MediCal cuts threatens EPHC with closure
Eastern Plumas Health Care is facing an emergency. But there is no ambulance or team of doctors that can fix this deep cut; it’s all up to California legislation.
In the next 30 to 60 days, the California Department of Health Care Services will be implementing a 25 percent cut to MediCal reimbursements to California hospitals.
Not only will DHCS be lowering the reimbursement rates back to the same rates of 2008, it will also be demanding retroactive payment dating back to June 2011.
Because of these cuts, EPHC said it would lose $1.3 million in reimbursements within the next fiscal year. The hospital also will have to pay the state $2.4 million it has received in reimbursements since 2011. That’s because Gov. Jerry Brown originally proposed the reductions to MediCal provider payment rates in June of that year.
DHCS has the right to collect this entire amount at any time. According to Eastern Plumas Health Care CEO Tom Hayes, that could put EPHC, with an average annual income of $439,950, out of business.
“If DHCS requires us to pay this amount, it would not only cause us to close our skilled nursing facilities, it would cause the demise of the entire organization,” Hayes said. Along with other MediCal health care providers, this proposition directly targets cuts to distinct part skilled nursing facilities.
This means any hospital in California that has a skilled nursing facility attached to the acute care/emergency room will suffer the cuts. According to EPHC Public Relations Coordinator Linda Satchwell, that means 88 California hospitals will be affected.
In anticipation of these cuts EPHC has already downsized its SNF department from a 66-bed occupancy to 46 within the last year. However, with the execution of the cuts, EPHC reported that all of the occupants would have to leave the facility.
The cuts do not just impact the SNF units. The MediCal cuts paint a bigger picture of detrimental effects for the California Medical Association, the California Dental Association, the California Hospital Association and many more state medical organizations.
Eight of these groups, including EPHC, have joined to file a lawsuit against DHCS because of the proposed implementation of these cuts.
“The lawsuit is bigger than skilled nursing facilities,” said Satchwell. “But EPHC is more interested in the SNF and the hospitals that are most vulnerable.”
In a press conference held by the plaintiffs of the lawsuit, at which representatives from some of the top newspapers in California were present, Hayes spoke for the many rural hospitals threatened by the proposition.
“Our hospital is the only provider of hospital services within a 50-mile radius,” Hayes said. “We are the only provider of MediCal services and 91 percent of our skilled nursing residents are on MediCal. If these cuts are allowed to stand the hospital will close. Patients will have to be uprooted, and to force them to move would be heartbreaking.”
The reason these cuts have been delayed since 2011 is because Federal District Judge Christian Snyder ruled in February 2012 that California’s fiscal crisis does not outweigh the irreparable injury the plaintiffs would suffer if there were no injunction.
However, the case then made its way to the Ninth Circuit Court in Los Angeles where three judges ruled last month the injunction would not stand, and the proposed cuts would take place in March or April 2013.
On Jan. 28, EPHC, along with the other plaintiffs, filed a request for a rehearing of the case by the full Ninth Circuit Court and not just the three judges.
“We have a month to change minds in a big way,” said Satchwell.
Working to change minds
CEO Tom Hayes is fighting to bring the issue to light and enlisting the help of government officials. He has also teamed up with the 16 other rural, isolated hospitals in the state that would suffer tremendously after the implementation of the cuts.
“The legislators don’t understand what they did a few years ago by passing these cuts,” Hayes said.
Along with asking for help from Plumas County Supervisor Jon Kennedy and Sierra County Supervisor Tom Dotta, EPHC has started a petition to send to DHCS on behalf of the most vulnerable hospitals.
On Jan. 31, Hayes, Kennedy and Loyalton Mayor Brooks Mitchell went to Sacramento along with Matthew Rees, the CEO of Mayers Memorial Hospital in Shasta County, to meet with state legislators.
They had a chance to speak to the chiefs of staff for Sen. Ted Gaines, of District 1 and representative of Plumas County, and Sen. Jim Nielson, the District 4 representative of Shasta County.
Hayes said he wanted to make sure Gaines understood what the problem is, and that five to six of the at-risk hospitals are in his district. He also said he asked Gaines to try to get DHCS to exempt such hospitals from the cuts, or ask them to give the at-risk hospitals significant time to pay them.
“(The chiefs of staff) were sympathetic. But their main point was that they have hardly any pull in the senate because it is a Democratic majority,” said Hayes. “We encouraged them to try to reach across the aisle, as this is not a partisan issue.”
Hayes said his next step is to contact other Democratic senators and assemblymen, even though they don’t represent Plumas or Sierra counties. He said he hopes he can urge them to talk to DHCS, as these cuts will harm hospitals in their districts as well.
Hayes said wants to meet with Toby Douglas, the director of DHCS, as well as California Health and Human Services Agency Secretary Diana Dooley. Hayes will ask that the most vulnerable hospitals either be exempt from the cuts, or that they be offered a payment plan that extends for at least four or five years.
What this means for the community
If EPHC is not exempt from the cuts, or is not offered an extended period of time to pay back the state, the hospital’s existence will be in jeopardy.
“We’ll absolutely close Loyalton. And Portola will no longer take MediCal patients,” Hayes said. “We might be able to find two beds in the Quincy SNF, but the rest of our patients would be forced to move.”
The state’s solution to the problem was offering the patients the option of moving as far as Los Angeles, where there is a 1,000 bed opening for the convenience of the elderly.
“I don’t think the state has an appreciation at all for patient care,” Hayes said. “If they did they wouldn’t suggest transferring patients down to LA or San Francisco. There is no appreciation for the kind of impact that is going to have for patients or patients’ families.”
Many of the residents currently at the skilled nursing facility have lived here most of their lives. If they are transferred, they could suffer from transfer trauma.
Statistics show that 30 percent of patients relocated this way die shortly after the move. The emotional trauma will increase when families of residents will not be able to visit often, or at all, due to financial obstacles and time constraints.
The cuts also pose threats to the county at large. EPHC is the largest employer in Eastern Plumas County, providing more than 250 well-paying jobs for residents.
The loss of these jobs could create a ripple effect on the local economy.
Also, statistic show that 19.5 percent of Plumas and Sierra county residents are over 65. Most of this population depends on EPHC’s emergency services, as it is the only provider of such services in Eastern Plumas and Sierra counties. Without such services, this population may leave the area.
According to Supervisor Kennedy, most of the tourist influx, on which Eastern Plumas County relies, would dry up. As this area draws in visitors because of recreational possibilities, many of the visitors also rely on the quick response of emergency services.
“If these MediCal cuts go through it could very well be the beginning to the end of Plumas County and dozens of other rural communities,” Kennedy said.
What we can do
Hayes said he wants to encourage residents to write Assemblyman Brian Dahle, Sen. Gaines, DHCS and the governor to protest the cuts. There is a list of contact information on the hospital’s website, ephc.org.
EPHC is orchestrating a petition, along with other hospitals, urging legislators to reverse the cuts. Information on how to sign and share the petition will be on the website as well.
“We have been doing really good. The staff has done an excellent job at providing good service to the community,” said Hayes. “All of the sudden, having something like this happen takes the wind out of your sails. We need to fight for this hospital.”