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Panel hasn't ruled out hospital rate increases

April 02, 2004|by PEPPER BALLARD

pepperb@herald-mail.com

HAGERSTOWN - A Maryland Health Services Cost Review Commission official said Thursday that the Washington County Health System's request that it be allowed to raise hospital rates before a new hospital is built has not been ruled out.

"We reluctantly said we'll look at it. We've said it's not convincing, but we're not ruling it out," said Cost Review Commission Executive Director Robert Murray.

The Morning Herald on Thursday erroneously quoted David M. Funk, an attorney representing the city in the matter, as saying the Cost Review Commission had found that the hospital's plan wasn't financially feasible. Funk did not say that. He had written in a letter that consultants for the city made that assessment.

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Health system President and Chief Executive Officer James P. Hamill said Wednesday the health system has been asked to submit in May its rate proposal as a policy change instead of as an exception to current policy.

Murray said assessing a rate increase before construction is completed on a new facility is not practiced in the state.

The health system plans to move the hospital from East Antietam Street in downtown Hagerstown to a site near Robinwood Medical Center outside the city. The move has not been approved by the Maryland Health Care Commission.

The City of Hagerstown, in an effort to keep the hospital in the city, has offered to take by eminent domain property on East Antietam Street if the hospital would agree to rebuild and expand there.

Funk, in a letter dated March 24 to Jack T. Tranter, the hospital's attorney, said that Maryland Health Care Commissioner Robert Nicolay in a memo "requested the advice of the Health Services Cost Review Commission regarding the financial feasibility of the Robinwood project.

"City of Hagerstown has been advised by its experts, Hal Cohen and Andy Solberg, that the Robinwood project as submitted is not financially feasible and cannot be made financially feasible without a reduction in the scope and cost of the project," Funk said in the letter.

Funk said Wednesday that the views of the city consultants were "confirmed" by the commission.

However, Murray said Thursday, "We never said it wasn't financially feasible."

Funk could not be reached for comment Thursday.

Murray said the review commission is waiting to hear from the hospital about how changing the rate policy would benefit the community at large.

He said the commission would review the hospital's proposal in May, but would not have a decision on the proposal until September.

Under the hospital's proposal, when the Robinwood project is approved and the hospital is able to borrow $165 million to build a new hospital, it wants the Cost Review Commission to grant a 3 percent rate increase for patients and or insurance providers, Hamill has said.

He has said that when construction is complete, the hospital wants the commission to grant an additional 2 percent rate increase for patients and or insurance providers.

Hamill has said allowing the hospital to raise rates sooner would enable it to borrow less money.

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