – In July 2020, Toppenish entered into a PPP loan totaling
$2,358,900 with a financial institution. The loan included interest at 1.0% and had an original
maturity date of five years in June 2025. Monthly payments of $57,534 were scheduled to
commence in February 2022 but were deferred pending outcome of application for forgiveness.
This PPP loan was forgiven in 2022.
(c) PPP loan payable – YHHH – In July 2020, YHHH entered into a PPP loan totaling $384,400 with a
financial institution. The loan included interest at 1.0% and had an original maturity date of five
years in June 2025. Monthly payments of $9,376 were scheduled to commence in February 2022
but were deferred pending outcome of application for forgiveness. This PPP loan was forgiven in
2022.
(d) Other notes payable – In 2021, the Organization entered into two notes payable totaling
$1,215,000 with third parties. The unsecured notes payable included fixed interest ranging from
3.0% to 7.5% with monthly payments that totaled $101,250 and matured in 2022.
(e) Note payable – In 2022, the Organization entered into a note payable totaling $160,000 with third
parties. The note is secured by real property and bears interest at 8.0% with monthly payments of
$1,941 and matures in November 2032.
Long-term debt maturities are as follows:
2023
10,998$
2024
75,011,895
2025
12,883
2026
13,952
2027
15,110
Thereafter
94,027
75,158,865$
The note payable to MultiCare is subject to certain covenants regarding certain financial statement
amounts, ratios, and activities of the Organization. The Organization received a waiver for minimum days
in accounts payable, minimum earnings before interest, tax, depreciation, and amortization, minimum
days cash on hand, and 120-day deadline for audited consolidated financial statements covenants as of
December 31, 2022, and through March 31, 2023.
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
19
Note 8 – Leases
The Company is in engaged in leases for portions of the Company’s hospital space, office space, and
hospital equipment. These leases have been evaluated and are accounted for under ASC 840 for the
year ended December 31, 2021, and under ASC 842 for the year ended December 31, 2022.
Pre-adoption of ASC 842 for the year ended December 31, 2021:
Operating leases – The Organization leased certain equipment under noncancelable long-term operating
lease agreements. Total lease expense for the year ended December 31, 2021, for all operating leases,
was $2,031,469.
The following is a maturity analysis of the annual undiscounted cash flows of operating lease liabilities as
of December 31, 2021:
2022 1,834,633$
2023 1,229,459
2024 917,531
2025 918,858
2026 803,507
Thereafter 2,821,253
8,525,241$
Post-adoption of ASC 842 for the year ended December 31, 2022:
The Organization leased certain equipment under noncancelable long-term operating lease agreements.
The Organization recognized the following non-cash expense associated with leases for the year ended
December 31, 2022:
Operating leases
Amortization of ROU assets 1,341,717$
Short-term lease expense
1,000,086
Finance leases
Amortization of ROU assets 51,441
interest on lease liabilities 6,009
Total lease cost 2,399,253$
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
20
During the year ended December 31, 2022, the Organization had the following cash, noncash activities,
and other information associated with leases:
Cash paid for amounts included in the
measurement of lease liabilities
Operating cash flows from operating leases 1,379,395$
Operating cash flows from finance leases 5,919$
Financing cash flows from finance leases 48,820$
Supplemental disclosures on cash flow information
Noncash impact of the implementation of ASC 842
Operating lease ROU assets and liabilities recognized 8,009,319$
Finance lease ROU assets obtained in exchange for
new finance lease liabilities 365,875$
Weighted-average remaining lease term (years)
Operating leases 6.8
Finance leases 6.8
Weighted-average discount rate
Operating leases 1.5%
Finance leases 1.8%
The undiscounted future payments due under operating and finance leases as of December 31, 2022,
were as follows:
Total
2023 1,204,185$ 55,705$ 1,259,890$
2024 1,104,320 55,705 1,160,025
2025 1,076,302 55,705 1,132,007
2026 937,711 55,705 993,416
2027 732,797 55,705 788,502
Thereafter 2,051,580 55,705 2,107,285
Total lease payments 7,106,895 334,230 7,441,125
Less imputed interest (367,388) (17,085) (384,473)
Less current obligations (1,110,709) (50,573) (1,161,282)
Long-term lease obligations 5,628,798$ 266,572$ 5,895,370$
Operating
leases
Finance leases
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
21
Note 9 – Retirement Plan
The Organization sponsors the Regional Health 401(k) Plan (the 401(k) Plan), a defined contribution plan
that covers all employees with a minimum of three months’ service. Employees are 100 percent vested
upon entering the 401(k) Plan. The Organization makes matching contributions to the 401(k) Plan up to
3% of employee compensation plus additional matching of 50%of employee contributions between 3%
and 5% of compensation. Total expenses for the years ended December 31, 2022 and 2021, were
$1,739,573 and $1,586,093, respectively.
