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Thursday, June 26th, 2014

D.C. may boost hospital budget

By Doug Drexler
COLDWATER - The reaction by Congress to an ongoing Veterans Administration scandal and implementation of the Affordable Care Act may boost Mercer Health's profits, chief financial officer George Boyles told members of the hospital's board of governors Wednesday.
One of the proposed changes may allow local veterans to seek medical care from area hospitals and physicians instead of driving to the VA facility in Dayton.
The U.S. House and Senate have each approved pending bills allowing the VA to offer veterans care at civilian hospitals, Boyles said.
Senate Bill 3230 permits eligible veterans to get care at a non-VA hospital if they can't get an appointment within 14 days or they live more than 40 miles from a VA hospital, he said. It also allows for rates to be negotiated but not exceed Medicare rates.
House Bill 4810 allows local reimbursement at the highest rate allowed by the VA, the military's Tricare system, or Medicare, he said.
Mercer County veterans live more than 40 miles from the Dayton VA hospital, so the proposed change would include care at the Coldwater hospital, Boyles said.
"We're all about helping the patients," he said.
The hospital already provides some VA-paid care, but it is limited and usually must be pre-approved through a complicated process, Mercer Health Chief Executive Officer Lisa Klenke said.
Congress must still reconcile the differences in the two bills, Boyles said.
The county has 2,839 veterans but not all qualify for VA care, which is based on income levels, said Tom Risch of Mercer County Veterans Services. It's also unclear which veterans would qualify since Lima has a VA outpatient clinic. Parts of Mercer County would be within 40 miles of that facility and some would not, he said.   
The agency transports about 70 veterans a month to Dayton or Lima. He said he will need to see the final guidelines before determining the proposal's effect.
"It could impact Mercer County, to what extent is very hard to predict," he said.
Some veterans may also choose to continue going to VA facilities to stay with doctors with whom they are familiar, he said. He also fears the bills will cause more problems if they are rushed through in response to the stories about problems at specific VA facilities.
The American Hospital Association is working with the VA to ensure veterans have access to care, Boyles said. The AHA supports the House payment plan, prompt VA payments and a hospital's choice to contract directly with the VA.
Boyle also told board members about the national enrollment rates under the ACA, also known as Obamacare. More than 8 million people signed up through the healthcare.gov website, he said, and 4.8 million people obtained coverage under Medicaid expansion and Medicaid's Children's Health Insurance Program.
Hospitals receive a 50 percent reimbursement through Medicaid. Boyles said many of the people signing up for Obamacare insurance would have previously been dubbed "charity cases" - which means the hospital would not get paid for services. Under the new government plan, the hospital is more likely to collect at least a partial payment, he said.
Twenty percent of Americans who signed up for Obamacare selected the less expensive bronze level plan, which pays 60 percent of medical expenses with a $6,000 family deductible, Boyles said. Sixty-five percent chose the silver plan, which pays 70 percent of expenses; 9 percent purchased the gold plan, which pays 80 percent; and 4 percent chose platinum with a 90 percent payment option.
Although the bronze and silver plans carry higher deductibles, Klenke said the increased number of insured people should cut the hospital's bad debt level.
Boyles also noted the hospital is off to a steady financial start this year with a $77,000 operating profit in May, and $176,000 for the fiscal year, which began in April. Those number are above the $31,000 and $110,000 budgeted, but trail well behind 2013's margins of $480,000 and $713,000 for the same time frame, he said.
Boyles said last year's posted profits were an aberration. The hospital provided 257 surgeries the first two months of fiscal year 2013 compared to 200 this year, and 38 births versus 31.
The hospital has given $300,000 more in contracted discounts to insurers and government programs than last year, which accounts for most of the profit decline.
Klenke blamed the mix of patients' methods of payment; more are using insurers who get bigger discounts, she said.
He noted total gross patient revenue fell from $15.7 million last year to $15.508 million this year, but was within $60,000 of his projection of $15.568 million for the year to date.
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