(05/04/2012)
Critical times are facing Minnie Hamilton Health System if changes in reimbursement for services stands.

Minnie Hamilton Health System is requesting the Centers for Medicare & Medicaid Services (CMS) to reevaluate a change it made to its longstanding policy of considering state provider taxes as allowable costs fully reimbursable by the Medicare program.

This new interpretation impacts all cost-based reimbursed hospitals and providers across the country, including the 18 Critical Access Hospitals (CAHs) in West Virginia, of which Minnie Hamilton Health System is classified.

"We have grave concerns that this payment reduction policy coming down from the federal government will have a significant impact on Minnie Hamilton Health System, and all CAHs in West Virginia," said Steve Whited, CEO, (pictured left).

The Critical Access Hospital (CAH) Program is a federal program established in 1997 through the Balanced Budget Act for the purpose of recognizing small, rural hospitals as essential providers of care to rural populations.

The program aims to ensure access to quality healthcare in more remote settings through hospital payments based on actual incurred costs.

Critical Access Hospitals must be more than a 35-mile drive (15 miles in the case of mountainous terrain or where only secondary roads are available).

Critical Access Hospitals can operate no more than 25 inpatient beds and must offer 24-hour emergency services.

"The annual impact of this dis-allowance could exceed $200,000 in lost reimbursement to Minnie Hamilton Health System and more than $5.5 million annually to all CAHs in West Virginia. This dis-allowance is expected to be applied to multiple years going back to 2009," Whited said.

Historically, Medicare has interpreted that the provider taxes are an allowable cost, and CAHs have claimed the provider tax paid to the State as a cost to be reimbursed by Medicare.

"Following extensive review of the issue, Minnie Hamilton Health System believes this change in interpretation will have a devastating effect by essentially penalizing us for our contributions toward funding the state Medicaid program," said Whited.

West Virginia implemented a provider tax in 1993 in order to support Medicaid funding for health services in the state.

"We are very concerned that reductions in federal Medicare payments to Minnie Hamilton Health System as a result of this policy, will severely impact our ability to be the main source of care in the community," said Whited.

"When you're a small hospital such as Minnie Hamilton Health System that has such limited cash flow you don't have a lot of ability to absorb the kinds of cuts resulting from this policy."

"Because the patient population cared for in West Virginia's 18 CAHs is up to 70 percent Medicare and Medicaid and many others are poor and uninsured, most West Virginia CAHs already lose money on patient care services, much the same way as other hospitals across the State."

"This new interpretation has the potential to close some of our CAH facilities across West Virginia, or at a minimum, diminish patient access to essential healthcare in the most rural areas of our state," Whited said.

The American Hospital Association (AHA), along with the West Virginia Hospital Association (WVHA), continues to express concern over the new policy interpretation and is working with the State's Congressional Delegation to persuade CMS to resume its previous interpretation that provider taxes are an allowable cost, or at least to implement its new interpretation prospectively so that hospitals can make adjustments going forward.

Along with this action, advocacy is centered on passage of the Rural Hospital Protection Act, federal legislation that would ensure that CAHs continue to be reimbursed for provider taxes they pay to states. The Act (H.R. 1398), has been introduced and among its sponsors is Representative Shelley Moore Capito (R-WV).

"At the end of the day, we believe the hospital tax meets the statutory and regulatory requirement as an allowable cost and disallowing this cost will result in significant financial hardships for Minnie Hamilton Health System," said Whited.

"This in turn may cause a reduction in services, lack of capital for upgrades or new technology and in some severe cases, the closing of hospital doors."

"Our community must ban together and contact their Congressional Delegation and emphasize the importance of the Medicare program and reimbursing hospitals for their costs; tell them how much of their costs these taxes represent, and urge them to support the passage of the Rural Hospital Protection Act." Whited concluded.


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