W.Va. hospitals lose millions

October 16, 2000

W.Va. hospitals lose millions

By DAVE McMILLION / Staff Writer, Charles Town

CHARLES TOWN, W.Va. - Two Eastern Panhandle hospitals are expected to face nearly $3 million in losses this year due to cuts in Medicare reimbursements required by a federal balanced budget act and low reimbursement rates in other programs.


In Jefferson County, Jefferson Memorial Hospital is expected to face about $1.7 million in losses and City Hospital in Berkeley County is currently putting its loss at about $1.1 million, officials at the two hospitals said Monday.

City Hospital's current estimated loss is less than Jefferson Memorial's because its fiscal year does not end until December, said hospital spokeswoman Teresa McCabe.

Most of the losses are being attributed to the 1997 federal Balanced Budget Act. To balance the federal budget, the act required cuts in reimbursements for Medicare. Although low reimbursement rates from Medicaid and the West Virginia Public Employees Insurance Agency are also causing the losses, the bulk of the losses are being caused by Medicare cuts, said John Sherwood, chief operating officer of Jefferson Memorial.


Negative effects from the Balanced Budget Act are just one set of challenges facing City Hospital, according to McCabe.

The hospital is expected to face an overall operating loss of over $2 million this year, and is expected to seek permission for a rate increase, although it is too early to tell how much, McCabe said.

"So certainly everything needs to be re-evaluated," McCabe said.

Cuts caused by the Balanced Budget Act are causing problems for hospitals throughout the region, officials said.

Last week in Pennsylvania, officials at Waynesboro Hospital in Waynesboro, Pa., said the cuts from the act are expected to cost the hospital $900,000.

Next week, officials from Jefferson Memorial and City Hospital will meet with local state lawmakers to discuss ways of decreasing the losses. City Hospital officials will meet with lawmakers Oct. 24 and Jefferson Memorial officials will meet with lawmakers Oct. 25.

Although reimbursement rates for Medicare are controlled by Congress, the state controls rates for PEIA and Medicaid, said McCabe.

The reimbursement rates for PEIA are lower than those for Medicare, and one solution could be finding a way to increase those rates, said Sherwood.

Del. Vicki Douglas, D-Berkeley said the options open to state lawmakers are limited.

"As tight as finances are, I don't think I can say, 'With the brush of a hand, we can fix that,''' Douglas said.

Douglas said rural hospitals are being hit especially hard by the Medicare cuts. Hospitals in big cities can deal with the cuts by shifting personnel or reducing the size of programs, but smaller hospitals have less "wiggle room" to offset costs, she said.

Gov. Cecil Underwood is trying to exempt some hospitals in the state from the regulatory process they are required to follow to get rate increases, but no hospitals in the Panhandle are on that list, said Underwood officials and McCabe.

Sherwood said a rate increase would not significantly change the hospital's bottom line since a majority of its patients are government payers.

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