Restored funding helps rural Pennsylvanian hospitals
Cindy Cowie is CEO of Southwest Regional Medical Center in Waynesburg, which serves a high number of Medicare patients.
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Administrators at 21 outlying community hospitals in Pennsylvania received welcome news at year's end when they learned that Congress had restored money for a program that provides funding for small, rural hospitals with high numbers of Medicare patients or with low overall patient volumes.
They also learned a recurring lesson about treating patients in government-run programs such as Medicare and Medicaid -- getting paid involves a lot of give and take, with the government doing both the giving and taking.
While hospital administrators welcomed the restored funding, it came only after Congress had let the program expire in September. With no guarantee at the time that the money would be restored, administrators were scrambling to figure out how they would cover the loss.
"Imagine being in a business where they decide what they are going to pay, then they cut those revenues in the middle of the budget year," said Cindy Cowie, CEO at Southwest Regional Medical Center in Waynesburg, Greene County, where 83 percent of the patients are either Medicare or Medicaid beneficiaries. She likens the reimbursement process to "walking into a restaurant and telling them what I'm going to pay for a meal."
At Punxsutawney Area Hospital in Jefferson County, where about 80 percent of those treated are Medicare or Medicaid eligible, chief financial officer Jack Sisk said simply that those government programs "tell me what they're paying me, if they're paying me."
Southwest Regional is one of only two hospitals in the state -- the other is Warren General Hospital in Warren County -- to qualify for both the Medicare Dependent and Low Patient Volume adjustments. The restored funding means an extra $1.2 million annually. Punxsutawney hospital, which qualified for the Low Patient Volume adjustment, received an additional $400,000.
But there's a catch: Congress renewed funding for the Medicare Dependent Hospital program for only one year. Each of these hospitals could be facing the same budgetary uncertainty again this summer.
"It sure makes planning difficult when you don't know if it's going to be there or not," said Mr. Sisk. Because of that uncertainty, Punxsutawney is not bringing back a cardiac rehabilitation program it cut when the funding expired in September.
This episode of take away and give back comes at a time when all hospitals are facing reductions in reimbursements as state and federal officials are dealing with their own budget struggles.
Even more damaging than the temporary loss of the Medicare Dependent funding, noted Mrs. Cowie, has been the trend of insurers and government programs to classify more hospital services as "observations," which are reimbursed at about 25 percent of the rate for an admission -- even if a patient stays overnight.
Five years ago, for example, Southwest Regional was reimbursed for 222 admissions and 50 to 60 observations, Mrs. Cowie said. Their most recent figures showed 148 admissions and 155 observations.
While the $1.2 million in Medicare Dependent Hospital money represents a small percentage of the hospital's $44.5 million in annual revenue, "every penny counts in a small community hospital," she said.
Since 1990, the Medicare Dependent Hospital program has helped fund hospitals in remote regions with high volumes of Medicare patients. While the $400,000 Punxsutawney gets may be virtually insignificant to a large urban health system, it means quite a lot to the hospital, where an initiative for developing electronic medical records has left it with negative operating margins in recent years.
And that extra money is even more important to the communities they serve, said Mrs. Cowie.
One example of that showed up unexpectedly at Southwest Regional in October when a local woman, less than 30 weeks pregnant, went into labor and delivered in the emergency room. Without Southwest, which is the only acute care hospital in Greene County, her premature baby -- now a healthy 3-month-old -- might have been born en route to a hospital in Morgantown or Uniontown.
Because it does not have an obstetrics service, Southwest Regional does not deliver many babies. But it's not uncommon at all for nearby residents to show up after suffering a heart attack or stroke or some other condition where every minute of delayed treatment can mean permanent damage or death.
When a patient needs an emergency room, 35 minutes, the minimum time it would take a Waynesburg area resident to reach a hospital other than Southwest Regional, "is a long time," said Mrs. Cowie.
"What this hospital means to the community is that it provides that basic stabilizing care."
First Published January 20, 2013 12:00 am