Lexington Regional Health Center finished fiscal 2026 with improved financial measures and a clean audit opinion, with additional Medicaid-related revenue identified as a major factor in the hospital’s results.
Auditor Randy Hoffman presented the findings Tuesday to the hospital’s Board of Directors. The audit firm issued an unmodified opinion on the hospital’s financial statements, meaning the statements received the firm’s clean audit assessment. Hoffman also said the audit process proceeded smoothly and credited the hospital’s finance staff with supplying timely and accurate information.
Cash position and margin improved
The hospital’s days of cash on hand rose to 166 days in fiscal 2026, compared with 142 days in fiscal 2025. The measure reflects the organization’s available cash and investments and was one of several indicators that improved during the year.
Lexington Regional’s total margin reached 10.7% in 2026. Hoffman said the State Directed Payment program was the primary reason for the stronger margin. The program provided additional Medicaid-related revenue to hospitals, and he said many critical access hospitals across Nebraska also recorded better financial results because of the payments.
- Days of cash on hand increased from 142 to 166.
- The hospital’s total margin reached 10.7% in fiscal 2026.
- State Directed Payments were identified as the main driver of the improved results.
Directed payments shape hospital results
State Directed Payments are Medicaid-related payments that were included in the hospital’s fiscal 2026 revenue. Hoffman told board members that the payments accounted for much of Lexington Regional’s financial improvement, rather than the change representing the hospital’s more typical operating performance in recent years.
The financial results also place Lexington Regional among Nebraska’s larger critical access hospitals. Hoffman said the hospital ranked as the eighth-largest critical access hospital in Nebraska in 2025 when measured by net patient service revenue. He also highlighted its swing-bed program, under which qualifying hospital beds can be used for certain extended-care services. Lexington ranked sixth among the state’s critical access hospitals for swing-bed days, he said.
Federal changes could affect future payments
Hoffman cautioned hospital leaders that federal changes could reduce future Medicaid-directed payments beginning in 2028. He encouraged the organization to continue tracking reimbursement trends and opportunities for growth as it plans its finances.
Hospital leaders said the audit showed Lexington Regional remains financially stable while continuing to look for ways to expand services and care for more patients in the region. The fiscal 2026 audit was completed as the hospital and other Nebraska critical access hospitals continue to assess how much of their recent financial performance came from the State Directed Payment program.
