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MHC News
Jan 08, 2010
Memorial Health Center and Flambeau Hospital Prepare for 10% Cut in State Medicaid Reimbursement
Memorial Health Center and Flambeau Hospital Prepare for 10% Cut in State Medicaid Reimbursement
(Medford) Memorial Health Center, along with other Critical Access Hospitals (CAHs) across the state, will see a 10 percent reduction in Wisconsin Medicaid reimbursements beginning January 1, as part of a state budget provision aimed at filling a $600-million gap in the state’s Medicaid program.Officials from Memorial Health Center (Gregg Olson, CEO, and Chip Courtney, Memorial Health Center’s Board Chair) and Flambeau Hospital in Park Falls (David Grundstrom, CEO, and Doug Moquin, Flambeau Hospital’s Board Chair) met Monday, January 4, with Senator Russ Decker to discuss the impact of the state’s 2009-2011 budget provision that calls for the Wisconsin Department of Health Services to cut Medicaid payments to CAHs by $18 million – or 10 percent across-the-board.The cut permanently changes CAH reimbursement from 100 percent to 90 percent of cost, a reversal of state policy never approved by the legislature.The recession has taken a heavy toll on rural Wisconsin hospitals already. Over the past year, charity care has risen 24 percent; bad debt has climbed 14.5 percent; and nearly half of rural Wisconsin hospitals either lost money or barely broke even in 2008. Every person who arrives at a Critical Access Hospital is cared for, regardless of personal or financial circumstances.For Memorial Health Center, a Critical Access Hospital since 2002, the cut would mean a $250,000 decrease in Medicaid reimbursements, which CEO Gregg Olson said could result in 2010.“We certainly don’t want to change our hospital rates and charge more to those that have insurance. This only shifts the burden – the exact thing we want to avoid,” said Olson. “This is a very difficult situation.”The Memorial Health Center organization owns a nursing home and kidney dialysis center, and like most CAHs, these services are subsidized by the hospital. Cutting payments for hospital care would challenge the entire organization, including these important services.The cut would also equate to a loss of about $189,000 for Flambeau Hospital.Grundstrom, a Director of the Wisconsin Hospital Association (WHA) Board, talked at length with Decker about discussions held at the WHA meetings and options being considered to address these challenges."Memorial Health Center and Flambeau Hospital not only share this challenge, but a common goal of providing access to high quality health care at affordable prices for the patients in our communities," stated Grundstrom.The Critical Access Hospital program was created by the 1997 federal Balanced Budget Act as a safety net device to assure Medicare beneficiaries access to health care services in rural areas. It was designed to allow more flexible staffing options relative to community need, to simplify billing methods, and to create incentives for developing local integrated health delivery systems, including acute, primary, emergency, and long-term care.According to the WHA, Wisconsin ranks “relatively low” among all other states in terms of bringing in federal money.The WHA encourages local residents to show their support for local hospitals. They can talk to their elected officials and say, ‘we need to help our Critical Access Hospitals, and we need to help our rural hospitals get more federal dollars.’Courtney said he’s pleased Decker was willing to visit and discuss alternative thoughts and solutions that would help prevent or turn-around the devastating cuts.
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Standing (l. - r.): Gregg Olson, CEO Memorial Health Center; and David Grundstrom, CEO Flambeau Hospital. Seated (l. - r.): Doug Moquin, Flambeau Hospital’s Board Chair; Senator Russ Decker; and Chip Courtney, Memorial Health Center’s Board Chair.
