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NNY hospitals could lose $29 million under Medicare sequestration

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Northern New York hospitals could lose up to $29 million in Medicare cuts throughout the next eight years if Congress doesn’t delay sequestration, according to the Healthcare Association of New York State.

The Albany-based health care advocacy organization released a report this week that said the reductions, which total $2.1 billion throughout the state, could go into effect April 1.

Cuts to Medicare reimbursement for hospitals throughout Jefferson, Lewis, St. Lawrence and Franklin counties range from $632,000 to $9 million from 2013 to 2021. Massena Memorial, a 50-bed hospital in Massena, faces a $1,993,000 cut.

“Two million dollars to our bottom line is huge,” said Tina R. Corcoran, hospital spokeswoman.

Claxton-Hepburn Medical Center, Ogdensburg, is looking at a $4.6 million cut over the same period.

But more important, said Laura C. Shea, spokeswoman for the hospital, are the cuts that go into effect immediately.

Ms. Shea said Claxton-Hepburn is expecting a $440,000 impact in the first year alone.

“Cuts are never good,” Ms. Shea said. But she said the impact won’t be as tough as it might have been had the hospital not prepared for the cuts.

“The sequestration cuts were budgeted. We’re not going to have to scramble to recoup those losses,” Ms. Shea said.

Lewis County General Hospital Chief Executive Officer Eric R. Burch said he will watch “budget sequestration with interest.” The Lowville hospital could lose $1,414,000 in Medicare reimbursement.

“Over the next few years the Medicare sequestration changes would be critical to Lewis County General Hospital,” he said. “Our facility recently submitted an application to change our status from sole community hospital to a critical-access hospital. If approved, this change would decrease our losses.”

That loss would go from a 2 percent to a 1 percent cut in Medicare reimbursement, according to Ben Moore III, CEO of River Hospital, Alexandria Bay, a critical-access hospital. According to the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services, critical-access hospitals must be Medicare-participating hospitals that meet several guidelines, including being located in a rural area, furnishing 24-hour emergency care services seven days per week and providing no more than 25 inpatient beds that can be used for inpatient or swing-bed services.

Mr. Moore said critical-access hospitals receive 101 percent for Medicare costs, but in sequestration that would drop to 100 percent, which would equate to a $56,000 loss for 2013 alone.

“It’s not comfortable, obviously, but is it survivable? Yes,” he said. “Combine that with a whole bunch of other things, then maybe not.”

Although HANYS listed River Hospital as facing an $875,000 reduction in reimbursement, Mr. Moore said it actually would be about half of that.

An annual loss of $100,000 to $200,000 would severely hurt the hospital, Mr. Moore said. Since the reimbursement system is volume-based, he said, hospitals are beefing up outpatient services. That has been a focus of River Hospital for the past couple of years.

At Canton-Potsdam Hospital, Potsdam, spokeswoman Rebecca J. Faber said a 2 percent cut in Medicare reimbursement would mean a $3,488,000 loss for the hospital. The first year of implementation would be harder, she said, because it will be implemented over nine months instead of 12.

“It would definitely have an impact on overall revenue,” she said. “We continuously plan at the hospital for ways to provide high quality care while looking for efficiencies. Operating margins are immediately reinvested in new technologies, so there is very little room to cut.”

She said the hospital is hopeful the Medicare sequestration will not take effect.

The breakdown of possible cuts in Medicare reimbursement for other area hospitals includes $710,000 for Carthage Area Hospital; $632,000 for Clifton-Fine Hospital, Star Lake; $751,000 for E.J. Noble Hospital, Gouverneur; $9,007,000 for Samaritan Medical Center, Watertown; $3,779,000 for Adirondack Medical Center, Saranac Lake, and $1,771,000 for Alice Hyde Medical Center, Malone.

The fear of having to reduce services has loomed locally for many years, as state and federal governments have had to look at Medicare and Medicaid reductions to cut costs. Mr. Moore said that is why a consortium of seven north country hospitals is exploring possible collaborative efforts.

“You can’t survive free-standing in the way we have before,” he said. “The more this is before the public, the better it will be. Ultimately we have to appeal to our communities to help us.”

State hospitals also face more than $20 billion in federal cuts over the next 10 years, which is unrelated to sequestration, according to the HANYS report. Those reductions include $15.9 billion from Affordable Care Act implementation, $4.1 billion from Medicare inpatient coding reductions and $23.5 million in Medicare cuts in support to providers for patients’ unpaid “bad debt.”

Johnson Newspapers writer Sean Ewart contributed to this report.

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