Note 10 – Concentrations of Credit Risk
Patient accounts receivable – The Organization grants credit without collateral to its patients, most of
whom are insured under third-party payor agreements. The mix of receivables from third-party payors and
patients at December 31, 2022 and 2021, were as follows:
2022 2021
Medicare
31% 31%
Medicaid
27% 25%
Commercial insurance
36% 37%
Self-pay
6% 7%
100% 100%
Physicians – The Organization is dependent on local physicians practicing in its service area to provide
admissions and utilize hospital services on an outpatient basis. A decrease in the number of physicians
providing these services or change in their utilization patterns may have an adverse effect on hospital
operations.
Cash and cash equivalents – At times, deposits with financial institutions exceed Federal Deposit
Insurance Corporation insured limits.
Collective bargaining units – Sunnyside and Toppenish both have agreements with Washington State
Nurses Association (WSNA). The nurses assigned to YHHH are covered by the Toppenish WSNA
agreement. At December 31, 2022, there were 129 nurses of the 689 total employees of the Organization
covered by WSNA agreements. At December 31, 2021, there were 193 nurses of the 847 total
employees of the Organization covered by WSNA agreements.
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
22
At December 31, 2022, the following status for both contracts with WSNA is as follows:
WSNA agreement with Sunnyside has been negotiated and ratified for an effective date of January 1,
2022. The Sunnyside agreement calls for a 7.5% increase in beginning scale rate for registered
nurses and keeps in place the existing scale for Sunnyside with a 3% increase in year two and year
three scale rates. WSNA agreement with Toppenish has been negotiated and ratified for an effective
date of August 1, 2022. The Toppenish agreement calls for a 22% increase in beginning scale rate for
registered nurses and keeps in place the existing scale for Sunnyside with a 3% increase in year two
and year three scale rates. In August 2022, the Sunnyside agreement was amended with an effective
date of October 1, 2022, to increase the beginning scale rate an additional 15%, with no additional
changes to year two and year three.
Note 11 – Liquidity and Availability
Financial assets available for general expenditure that are without donor or other restrictions limiting their
use within one year of December 31, 2022 and 2021, comprise the following:
2022 2021
Cash and cash equivalents 4,499,315$ 4,612,077$
Patient accounts receivable 28,141,842 24,148,323
32,641,157$ 28,760,400$
The Organization has $4,499,315 and $4,612,077 of cash and equivalents available within one year of
the balance sheet date at December 31, 2022 and 2021, respectively, to meet cash needs for general
expenditures. Those financial assets represent 10 days and 12 days of normal operating expenses, which
are, on average, approximately $449,000 and $393,000 per day for the years ended December 31, 2022
and 2021, respectively. The Organization is actively working to improve cash flows (see Note 3). There
are certain debt covenant compliances that the Organization must adhere to per its debt agreements, and
as of December 31, 2022 and 2021, the Organization was not in compliance with its debt covenants and
received a waiver (see Note 7).
