By MATT BLOIS
A Brentwood company that operates surgical facilities across the U.S. is hoping to move past a federal investigation and continue growing.
Surgery Partners Inc. reported a net loss of about $95 million dollars in 2018 on Wednesday, compared to net income of $82 million in 2017.
Revenue for the company rose 32 percent from 2017 to 2018, from $1.3 billion to $1.8 billion. CFO Thomas Cowhey said that was primarily related to the August 2017 acquisition of National Surgical Healthcare.
The loss includes a $46 million charge related to a federal investigation that started in October 2017. The federal government sent a letter to Surgery Partners requesting records about the medical necessity of drug tests ordered by Surgery Partner physicians carried out at laboratories owned by the company.
The company reported that it is still discussing that investigation with the federal government, but expects that the $46 million charge will cover costs and settlements related to the issue.
“It is important that we put this matter behind us so we can ensure our focus is in providing exceptional clinical care,” CEO Wayne DeVeydt said on a conference call. “This investigation relates to a chapter of our past that we are looking forward to closing shortly.”
During the call, DeVeydt said the company has been focusing on what the company does best: operating short-stay surgical facilities. The company sold some parts of its business that contributed about $100 million a year in revenue. Executives said those parts of the business were profitable, but didn’t have high profit margins.
Cowhey said the company is focusing on surgery facilities, it also operates optical and support services, like laboratory work. He said the company consolidated 16 physician practices in 2018.
“We are pleased that we continue to make progress to eliminate distractions at our ancillary and optical businesses so we can continue to focus management time and effort on the core elements of our growth strategy,” Cowhey said on the conference call.
In addition to selling off some less profitable parts of the company, Surgery Partners also bought two large facilities last year. It purchased an 88 bed hospital near Idaho Falls, Idaho and an adulatory surgery center at a large retirement community in Florida.
Surgery Partners projected that revenues will grow in the low single digit range in 2019.