PENINSULA DAILY NEWS
TUESDAY, DECEMBER 25, 2012
OMC chief discusses Medicare cuts BY JOE SMILLIE FOR PENINSULA DAILY NEWS
PORT ANGELES â€” With Medicare paying for 57 percent of Olympic Medical Centerâ€™s patients, cuts could â€œdevastate the health care delivery systemâ€? of OMC, Chief Executive Officer Eric Lewis told hospital commissioners last week. Congress has until Dec. 31 to avoid deep cuts to Medicare and many other federal programs laid Lewis out in the Budget Control Act of 2011, the deal reached by Republicans and Democrats after last summerâ€™s debt limit debate. If the two sides canâ€™t reach a deal before the end of the year, OMC â€” which is based in Port Angeles and operates a complex in Sequim â€” could lose more than $1 million in Medicare payments. Lewis told the commissioners at their board meeting last week that Sequim and Port Angeles have about 16,000 residents who receive Medicare. â€œThe majority of our patients are covered by Medicare,â€? he said, â€œso anytime they [government officials] touch it, it has an enormous ripple for us.â€? The cuts put together as part of last yearâ€™s debt limit deal would slice reimburse-
ments from Medicare to physicians by 26.5 percent, Lewis said. Lewis expected that physician payment cuts would be restored by Congress in the new year but worried that cuts in Medicare reimbursements to the hospital would be used to cover the expense. â€œDo you want your right arm cut off or your left arm?â€? Lewis asked rhetorically.
Budget built for worst OMCâ€™s board of commissioners built its $139 million 2013 budget with the expectation that the automatic 2 percent cut to Medicare payments would take place Jan. 1. Lewis said the cut is expected to cost OMC $100,000 every month, or $1.2 million for the year. If the funding is restored next year, the hospital likely will use it to plug programs it cut to balance the 2013 spending plan, Lewis said. An additional $200,000 to $400,000 in annual funding could go away with the elimination of â€œhold harmlessâ€? payments that fill gaps in funding the hospital receives from Medicare for outpatient services, he added. To counter, Lewis said, the hospital is lobbying the stateâ€™s two U.S. senators, Patty Murray and Maria Cantwell, both Democrats. â€œTheyâ€™ve received literally hundreds of letters from us,â€? he told commissioners. Lewis said the hospital
PENINSULA DAILY NEWS
Olympic Medical Center â€” its hospital and facilities â€” could lose $1 million. also is lobbying state legislators to protect the funding it receives from Olympia. Most of the hospitalâ€™s state funding comes from Medicaid, which is funded 50-50 by the state and federal governments. With the stateâ€™s budget still tight, funding for sole community hospitals, a classification of which OMC is one of just four in the state, may be on the table, Lewis said. Sole community hospitals are those that serve a population that does not have another hospital within at least 35 miles that offers similar services. A contingent of OMC officials met with 24th District state Reps. Kevin Van De Wege and Steve Tharinger,
both D-Sequim, to ask them to stress the importance of state funding to the hospital when the Legislature convenes Jan. 10.
Watching the situation â€œI donâ€™t foresee them having a problem with the funding they receive. Funding for these sole hospitals is not usually a target,â€? Van De Wege said Thursday. â€œBut itâ€™s something we are going to keep our eyes on to make sure it doesnâ€™t become one.â€? Tharinger, a member of the stateHouseâ€™s Health Care and Wellness Committee, said OMCâ€™s classification as a sole community hospital puts it in a tricky funding spot â€” too big to receive
urban hospital funding and too small to get rural funding help. â€œMy view is weâ€™re underfunding these sole community hospitals. Weâ€™ve got to find a way to make the pie bigger,â€? Tharinger said. â€œThere may be something we can do to improve the hospitalâ€™s reimbursement rates because of the importance of OMC to the health care system of the North Olympic Peninsula.â€? Lewis said he plans to meet with state Sen. Jim Hargrove, D-Hoquiam â€” also of the local 24th District â€” before the Legislature convenes Jan. 10. The 24th District covers Clallam and Jefferson counties and part of Grays Harbor County.
As it prepares to implement the $7.6 million Epic computerized records system, OMC is upgrading other equipment to match the system. Epic was purchased earlier this year to give the hospital a system to maintain health records electronically. It is scheduled to go into action May 4. Also last week, commissioners unanimously gave Chief Nursing Officer Lorraine Wall the authority to finalize the purchase of a new program and equipment that will track how pharmaceuticals are dispensed to patients. Wall said the Pyxis equipment will provide a muchneeded upgrade to the hospitalâ€™s pharmacy records and will have a digital â€œinterfaceâ€? with the Epic system. The cost of the purchase was $667,940, with a monthly maintenance fee of $2,768. Wall said the hospital budgeted $819,875 for the purchase. The hospital in September purchased $1.5 million worth of hardware to accommodate the system. In other action, commissioners also approved a salary increase for gastroenterologist Frank Jahns. Rebecca Corley, the hospitalâ€™s chief physician officer, said raising Jahnâ€™s salary to $375,000 would bring his pay into the 25th percentile of gastroenterologists with his level of experience.
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Published on Dec 25, 2012