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
23
Note 12 – Functional Expenses
The Organization provides health care services to patients within its geographic location. Expenses
related to providing these services by functional class for the years ended December 31, 2022 and 2021,
were as follows:
Patient Health Care General and
and Program Administrative Total
Salaries and wages 44,955,655$ 15,797,404$ 60,753,059$
Employee benefits 4,748,875 8,477,686 13,226,561
Professional fees 20,016,253 (626,153) 19,390,100
Supplies 18,483,187 1,451,503 19,934,690
Purchased services 16,050,199 12,010,030 28,060,229
Depreciation and amortization - 3,320,345 3,320,345
Interest expense 99,319 7,079,974 7,179,293
Facility expenses 1,613,740 2,476,103 4,089,843
Insurance 51,917 3,161,509 3,213,426
Other expenses 483,897 7,586,801 8,070,698
106,503,042$ 60,735,202$ 167,238,244$
Year Ended December 31, 2022
Patient Health Care General and
and Program Administrative Total
Salaries and wages $42,071,725 $11,783,788 53,855,513$
Employee benefits 7,414,988 2,076,850 9,491,838
Professional fees 12,676,667 3,015,695 15,692,362
Supplies 17,898,021 1,362,742 19,260,763
Purchased services 12,247,116 13,774,505 26,021,621
Depreciation and amortization 559 3,494,506 3,495,065
Interest expense 87,659 7,134,307 7,221,966
Facility expenses 1,683,098 1,930,898 3,613,996
Insurance 34,820 2,902,805 2,937,625
Other expenses 1,719,644 3,354,794 5,074,438
95,834,297$ 50,830,890$ 146,665,187$
Year Ended December 31, 2021
No significant allocations of expenses are made from general and administrative expenses to patient
health care and program services.
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
24
Note 13 – Commitments and Contingencies
Professional liability – The Organization has professional liability insurance coverage with Physicians
Insurance Mutual Group. The policy provides coverage on a claims-made basis. Claims filed in the
current year are covered by the current policy. If there are unreported incidents that result in a
malpractice claim for the current year, these will only be covered in the year the claim is reported to the
insurance carrier if the Organization purchases claims-made coverage in that year or if the Organization
purchases insurance to cover prior acts.
Physicians Insurance Mutual Group (PIMG) malpractice insurance provides $1,000,000 per claim of
primary coverage with an annual aggregate limit of $5,000,000 to the Organization. The annual aggregate
limit of was reduced to $3,000,000 during 2021. The Organization’s policy has no deductible per claim or
in the aggregate except for Toppenish, which changed the policy to include a deductible of $250,000 per
claim with no aggregate effective June 15, 2021. Sunnyside also maintained excess liability coverage
with limits of $10,000,000 per claim and $10,000,000 aggregate with PIMG, which expired June 15, 2021.
Toppenish also maintained excess liability coverage with limits of $5,000,000 per claim and $5,000,000
aggregate with PIMG, which expired June 15, 2021. Management is not aware of any pending claims that
exceed the coverage limitations provided by their policy. Management is of the opinion that the impact, if
any, is immaterial, and any settlement would not have a material adverse effect on the Organization’s
consolidated balance sheets.
Workers’ compensation – The Organization, except for Sunnyside, participates in the Washington State
Department of Labor & Industries Workers’ Compensation Trust (Trust). Sunnyside participates in a group
purchasing pool with Washing State Hospital Association (WHSA) for workers’ compensation. The
Organization pays monthly premiums to the Trust and WHSA based the number of employee hours by
risk class of as defined by the Trust and WHSA. Management is not aware of any pending claims that
exceed the coverage limitations provided by their policy. Management is of the opinion that the impact, if
any, is immaterial, and any settlement would not have a material adverse effect on the Organization’s
consolidated balance sheets.
Employee health plan – The Organization partially self-insures the cost of employee healthcare benefits
as it purchases annual stop-loss insurance coverage for all claims in excess of $150,000 per claim.
Liabilities on the consolidated balance sheet include an accrual for claims that have been incurred but not
reported of approximately $1,292,700 and $925,000 at December 31, 2022 and 2021, which are included
in accrued compensation and benefits in the consolidated balance sheet. Claims liabilities are
reevaluated periodically to take into consideration recently settled claims, frequency of claims, and other
economic and social factors.
Litigation, claims, and disputes – The Organization is subject to the usual contingencies in the normal
course of operations relating to the performance of its tasks under its various programs. In the opinion of
management, the ultimate settlement of litigation, claims, and disputes in process will not be material to
the consolidated balance sheet of the Organization.
