After months of fighting and negotiating with the state, Eastern Plumas Health Care announced Aug. 15 that it would be exempted from the 23 percent Medi-Cal reimbursement cuts, which were scheduled to take effect in September.
“It’s just fantastic. I feel like we’ve really accomplished something,” said hospital CEO Tom Hayes.
As a result of the exemption, the hospital announced both the Loyalton and Portola facilities will be taking new skilled nursing residents again.
A hospital in need
In January, the hospital learned that the state’s Department of Health Care Services would be implementing drastic cuts to Medi-Cal reimbursements, and demanding a retroactive payment dating back to June 2011.
The facility found itself fighting for its life.
The hospital, with an average yearly income of $439,950,was going to have to figure out how to account for the $1.3 million yearly loss in Medi-Cal funds, and pay back $2.4 million worth of previous reimbursements to the state.
Because 91 percent of Eastern Plumas Health Care’s skilled nursing patients rely on Medi-Cal, the cuts would render many elderly patients helpless because the hospital would not have the funds to support them.
However, the vast majority of the hospital’s in-patient population is served through the skilled nursing facilities. Without them, the hospital might not have been able to stay open at all.
Seeing the detrimental situation unfolding before them, Hayes, and EPHC Public Relations Coordinator Linda Satchwell, took matters into their own hands.
Though Hayes met with legislators and government officials, and even constructed an assembly bill to combat the cuts, it wasn’t until March that hope sprang for the hospital.
Hayes sent an email to Diana Dooley, the secretary of health and human services, who would be implementing the cuts, and described the hospital’s dire circumstances.
He received an email back from John Mendoza, the acting chief of the Fee For Service Division of the Department of Health Care Services, asking Hayes if he could help.
When Mendoza offered the hospital his help, Satchwell and Hayes sat down with him and discussed the inaccuracies in an access study implemented by the Department of Health Care Services.
When the cuts were approved at the state level in June 2011, the department conducted a health care access study to verify that the cuts would not affect any person’s access to local health care.
Satchwell ardently studied the analysis and concluded it was flawed.
According to Satchwell, the study classified only two types of counties in California: urban or rural. The study also determined that like counties could be classified as local.
For EPHC, this meant that because Plumas County was like Ventura County, by definition, the patients had plenty of health care access, even if it was 500 miles away.
Searching for an answer, Satchwell discovered another study done by the Federal Center for Medicare/Medicaid Services, which oversees all Medi-Cal reimbursements. That study revealed the “frontier” county classification, which is assigned to remote and sparsely populated rural areas.
Satchwell reported these facts to Mendoza, and she said he was astonished and “really took note” when she mentioned the county’s frontier status.
At Mendoza’s request, Hayes and Satchwell sent him all the information they had compiled. He also said it would be possible for his department to write a state plan amendment, exempting the hospital from the cuts.
Upon his instruction, the hospital wrote up a formal request for an exemption, and since April, hospital staff has been waiting to hear from the department.
Late last Wednesday, Hayes received an email from Mendoza with the news. The email contained a link to an article that provided the department’s decision to exempt all rural and frontier classified distinct part hospitals from the Medi-Cal cuts.
Though the hospital will still have to pay back the retroactive cuts, Satchwell reported it has 10 to 20 years to pay it back, and it is still in negotiation with Mendoza and his department.
“EPHC did what all of the bills, legislators and large state organizations were unable to do,” said Satchwell. “Our little hospital never gave up, and we stopped the cuts for the most vulnerable and needy hospitals.
“Our hospital and our community can be very proud of what we have done here,” Satchwell continued. “It shows what a small hospital and community, working tirelessly and refusing to give up, can do against seemingly impossible odds. We have won!”
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