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Proposed MediCal cuts may push hospitals to the brink and displace seniors

M. Kate West
Chester Editor

The stagnant housing economy, which has resulted in reassessed home values throughout Plumas County and lower property tax revenue, is financially distressing at the very least to struggling district hospitals.

Compounded with the proposed reduction in MediCal reimbursements for patient care, specifically those in distinct part skilled nursing facilities, this could be construed as a formula for failure.

Efforts to defeat the cuts are under way on several different fronts.

The Chico Rural Health Care Legislative Caucus met with 4th District California state Sen. Doug LaMalfa Nov. 30.

Seneca Healthcare District Chief Executive Officer Doug Self attended the meeting. He said he was joined by other CEOs of distinct part SNFs, a pharmacist representing California pharmacies, representatives from various North State health care clinics and the chief operating officer of a federally qualified health care center in Redding.

“The purpose of the meeting was to provide feedback to the rural caucus about the ramifications the cuts would produce,” Self said.

He said a very common theme voiced at the meeting is that the state is in a very difficult financial position and is looking at cuts in almost every program government-wide.

“All of the cuts at this point are difficult and I believe the legislators are just trying to make their way the best that they can.

“I also believe Sen. LaMalfa’s purpose there was to listen to our feedback on how proposed cuts would affect the different programs of the represented entities,” Self said.

He said LaMalfa was looking to learn if the cuts would be detrimental to the programs, and was looking to organizations to provide hard data on how the cuts would affect those programs.

“Sen. LaMalfa was looking for hard, objective feedback to take back to the Legislature rather than folks just talking about hardships,” Self said. “He needs to be armed with data about the effect to hospitals and long-term care facilities and the residents associated with those.”


The fight is on

Self continued his efforts during a teleconference call to California Hospital Association (CHA) in Sacramento Dec. 7.

He said nothing new surfaced during the four-hour call.

“We have given our feedback to the CHA, which filed a Nov. 21 preliminary injunction prohibiting the Department of Health Care Services from implementing reductions to MediCal reimbursement for distinct-part skilled nursing facilities within acute care hospitals,” he said.

The court will hear the motion Dec. 19.

“There is tremendous uncertainty in the CHA, feedback is neither positive or negative about the outcome of the motion,” Self said.

He said if the reduction is not blocked in the courts the cuts would take place immediately and would be retroactive to July 1, the beginning of the fiscal year for the health care district.

The hit to the district could be seen as soon as the December MediCal billings are turned in to the state.

“We would see the rate cut effective from July 1 going forward. We would see January rates cut and for the period of time between July and December … we would, under the reduction, owe the state a refund in the amount of $203,000,” Self said.

All MediCal payments to the district would be stopped until the state was repaid.

“It’s called ‘withhold’ and it is a common practice by MediCal and Medicare. They withhold all billing dollars due until the back balance is paid,” he said.


District options

Self said there are no options on the board at this time to overcome the possible loss of district income. He also said no discussions have been held with the Seneca board of trustees.

He did say that when discussion begins there are two obvious options open to the district.

“The way it stands with the loss/cut, it would wipe out any excess cash flow the district might have for capital improvements, maintenance and emergencies such as a lack of passage of the state budget, which would result in no funds to district,” Self said.

He said any discussion would have to come back to the position of having some cash flow.

“We could maintain the service and find other cuts we could make to the district or we could discontinue the service, which is a discussion many hospitals are having all over the state, a discussion like we have seen in Eastern Plumas about Loyalton.

“Not all skilled nursing facilities (SNF) are the same or provide the same level of care. A lot of the free-standing SNFs do provide a lesser level of care then distinct part facilities. If distinct part facilities close there will be less beds providing a higher acuity (level) of care,” he said.

The 2009-10 audit results have revealed that Seneca Healthcare District is in a financially strong position.

“Because of cash we have on hand we will be allowed to make a rational and sound decision as opposed to an immediate reaction to a cash shortage crisis,” Self said.


Distinct part facilities

“Distinct part skilled nursing facility means the facility is physically attached to hospital but (is) not licensed as part of the hospital. The facility has its own billing number for MediCal, separate from that of the hospital,” Self explained.

He said while physically attached they are not legally attached to hospital.

“Attached or not attached, hospitals can run a free-standing facility, such as is done in Loyalton,” he added.

Self said that in addition to Loyalton, Eastern Plumas Health Care also has a distinct part SNF facility that is attached like the one at Seneca.


How you can help

“I would personally like to ask readers to contact our area senator about our long-term care facility. Your call will only take two minutes and I have heard from the California State Hospital Association that your calls do matter,” Self said.

He said it’s standard procedure that when you call the office of an elected official you will get an assistant.

“They will ask you what your topic is and what is your concern.

“If they don’t get any calls on a specific topic the Legislature can only assume the proposed legislative action is OK,” Self said.

He suggests concerned community members call Sen. Ted Gaines. The telephone number to his capitol office is (916) 651-4001. The number for his district office is (916) 783-8232.

“Call Sen. Ted Gaines and tell his staff you oppose the MediCal cuts to distinct part skilled nursing facilities,” said Self.

He also recommended contacting Congressman Tom McClintock, 4th District. McClintock’s Roseville office telephone number is (916) 786-5560. His Washington, D.C., office number is (202) 225-2511.

“Our community can be part of the fight to save our local long-term facility and hospital district,” Self said.

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