to help relocate LTC patients
Due to changes in reimbursement systems for hospitals, St. Mary’s Hospital in Cottonwood will no longer be providing long term care services at their facility. At their October 2005 meeting, the SMH Board of Directors made the decision to phase out their 10 long term care beds. Public announcements were made at that time. Nearly three years later, at its August 2008 meeting, the decision was made to phase out the remaining four beds.
“It was an extremely hard decision because we know families in this area depend on our hospital and we understand how difficult it can be to move an ageing relative. We did not make that decision without a lot of discussion and thought,” said Gordon Harman, president, SMH Board of Directors. “For years we’ve been tracking the cost to St. Mary’s to provide long term care services and we felt we could no longer absorb the annual loss of an estimated $383,000 to retain those services.”
The Medicare reimbursement methodology, in effect, punishes the critical access hospital financially for providing non-traditional hospital services such as nursing home care, assisted living and other related service lines, said Ralph J. Llewellyn, CPA, CHFP, Partner, Eide Bailly LLP. Eide Bailly provides Medicare consulting services to SMH and other hospitals and health care facilities.
According to Michael Hedrix, vice president, Essentia Community Hospitals and Clinics (ECHC), nursing homes across the nation are being challenged by a number of factors that test their ability to offer residents a high quality of life and continue to meet their financial obligations. “The Benedictine Health System, prior to its reorganization, faced this issue several times, making the tough decision to close three care centers in Minnesota. With each, BHS worked closely with the families to relocate their residents to facilities of their choice and did every thing within their power to make a smooth transition,” Hedrix said. “I know from attending the SMH board meetings that the local board members regularly reviewed the financial situation and the impact it would have on their residents.” SMH is a member of ECHC, formerly the Benedictine Health System.
The American Health Care Association, a national long term care trade association, reports that nursing homes across the nation are under funded by $4.5 billion annually. An annual study reported that nursing homes receive an average of $13.15 less than the cost of care for every day of care provided to a Medicaid patient resulting in a shortfall of $4.4 billion nationwide.
“Unfortunately that gap exists whether the patient is private pay or Medicaid,” said Casey Meza, CEO, SMH. “The mission of our hospital and clinics is to provide health care services to the communities we serve and we take that very seriously. Sometimes we have to make difficult decisions with the greater good in mind. Continuing to absorb the loss of over $350,000 each year seriously impedes our ability to provide charity care, serve our Medicare patients or purchase equipment necessary to provide the highest quality of care to the 25,000 people in our service area.”
Meza said the SMH staff is working with the families to find placement for the four remaining residents. “We understand the disruption in the lives of these four people who’ve we cared for over the years. However, our staff is dedicated to helping in every way possible to smooth that transition.”