The Balanced Budget Act of 1997 continues to affect The Memorial Hospital (TMH) in Craig. Numbers of Medicare patients continue to rise, but reimbursement payments are not keeping up with costs.
Medicare and the Balanced Budget Act are main reasons for the decline in current budget goals. TMH has a year-to-date net income of $136,184 which is positive, but TMH budgeted to have a year-to-date net income of $462,366, a difference of $326,182.
According to TMH Administrator Randy Phelps, TMH is not losing money and the budget shows the decrease due to Medicare deductions off the bottom line.
The Balanced Budget Act, according to Phelps, has a lot to do with this. As inflation grows, Medicare rates remain relatively steady.
"The Balanced Budget Act set the reimbursement increases and they were minimal," Phelps said. He also said there are between 700 and 800 hospitals in the nation in the same shape as TMH.
"This is an impact of the effects of the Balanced Budget Act of 1997 in terms of Medicare reimbursement," Phelps said. "We certainly need the support of everyone in the community for hospital reform action." By support, Phelps encourages people to send letters to U.S. representatives and senators expressing their feelings toward Medicare and the Balanced Budget Act.
Phelps and TMH have been trying to get the message heard in Washington by advocating the "real pain" the Balanced Budget Act of 1997 is causing. According to Phelps, Capitol Hill was flooded with about 2 million postcards stressing concerns of the current act and Third Congressional District Representative Scott McInnis, R-Colo., has been responsive to the needs of rural hospitals.
A major step in controlling the funds and maintaining the budget will be if TMH could become a critical access hospital (CAH).
If TMH applies and is accepted as a CAH, it would be a "10-fold improvement," according to Phelps. Based on the 1998 cost report, TMH has a potential of earning an extra $1.2 million per year. Regulations state all hospitals classified as CAH are exempt from some fees. For example, in the case of a Medicare patient suffering from pneumonia, if the hospital stay was in a non-CAH facility, Medicare would reimburse the hospital the same amount whether the patient had stayed one or 20 days in the hospital. In the case of CAH, Medicare payments would be received for each day the patient is in the hospital. In other words, fees would be paid just as regular insurance payments.
Hospitals with CAH status are 45 miles from another hospital (15 miles if in the mountains), have maximum patient stays of four days, a maximum of 15 inpatients each night and have an exemption from the outpatient perspective payment system.
Changes to the CAH system are currently on the House and Senate floors, having already passed through the Senate Finance Committee and the House Ways and Means Committee. The bill will become law once it passes through the House and Senate and is signed by the president.
"It's a double-hammer. We are blessed to be able to serve our Medicare patients but while that is rising, reimbursements are not going up as fast," Phelps said.