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
25
Industry regulations – The health care industry is subject to numerous laws and regulations of federal,
state, and local governments. Laws and regulations concerning government programs, including
Medicare and Medicaid, are complex and subject to varying interpretation. As a result of investigations by
governmental agencies, various health care organizations have received requests for information and
notices regarding alleged noncompliance with those laws and regulations, which, in some instances, have
resulted in organizations entering into significant settlement agreements. Compliance with such laws and
regulations may also be subject to future government review and interpretation, as well as significant
regulatory action, including fines, penalties, and potential exclusion from the related programs. There can
be no assurance that regulatory authorities will not challenge the Organization’s compliance with these
laws and regulations, and it is not possible to determine the impact (if any) such claims or penalties would
have upon the Organization. In addition, the contracts the Organization has with commercial payors also
provide for retroactive audit and review of claims. Management believes that the Organization is in
substantial compliance with current laws and regulations.
Note 14 – Discontinued Operations
In January 2020, the Organization ceased providing patient services at ARMC. In August 2022, the
Organization ceased providing durable medical equipment and supplies at Medical Supply. The assets
and liabilities of the discontinued operation included in the consolidated balance sheet as of the years
ended December 31, 2022 and 2021, were as follows:
ARMC Medical Supply 2021
ASSETS
Due from (to) intercompany 1,004,016$ -$ 1,004,016$
ARMC Medical Supply 2021
ASSETS
Patient accounts receivable 135,314$ -$ 135,314$
Due from (to) intercompany - (243,665) (243,665)
Property and equipment, net 1,058,400 26,233 1,084,633
1,193,714 (217,432) 976,282
LIABILITIES
Accounts payable and accrued expenses 420,169 - 420,169
Other accrued liabilities (374,609) - (374,609)
45,560 - 45,560
1,148,154$ (217,432)$ 930,722$
December 31, 2022
December 31, 2021
Astria Health and Subsidiaries
Notes to Consolidated Financial Statements
26
The operating results of the discontinued operation consists of the following for the years ended
December 31, 2022 and 2021:
ARMC Medical Supply 2021
Major classes
Net patient service revenue -$ 384,629$ 384,629$
Other operating revenue 2,672 - 2,672
Salaries and wages 2,399 (72,737) (70,338)
Employee benefits (5,424) (6,927) (12,351)
Professional fees (962) - (962)
Supplies 4,622 (61,767) (57,145)
Purchased services 157 - 157
Depreciation and amortization (50) (4,465) (4,515)
Interest expenses - (346) (346)
Facility expenses (26,400) (8,114) (34,514)
Insurance (9,948) - (9,948)
Other (489,885) (12,841) (502,726)
(522,819)$ 217,432$ (305,387)$
ARMC Medical Supply 2021
Major classes
Net patient service revenue 135,311$ 22,837$ 158,148$
Salaries and wages 32,564 (101,664) (69,100)
Employee benefits 34,855 (37,964) (3,109)
Professional fees (1,928) - (1,928)
Supplies (71,769) (90,574) (162,343)
Purchased services (15,198) (5,263) (20,461)
Depreciation and amortization - (558) (558)
Interest expenses (86,284) - (86,284)
Facility expenses (139,250) (12,690) (151,940)
Insurance (19,490) (250) (19,740)
Other (516,966) (32,488) (549,454)
Loss on bankruptcy settlements (1,735,303) - (1,735,303)
(2,383,458)$ (258,614)$ (2,642,072)$
Year ended December 31, 2022
Year ended December 31, 2021
Significant cash flows and noncash items from operating and investing activities of the discontinued
operation for the year ended December 31, 2022 and 2021, were as follows:
ARMC Medical Supply 2021
Operating cash flow items
Changes in operating assets and liabilities
Other receivables 135,314$ -$ 135,314$
Due from (to) intercompany 54,384$ (217,432)$ (163,048)$
Accounts payable and accrued expenses (420,169)$ -$ (420,169)$
Other accrued liabilities 374,609$ -$ 374,609$
There were no other capital expenditures or significant noncash investing cash flows during the years
ended December 31, 2022 and 2021.
Supplementary Information
Astria Health and Subsidiaries
See report of independent auditors.
