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Law has mixed effects on W.Va. hospitals

December 27, 2000|By DAVE McMILLION, Charles Town

Law has mixed effects on W.Va. hospitals



MARTINSBURG, W.Va. - A new federal law designed to help hospitals recover from cuts in Medicare reimbursements is having mixed effects at two local hospitals.

A spokeswoman at City Hospital was upbeat Wednesday over the estimated $1.3 million the hospital is expected to receive to offset Medicare cuts.

Although City Hospital is projecting a $2.5 million loss for this fiscal year, the $1.3 million from the federal government will go a long way toward improving the bottom line at the hospital, said Teresa McCabe.

Officials at Jefferson Memorial Hospital in Jefferson County were less optimistic.

Jefferson Memorial officials said they are expecting to lose about $1.7 million this year due to cuts in Medicare reimbursements.

Although the new federal law was expected to reimburse Jefferson Memorial for the total $1.7 million, the hospital will actually receive about $500,000, said John Sherwood, chief operating officer at Jefferson Memorial.

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That is because $1.2 million of the reimbursement would have come from what is called "disproportionate share payments." The problem is that Jefferson Memorial does not qualify for such payments, Sherwood said.

The funding shortfall adds to a number of challenges already facing Jefferson Memorial, Sherwood said Wednesday.

The hospital is having trouble keeping nurses from leaving the county for better paying jobs and the area's malpractice insurance rates - which are up to double the rates in some other states - are keeping doctors from coming to the area to practice, Sherwood said.

Jefferson Memorial recently increased its nursing salaries by 20 percent in an attempt to keep the pay competitive, Sherwood said.

Much of the financial losses at the two local hospitals are being attributed to the 1997 federal Balanced Budget Act. To balance the federal budget, the act required cuts in reimbursements for Medicare.

Earlier this month, President Clinton signed the Benefits Improvement and Protection Act, which includes $11.5 billion over five years to help hospitals and health systems deal with financial shortfalls caused by the Balanced Budget Act.

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