CARTHAGE — Carthage Area Hospital may receive an increase of $5 million in annual federal insurance reimbursement after it receives its critical-access designation from the U.S. Centers for Medicare and Medicaid Services.
Chief Operating Officer Richard A. Duvall said Thursday that the hospital expects to receive final designation approval “any day.”
“This is part of our recovery plan we’ve talked about for two years,” Mr. Duvall said. “The biggest change is we’ll be reimbursed 101 percent of cost. Now, it’s based on individual components.”
Financial struggles related to reimbursement rates, billing problems and other issues have plagued the hospital for the past several years. Within the last two, the hospital has reduced staff, consolidated beds, purchased new machines and increased outpatient services, among other changes, as it works toward overall stability.
According to the Rural Assistance Center, which is supported by the U.S. Department of Health and Human Services, a critical-access hospital is “a hospital that is certified to receive cost-based reimbursement from Medicare,” which is intended to improve hospitals’ financial performance in order to reduce hospital closures.
As Carthage Area Hospital continues to work through its recovery plan, it will also team with Samaritan Medical Center on an affiliation agreement. The two have a memorandum of understanding, and expect the formal affiliation process to be finalized later this year or early next year.
Mr. Duvall said the critical-access designation will benefit all parties within the health system because it allows for financial stability. If all subsidiary organizations are stable, the overall health system will be, too, he said, “instead of having a weak link.”
Carthage Area Hospital continues to provide quality health care, he said, and will become even stronger with the critical-access designation. Chief Financial Officer Donald H. Schnackel said the increase of $5 million a year in reimbursement for Medicaid, Medicare and Tricare federal insurance programs is a “significant financial impact on the hospital.”
Under the current reimbursement structure, he said, the hospital receives only 43 cents for each dollar it bills Medicare. About 65 percent of Carthage Area Hospital’s business comes from those three federal insurance programs, Mr. Schnackel said.
Mr. Duvall said the process of becoming a critical-access hospital has been ongoing since April. The hospital filled out an application to both CMS and the state Department of Health, and the state recently completed a survey of every operation in the facility. He said the state has since recommended to the federal agency that Carthage Area Hospital become a critical-access hospital.
“I don’t believe there’ll be any issues with that,” he said.
In preparation for that designation, Carthage Area Hospital recently closed its Evans Mills Family Health Center, giving patients there the option to receive care at the hospital’s main family health center at 117 N. Mechanic St. All five staff members, including two providers, now work out of that Carthage location. The hospital also transferred ownership of the Adams Community Health Center, 10881 U.S. Route 11, to Samaritan Medical Center, Watertown. Those changes were necessary because for a critical-access designation, the hospital could not have affiliated locations within 15 miles of the main hospital.
Other criteria include being located in a rural health area, offering 24-hour emergency care, maintaining no more than 25 inpatient beds and having an average annual length of stay of 96 hours or less per patient for acute care, according to CMS.
Mr. Duvall said while the hospital restructures itself, providers are still available to offer services they have been, with the added emphasis on more primary care. The overall goal, he said, is to reduce the cost of health care, and that may occur if more primary care providers help keep people well.
“Now we’re moving in the right direction,” he said. “I think staff moral is better than it has been, and they’re rallying around the hospital.”
Everything Carthage Area Hospital is doing, he said, falls in line with the guidance of the North Country Health System Redesign Commission and other organizations — statewide and nationally — that promote collaboration.
Both Samaritan and Carthage hospitals continue to work through the affiliation agreement, and they have engaged KPMG Healthcare and Life Sciences “to lead the strategic planning process, with a final report due in late August,” according to a recent news release.
A call Thursday to Samaritan was not returned immediately.