28
Consolidating Balance Sheet
December 31, 2022
Astria Astria Consolidated
Health Sunnyside Toppenish ARMC Home Health YHCH Medical Supply Foundation
Eliminations
Total
ASSETS
CURRENT ASSETS
Cash and cash equivalents 527,038$ 2,897,039$ 307,312$ -$ -$ -$ -$ 767,926$ -$ 4,499,315$
Patient accounts receivable - 16,664,604 10,850,256 - 225,275 401,707 - - - 28,141,842
Other receivables - 26,003 - - - - - - - 26,003
Inventory - 2,828,936 2,730,152 - - - - - - 5,559,088
Prepaid expenses and other assets 818,267 306,230 378,612 - - 17,247 - 185,713 - 1,706,069
Due from (to) intercompany 8,139,896 15,363,452 (25,171,592) 1,004,016 519,907 144,321 - - - -
Total current assets 9,485,201 38,086,264 (10,905,260) 1,004,016 745,182 563,275 - 953,639 - 39,932,317
PROPERTY AND EQUIPMENT, net 1,122,018 16,845,601 8,028,331 - - - - - - 25,995,950
OPERATING LEASE RIGHT-OF-USE ASSETS, net 495,318 2,410,244 3,871,623 - - - - - - 6,777,185
FINANCE LEASE RIGHT-OF-USE ASSETS, net - 248,693 65,741 - - - - - - 314,434
OTHER ASSETS - 858,022 - - - - - - - 858,022
Total assets 11,102,537$ 58,448,824$ 1,060,435$ 1,004,016$ 745,182$ 563,275$ -$ 953,639$ -$ 73,877,908$
LIABILITIES AND NET (DEFICIT) ASSETS
CURRENT LIABILITIES
Accounts payable and accrued expenses 2,088,306$ 5,406,846$ 4,931,802$ -$ 3,231$ 24,679$ -$ -$ -$ 12,454,864$
Accrued compensation and benefits 945,728 2,886,792 1,994,113 - - 141,948 - - - 5,968,581
Estimated third-party payor settlements - 1,878,006 (501,191) - - - - - - 1,376,815
Other accrued liabilities 853,050 1,345,960 25,182 - - 4,696 - - - 2,228,888
Current portion of long-term debt - - 10,998 - - - - - - 10,998
Current portion of operating lease liabilities 117,184 460,057 533,468 - - - - - - 1,110,709
Current portion of finance lease liabilities - 39,975 10,598 - - - - - - 50,573
Total current liabilities 4,004,268 12,017,636 7,004,970 - 3,231 171,323 - - - 23,201,428
LONG-TERM DEBT, net of current portion 75,000,000 - 147,867 - - - - - - 75,147,867
OPERATING LEASE LIABILITIES, less current portion 380,182 1,894,488 3,354,128 - - - - - - 5,628,798
FINANCE LEASE LIABILITIES, less current portion - 210,897 55,675 - - - - - - 266,572
OTHER LONG-TERM LIABILITIES 400,000 - - - - - - - - 400,000
Total liabilities 79,784,450 14,123,021 10,562,640 - 3,231 171,323 - - - 104,644,665
NET (DEFICIT) ASSETS
Without donor restrictions (68,681,913) 44,325,803 (9,502,205) 1,004,016 741,951 391,952 - 953,639 - (30,766,757)
Total net (deficit) assets (68,681,913) 44,325,803 (9,502,205) 1,004,016 741,951 391,952 - 953,639 - (30,766,757)
Total liabilities and net (deficit) assets 11,102,537$ 58,448,824$ 1,060,435$ 1,004,016$ 745,182$ 563,275$ -$ 953,639$ -$ 73,877,908$
Astria Health and Subsidiaries
See report of independent auditors.
