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01-28-05 Hospital CEO heads down familiar path

By Timothy Cox

  Changing the current Medicare reimbursement status of Mercer County Community Hospital and bolstering the hospital's financial bottom line to enhance services is a path Mercer Health CEO Terrence J. Padden has traveled before.

  As his final official act at his last job in Nebraska a year ago, Padden signed the paperwork to finalize Box Butte General Hospital's new status as a critical access hospital. Today, that hospital has a $1.2 million increase in revenue and has broken ground on an expansion project.
  The critical access program is a relatively new Medicare reimbursement program aimed at keeping small, rural hospitals financially afloat. Padden has been discussing the issue with Mercer Health board members, management and staff for the past several months. Mercer Health officials now plan to solicit support for the idea.
  Mercer Health officials say the hospital would have improved last year's bottom line by $2.8 million if it had critical access status.
  "Now it's time to educate the community, our owners," Padden said. "You don't make a significant change without talking to the community."  Critical access status almost certainly would allow Mercer Health to expand its current array of services. A small version of the existing hospital built near Celina has been floated as a possible enhancement of services.
  An additional hospital might be necessary to help the organization qualify for critical access status. The existing hospital has too many beds to meet program criteria, the only gray area involving the hospital's qualifications for critical access status.
  Smaller, rural hospitals, especially those that exceed 60 percent of its patients covered by Medicare or Medicaid, are the main beneficiaries of the program. The federal reimbursement rates for Medicare and Medicaid simply are not high enough to allow small hospitals to survive if those patients make up a majority of a hospital's customers, Padden said.
  About 60 of the 70 hospitals in his former state of Nebraska have attained critical access status, Padden said. About 90 percent of those have launched building and service expansions, he said.
  "One of the biggest fears about this is a perceived reduction in programs and services," Padden said. "What it actually does is allow us to expand programs and services."
  The closest federally designated critical access hospitals in this area are in Portland, Ind., and in Paulding.
  The application process to gain critical access status takes up to four months or so, Padden said. Local officials also are under time pressure to make a decision.  
  "The loophole that allows us to apply closes if we do not become critical access by 2005," Padden said.
  Initial overtures to the Ohio Department of Health about seeking critical access status for the hospital were" warmly received," Padden said.
  "We were actively encouraged to pursue the designation," Padden said.
  Board members plan to gain community feedback on the issue before deciding whether to proceed with the plan.


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