Portola hospital could face closure over Medi-Cal reimbursement reductions

02/27/2013 12:00 AM

02/27/2013 7:53 AM

PORTOLA – Within the next few weeks – even days – the hospital that has been saving lives in this rural Plumas County community since 1910 may itself face mortality.

Eastern Plumas Health Care is confronting a combination of reductions in its Medi-Cal reimbursements that amount to as much as 25 percent of the total, said Tom Hayes, administrator of the 75-bed hospital.

In addition to a $1.3 million annual cut to the federal Medicaid program, called Medi-Cal in California, the state Department of Health Care Services is demanding a $2.4 million repayment of funds already issued retroactive to 2011.

The actions threaten the viability of the facility, Hayes said.

"If the California Department of Health Care Services requires us to pay this amount, it will be the demise of not only our skilled nursing facility but the entire organization," he said.

The Medi-Cal cuts, which will affect 88 hospitals in California, are a result of legislation passed in 2011 designed to save the state $330 million a year. Signed by Gov. Jerry Brown, AB 97 trims more than 10 percent from the state's Medi-Cal program costs.

The program serves more than 7 million low-income residents, most of them elderly.

The California Hospital Association, along with Eastern Plumas and several other rural hospitals, stalled the cuts in 2011 by filing an injunction in the federal district court of Los Angeles. It was upheld by Judge Christian Snyder, who ruled in February 2012 that California's fiscal crisis does not outweigh the irreparable injury the plaintiffs would suffer.

In December, a panel of three judges in the 9th U.S. Circuit Court of Appeals in Los Angeles overturned the injunction, allowing the cuts to be levied in March or April. Hayes and other plaintiffs have filed a request to rehear the case by the full panel of the 9th Circuit.

Norman Williams, deputy director of public affairs for the Department of Health Care Services, declined to comment on the department's plans for implementing AB 97, citing its policy for ongoing litigation.

On Thursday, Assemblyman Luis Alejo, D-Watsonville, introduced AB 900 to stop the proposed budget cuts to Medi-Cal reimbursements.

The changes the court allowed to go forward would reimburse skilled nursing facilities at 20 percent to 40 percent below their actual cost to provide long-term care services, he said.

At Mayers Memorial Hospital in Fall River Mills, the $1.6 million in Medi-Cal cuts and $2 million in retroactive payments would force closure of hospital-operated nursing homes in Fall River and Burney, said Matthew Rees, chief executive.

At least 75 of the 99 beds are occupied by frail and elderly residents who would have to be moved to facilities as far away as Sacramento, he said.

Without family and friends nearby, Rees estimated that around 30 percent of them would die within a few months of such a disruptive move.

The closest skilled nursing facilities available for Medi-Cal patients in Portola are at least an hour's drive on mountain roads, Hayes said.

"It's heartless. I can't believe politics would get in the way of care to patients at this stage of their lives," he said.

The closures would also take a toll on local economies. With 250 workers, Eastern Plumas Health Care is the area's largest employer. Closing any part of the health care operation would add to the economic difficulties of the area, where unemployment averages 19 percent, Hayes said.

For Surprise Valley Health Care, a 26-bed hospital in the state's far northeastern corner, the toll of a $625,000 combined Medi-Cal cut and reimbursement payment could doom the facility, taking 85 jobs along with it, said administrator Kelley Gentry.

"Legislators in Sacramento don't seem to understand the importance of hospitals in rural areas or the increased state and federal costs if their elderly patients are forced to move elsewhere," he said.

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