29
Consolidating Balance Sheet
December 31, 2021
Astria Astria Consolidated
Health Sunnyside Toppenish ARMC Home Health YHCH Medical Supply Foundation
Eliminations
Total
ASSETS
CURRENT ASSETS
Cash and cash equivalents 848,693$ 3,260,687$ 114,438$ -$ -$ -$ -$ 388,259 - 4,612,077$
Patient accounts receivable - 14,479,183 8,865,278 135,314 95,288 573,260 - - - 24,148,323
Inventory - 2,889,559 2,450,432 - - - - - - 5,339,991
Prepaid expenses and other assets 832,754 193,519 305,615 - - 14,514 - 225,408 - 1,571,810
Due from (to) intercompany 151,961 14,698,896 (14,576,096) - 237,137 (268,233) (243,665) - - -
Total current assets 1,833,408 35,521,844 (2,840,333) 135,314 332,425 319,541 (243,665) 613,667 - 35,672,201
PROPERTY AND EQUIPMENT, net 397,520 18,456,463 7,757,009 1,058,400 - - 26,233 - - 27,695,625
OTHER ASSETS - 897,331 - - - - - 355,520 - 1,252,851
Total assets 2,230,928$ 54,875,638$ 4,916,676$ 1,193,714$ 332,425$ 319,541$ (217,432)$ 969,187$ -$ 64,620,677$
LIABILITIES AND NET (DEFICIT) ASSETS
CURRENT LIABILITIES
Accounts payable and accrued expenses 3,845,569$ 6,469,357$ 3,686,794$ 420,169$ -$ 30,318$ -$ -$ -$ 14,452,207$
Accrued compensation and benefits 812,124 3,445,283 1,569,082 - - 152,016 - - - 5,978,505
Estimated third-party payor settlements - 1,974,956 (566,961) - - - - - - 1,407,995
Other accrued liabilities 412,476 982,333 38,005 (374,609) - 10,093 - - - 1,068,298
Current portion of long-term debt 80,417 208,333 632,874 - - 103,132 - - - 1,024,756
Total current liabilities 5,150,586 13,080,262 5,359,794 45,560 - 295,559 - - - 23,931,761
LONG-TERM DEBT, net of current portion 75,000,000 - 1,726,026 - - 281,268 - - - 77,007,294
OTHER LONG-TERM LIABILITIES 235,114 - - - - - - - - 235,114
Total liabilities 80,385,700 13,080,262 7,085,820 45,560 - 576,827 - - - 101,174,169
NET (DEFICIT) ASSETS
Without donor restrictions (78,154,772) 41,795,376 (2,169,144) 1,148,154 332,425 (257,286) (217,432) 969,187 - (36,553,492)
Total net (deficit) assets (78,154,772) 41,795,376 (2,169,144) 1,148,154 332,425 (257,286) (217,432) 969,187 - (36,553,492)
Total liabilities and net (deficit) assets 2,230,928$ 54,875,638$ 4,916,676$ 1,193,714$ 332,425$ 319,541$ (217,432)$ 969,187$ -$ 64,620,677$
Astria Health and Subsidiaries
See report of independent auditors.
30
Consolidating Statement of Operations
Year Ended December 31, 2022
Astria Astria Consolidated
Health Sunnyside Toppenish ARMC Home Health YHCH Medical Supply Foundation Eliminations Total
REVENUES, GAINS, AND OTHER SUPPORT
Net patient service revenue -$ 102,776,838$ 53,743,909$ -$ 1,054,421$ 2,693,436$ -$ -$ -$ 160,268,604$
Other operating revenue 42,774,286 296,360 2,635,817 - 3,801 731,788 - - (34,216,486) 12,225,566
Grant income - 412,915 1,213,461 - - - - - - 1,626,376
Total unrestricted revenues, gains, and other support 42,774,286 103,486,113 57,593,187 - 1,058,222 3,425,224 - - (34,216,486) 174,120,546
OPERATING EXPENSES
Salaries and wages 6,800,472 30,739,421 21,035,919 - 413,321 1,763,926 - - - 60,753,059
Employee benefits 5,696,146 7,911,476 4,468,667 - 57,292 252,107 - - (5,159,127) 13,226,561
Professional fees (927,833) 8,580,384 11,710,352 - 750 26,447 - - - 19,390,100
Supplies 112,748 13,733,954 5,974,751 - 22,490 82,162 - 10,076 (1,491) 19,934,690
Purchased services 11,243,717 12,081,527 4,497,938 - 126 236,921 - - - 28,060,229
Depreciation and amortization 339,680 2,265,107 715,558 - - - - - - 3,320,345
Interest expense 7,133,925 4,629,848 2,483,700 - - 65,745 - - (7,133,925) 7,179,293
Facility expenses 489,761 1,848,448 1,706,893 - 2,928 41,813 - - - 4,089,843
Insurance 723,621 1,919,361 575,024 - - 5,019 - 349 (9,948) 3,213,426
Other expenses 989,027 16,741,291 11,757,446 - 151,475 340,161 - 3,293 (21,911,995) 8,070,698
Total operating expenses 32,601,264 100,450,817 64,926,248 - 648,382 2,814,301 - 13,718 (34,216,486) 167,238,244
OPERATING INCOME (LOSS) 10,173,022 3,035,296 (7,333,061) - 409,840 610,923 - (13,718) - 6,882,302
OTHER INCOME (LOSS)
Loss on bankruptcy settlements, net (730,373) - - - - - - - - (730,373)
Other income (loss), net 66 (58,043) - - - - - (1,830) - (59,807)
Total other income (loss), net (730,307) (58,043) - - - - - (1,830) - (790,180)
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES
FROM CONTINUING OPERATIONS 9,442,715 2,977,253 (7,333,061) - 409,840 610,923 - (15,548) - 6,092,122
DISCONTINUED OPERATIONS
Loss on discontinued operations 30,144 (446,826) - (144,138) (314) 38,315 217,432 - - (305,387)
Changes in net (deficit) assets 9,472,859$ 2,530,427$ (7,333,061)$ (144,138)$ 409,526$ 649,238$ 217,432$ (15,548)$ -$ 5,786,735$
Astria Health and Subsidiaries
See report of independent auditors.
