CONTRIBUTORS

How Obamacare and sequestration will affect Maine hospitals

Posted Feb. 10, 2013, at 4:22 p.m.

Hospitals thank Maine Sen. Susan Collins and former Sen. Olympia Snowe for their support in fighting cuts that threaten rural Mainers’ abilities to see physicians close to home. At a crucial point during the New Year’s fiscal cliff negotiations, our senators stood up for Maine hospitals and we appreciate their efforts.

Hospitals in Maine already face millions of dollars in cuts.

To finance the Medicaid eligibility expansions in the Affordable Care Act, the law reduced hospital reimbursements. According to the Maine Hospital Association, from 2011 to 2019, the aggregate amount of those cuts to hospitals in Maine is $879 million. In 2013, the cuts total $33 million.

A recent deal to prevent rate cuts to physicians who see Medicare patients included hospital reimbursement reductions. The loss to Maine hospitals was $50 million over four years.

The fiscal cliff deal was temporary and the “sequestration” cuts will take effect March 1. Maine hospitals would lose $21 million in 2013 as a result of the proposed sequestration cut and a total of $230 million over a 10-year period.

In order to prevent these cuts, Congress needs to find alternatives. Unfortunately, even worse ideas are being considered. One such idea is capping total Medicare payments to hospitals for evaluation and management services.

Such a cut would be devastating to the Franklin Community Health Network, the rural integrated health network led by 65-bed Franklin Memorial Hospital in Farmington. The health network employs about 85 percent of the physicians and other providers in our service area, often subsidizing their practices to enable access to essential medical services for the community. Of our total caseload, 45 percent receive Medicare and 20 percent receive Medicaid.

The system has five provider-based facility locations, all of which abide by our hospital’s charity care and financial assistance guidelines. While some private providers in our area have been able to remain open by limiting access to Medicaid and uninsured patients, the network’s clinics have experienced a significant increase in overall charity care. In the past 12 months, our provider-based clinics provided $750,000 in charity care and financial assistance (3.5 percent of costs).

With provider-based payment, we have increased access to both primary and specialty care that otherwise would beunavailable in the community, including ear, nose and throat services, obstetric services, orthopedic surgery, dermatology, general surgery, outpatient oncology and cardiology.

Even with provider-based payment, all five outpatient clinics are losing money. In fiscal year 2012, the primary care clinics combined lost $3.5 million. If payment for evaluation and management services were to be cut, we anticipate reductions in both primary care physicians and specialists. Cuts to evaluation and management services, together with recent changes in state and federal reimbursement, would make the network’s ability to provide the current level of services to Medicaid and uninsured patients unsustainable — because the hospital had a loss in fiscal year 2012 of $3.7 million and has a loss of $1.1 million in the first four months of this fiscal year.

Reductions in primary and specialty care because of cuts in Washington would severely limit access to care, remove benefits of care coordination and associated services such as dedicated nurse care, support services, chronic disease management and education provided by the relationship between the clinics and hospital, and be detrimental to rural health care.

In December, Snowe and Collins wrote a letter to Senate leadership outlining why the evaluation and management cut would be devastating to hospitals. Reps. Chellie Pingree and Mike Michaud also have provided vital support for Maine hospitals in this regard.

Snowe and Collins urged Majority Leader Harry Reid and Minority Leader Mitch McConnell to adopt a balanced approach that doesn’t jeopardize access to care for rural Mainers. We thank them for their efforts on behalf of hospitals.

Rebecca Ryder is president and CEO of Franklin Community Health Network and Franklin Memorial Hospital in Farmington.

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