RMCHCS releases 2022 tax forms
By Molly Ann Howell
Managing Editor
When Wayne Gillis became CEO of Rehoboth McKinley Christian Health Care Services in November 2024, he inherited an organization buried under a mountain of paperwork and years of unfiled taxes.
At the time, the hospital had not yet completed its 2022 tax filing.
To resolve the backlog, RMCHCS hired CFO David McGrail in January 2025 while retaining interim CFO Steve Miller. Gillis assigned Miller the sole task of resolving the back taxes, while McGrail manages daily finances.
“We’re taking on that expense [of two CFOs] so we can get caught up as fast as we can,” Gillis explained in a previous interview with the Sun. “[McGrail’s] only job is to work with the auditors to get the 2022 taxes.”
The team completed that work on Dec. 12.
ANALYZING THE DEFICITS
According to the 2022 Form 990, the hospital recorded a loss of more than $12.1 million in 2021. In 2022, that deficit grew to nearly $21.9 million.
The hospital generated more revenue in 2021 than in 2022, earning more than $70.4 million compared to $63 million. However, expenses rose in 2022, reaching nearly $85 million compared to $82.5 million in 2021.
Gillis attributed the financial missteps and backlog to the hospital’s high administrative turnover.
“We’ve had so much turnover here, in the CFO role as well as in my role, that there was just a lot of inconsistency and [people] just not necessarily applying the right accounting rules,” he said.
When the team began the 2022 filing, it had to reopen 2021 records to correct errors. Through this process, Gillis said the hospital established proper procedures for its 2023, 2024, and 2025 filings. He expects the team to finish the 2023 taxes by this summer.
The process requires the organization to spend six to eight weeks answering questions from state auditors. Once auditors’ requirements are met, the state must approve the audit. RMCHCS received that approval Dec. 12.
Gillis said that although the hospital filed its 2022 Form 990 late, it avoided penalties and fees because it had filed an extension.
Instead, the additional costs stemmed from auditor fees. The hospital paid an extra $50,000 to the auditors, bringing the total cost of the audit to approximately $200,000.
Gillis lamented that the hospital’s operations are far different today when compared to 2022.
For instance, the hospital’s workforce cost has vastly changed.
During Covid, RMCHCS relied heavily on travel nurses to keep pace with high demand for patient beds.
In a May 2022 interview with the Sun, then-CEO Bill Patten commented on the hospital’s use of travel nurses.
“During the pandemic we had as many as 51 travelers,” he said. “With the hiring of permanent staff, we’re whittling that down smaller and smaller. I don’t know if we’ll ever get where we don’t have any travelers. In my mind if we are within the range of four to six, that’s probably the sweet spot.”
In 2022, the hospital paid high premiums to retain travel nurses. During the pandemic, that rate reached $175 an hour. Today, the rate has dropped to about $95 an hour, while staff nurses at RMCHCS earn approximately $45 an hour.
With those higher Covid costs in mind, the difference in salaries between 2021 and 2022 makes sense. The hospital paid nearly $45 million in salaries in 2021 and about $29 million in 2022, a difference of $16 million.
In addition to payroll, a hospital must furnish its facility and maintain equipment. When the hospital purchases new furniture or equipment, the expense is recorded as a liability until it is paid off. Any equity gained—whether the item is partially or fully paid—is then considered an asset.
In 2022, RMCHCS held more than $67.5 million in liabilities and nearly $53.2 million in assets.
Despite their financial issues, the hospital did receive some help.
According to their 990, they received a total over $3.7 million in donations/grants. Hospital officials declined to disclose where those grants came from.
Following the organization’s recent 2022 tax filing, the public can expect a report on its 2023 Form 990 this summer.