31
Consolidating Statement of Operations
Year Ended December 31, 2021
Astria Astria Consolidated
Health Sunnyside Toppenish ARMC Home Health YHCH Medical Supply Foundation Eliminations Total
REVENUES, GAINS, AND OTHER SUPPORT
Net patient service revenue -$ 76,623,198$ 49,188,242$ -$ 894,602$ 2,122,502$ -$ -$ -$ 128,828,544$
Other operating revenue 33,534,726 390,473 2,360,816 - - 481 - - (33,534,606) 2,751,890
Grant income - 10,636,714 414,385 - - - - - - 11,051,099
Contributions in-kind - 215,385 131,685 - - - - - - 347,070
Total unrestricted revenues, gains, and other support 33,534,726 87,865,770 52,095,128 - 894,602 2,122,983 - - (33,534,606) 142,978,603
OPERATING EXPENSES
Salaries and wages 5,896,580 26,555,480 19,210,314 - 538,292 1,654,847 - - - 53,855,513
Employee benefits 5,785,910 4,902,631 3,684,680 - 149,781 318,437 - - (5,349,601) 9,491,838
Professional fees 1,943,054 5,858,615 7,930,545 - - 16,962 - - (56,814) 15,692,362
Supplies 216,665 14,535,484 4,582,215 - 37,736 76,664 - - (188,001) 19,260,763
Purchased services 10,811,932 23,748,125 11,085,736 - 94,093 372,892 - - (20,091,157) 26,021,621
Depreciation and amortization 397,105 2,441,048 656,912 - - - - - - 3,495,065
Interest expense 7,121,315 4,580,014 2,566,238 - - 75,050 - - (7,120,651) 7,221,966
Facility expenses 256,050 1,872,822 1,449,609 - 3,324 32,696 - - (505) 3,613,996
Insurance 831,352 1,704,229 419,970 - - 1,621 - 349 (19,896) 2,937,625
Other expenses 1,002,549 2,285,917 2,269,662 - 53,109 170,637 - 545 (707,981) 5,074,438
Total operating expenses 34,262,512 88,484,365 53,855,881 - 876,335 2,719,806 - 894 (33,534,606) 146,665,187
OPERATING INCOME (LOSS) (727,786) (618,595) (1,760,753) - 18,267 (596,823) - (894) - (3,686,584)
OTHER INCOME (LOSS)
Gain on bankruptcy settlements, net 1,161,662 - - - - - - - - 1,161,662
Other income (loss), net 5,202 (137,105) 1 - - - - 45,982 - (85,920)
Total other income (loss), net 1,166,864 (137,105) 1 - - - - 45,982 - 1,075,742
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES
FROM CONTINUING OPERATIONS 439,078 (755,700) (1,760,752) - 18,267 (596,823) - 45,088 - (2,610,842)
DISCONTINUED OPERATIONS
Loss on discontinued operations (462,321) - - (1,921,137) - - (258,614) - - (2,642,072)
Changes in net (deficit) assets (23,243)$ (755,700)$ (1,760,752)$ (1,921,137)$ 18,267$ (596,823)$ (258,614)$ 45,088$ -$ (5,252,914)$
