New, reduced Medi-Cal provider reimbursement rates could adversely affect patient treatment and even threaten the very existence of a local hospital district.
Like many critical access hospitals, Southern Inyo Healthcare District and its skilled nursing facility are in danger of closing if drastically-reduced Medi-Cal provider reimbursement rates are retroactively enforced effective January 2013, SIHD Chief Executive Officer/Chief Financial Officer Lee Barron said.
According to Barron, a new lawsuit is all that stands between the district, its Medi-Cal patients and their families, and the repayment of hundreds of thousands of dollars.
When AB97 was passed in 2011, it amended the 2011-12 state budget for the Department of Health Care Services, Medi-Cal’s administrator, and proposed the rate reductions, according to DHCS. California Hospital Association and other agencies immediately filed a lawsuit against DHCS resulting in an injunction which staved off the rate changes.
However, in January 2013, that injunction was overturned based on a DHCS report that states Medi-Cal rate changes would not limit access to care for patients; it cited statistics gathered in urban areas, Barron said.
The recently-released 2013-14 state budget, includes “severe Medi-Cal cuts to distinct-part, skilled-nursing facilities throughout the state,” Barron said. She explained that a distinct-part skilled nursing facility is part of a hospital, as opposed to a free-standing skilled nursing facility, such as Bishop Care Center.
A new lawsuit was filed against DHCS on Jan. 28, in hopes of reversing the reductions. If that suit fails, Medi-Cal provider reimbursement rates will be rolled back to 2008-09 rates – less than 10 percent, Barron said. Medi-Cal has been paying providers about $266 per patient per day; the new rate will be $182, effective as early as March, she explained. That “amounts to a 46 percent decrease” in distinct-part skilled nursing facility income, which “will have a devastating affect on our facility.”
Since 33 of SIHD’s 37 licensed beds are in a distinct-part skilled nursing facility and more than 90 percent of those patients are primarily insured through Medi-Cal, the cuts amount to an annual loss of about $900,000 – 11.5 percent of SIHD’s total operating revenue, Barron said.
“We cannot absorb this loss … let alone pay back the retroactive collection of reimbursement.”
Furthermore, the retroactive Medi-Cal provider reimbursement collection total, accrued between June 1, 2011 and Jan. 31, 2013, is $1,426,404. “It will not only cause us to close our skilled nursing facility, it would also cause the demise of our entire district,” Barron said.
Paybacks could become due as early as March or April of this year, she added. It is unknown whether DHCS will expect lump sum payment, accept installments or apply penalties or interest.
California Medical Association President Dr. Paul Phinney is in agreement with Barron’s dire prognosis. “The state is in much better fiscal shape now” than in 2011 “and with millions of new Medi-Cal patients entering the program under the Affordable Care Act,” he said. “We simply cannot continue to cut resources and expect successful implementation of health reform in California.”
Barron said that most patients in distinct-part skilled nursing facilities suffer from congestive heart failure, diabetes, MS, dementia, Alzheimer’s, traumatic brain injury and other illnesses that require 24-hour skilled nursing services, given under the direction of a physician.
SIHD has a “huge responsibility” to give Medi-Cal patients and their families the “highest quality of compassionate care close to home,” Barron said. Closing the skilled nursing facility means relocating patients to urban areas, saddling families with long-distance travel costs.
“It is well-documented” that such relocations cut life-expectancy by 30 percent and increase “horrific loneliness, and sadness” in patients and family members, Barron said. “A high percentage will die within the first six months.”
Steps are being taken to prevent these statistics from being realized and to keep entities like SIHD and the skilled nursing facility from going under. The California Hospital Association and other agencies are pursuing options to mitigate Medi-Cal reductions.
Barron listed those options: request that the 9th Circuit Court hear both sides of the case, “not just the members that opined to uphold the reductions;” appeal to the US Supreme Court; ask DHCS “to allow no action pending resolution of the legal proceedings;” and develop “legislation to halt the reductions to negatively-impacted communities and facilities.
In the meantime, SIHD is “working closely” with California Hospital Association and other agencies on a “grassroots advocacy effort” to educate legislative representatives and the DHCS, Barron said. Many are on the bandwagon. Seventeen of the 33 critical access hospitals in California have skilled nursing facilities which “will be impacted severely by the cuts … (We will) continue to apply pressure through letters written by our community members,” Barron said. Though there is no “definitive” progress so far, DHCS is receiving the letters and “appears to have a better understanding of the impact the cuts will have on us.”
Barron urges the public to help by writing 26th District Assemblywoman Connie Conway, 18th District Senator Jean Fuller, Governor Jerry Brown, DHCS Director Toby Douglas, DHCS Secretary Diana Dooley. (Douglas and Dooley can be reached at P.O. Box 997413, Sacramento, CA 95889-7413; see pg. 5 more additional contact information.)
“This is about real people in our community who have worked hard all of their lives … our grandparents, our parents, our sisters and brothers, our family. They do not deserve to be treated as a statistic,” Barron said.
For more information, call Barron at (760) 876-2225.