By ANDY GARDNER

MASSENA -- Despite finishing October with a $295,000 net loss, Massena Memorial Hospital chief financial officer James Smith had good news for the MMH Board of Managers on Monday.

The hospital is to receive about $4 million in settlement money and federal assistance. In addition to that, the state has agreed to let the hospital adjust its books after several years of incorrectly coding Medicaid payments, meaning they are off the hook from owing Albany $2.5 million.

This will replenish MMH’s cash reserves, which have been dwindling to pay off their negative monthly net loss.

He said they will receive $193,000 from a Medicaid audit statement, $196,000 from the Rural Floor Budget Neutrality agreement and $3.9 million from the Interim Access Assurance Fund (IAAF).

The IAAF is a federal program to assist hospitals that only have enough cash on-hand to operate for 15 days or less.

The payment will help them make their yearly payment to the state pension system. They owe about $4 million by Dec. 10.

The accounting error for which the state forgave MMH started in 2011. Their accountant was recording Medicaid payments as “other insurance.” When the state audited their books, it looked as if MMH had been overcompensated, and it added $770,000 in debt for one year alone. Had they not been able to correct the error with that state, it could have led to them owing $2.5 million over the next several years, according to what Smith told the board in October.

A financial and statistic summary presented to the MMH board Monday night said they finished October with a $295,000 loss from operations. Year-to-date, they are about $3.5 million in the red.