Two of our county’s cornerstone institutions are facing a crisis. And we urge our elected representatives locally and in the state Legislature to do everything in their power to help.
Seneca Healthcare District and Eastern Plumas Health Care are facing cuts to their respective skilled nursing facilities due to a bill passed in the California Legislature in 2011.
Assembly Bill 97 passed in 2011 reduced MediCal reimbursement rates for distinct-part skilled nursing facilities back to rates that were applicable in the 2008-09 rate year, less 10 percent. The reduction is effective retroactively back to June 1, 2011. The result is an effective rate decrease of 23 percent for EPHC — the retroactive cuts amount to $2.4 million it has to pay back, while Seneca’s is estimated at $100,000.
Both will suffer major setbacks, but they will be relative to the number of skilled nursing beds they offer — 16 at Seneca and 66 at EPHC.
Seneca’s director of finance, Cheryl Darnell, said they think they could handle the back payment, but the additional loss of monthly income by losing its skilled nursing beds would undoubtedly create even more financial hardships for the already cash-strapped hospital.
However, if EPHC is forced to pay back $2.4 million, that hospital will go out of business.
It’s that simple. It would be devastating.
It would mean patients and their families will have to leave the area for skilled nursing facilities in Sacramento, San Francisco or even Los Angeles. Up to 250 jobs will be eliminated. The Portola-area economy will be decimated, and the financial tsunami will be felt throughout the region.
EPHC’s chief executive officer, Tom Hayes, has been sounding the alarm in Sacramento on behalf of EPHC and other small rural hospitals. But, as of now, the $2.4 million bill will be due in a matter of weeks, not years. Time is running out.
We are joining Hayes’ plea to the California Department of Health Care Services to not proceed with implementation of the cuts to reimburse MediCal for services provided by those hospitals that also have their own skilled nursing facilities.
For a hospital with an average annual net profit of $439,950, the financial hit will be staggering. The hospital simply doesn’t have the financial means to pay that bill.
If the governor and lawmakers in Sacramento step back and really look at the situation we are facing, it should be an easy decision. We don’t think they intended to put rural hospitals like EPHC out of business when they were balancing the budget. In fact, they actually put language in the law that allows for case-by-case exemptions.
The state should make exceptions for vulnerable hospitals like EPHC and Seneca that have a large MediCal population in their skilled nursing facilities; hospitals that are the sole providers for their communities and that will likely close if these cuts are implemented.
The state budget is in much better shape than when the cuts were approved. Squeezing an extra $2.4 million out of a small rural hospital is no longer necessary.
We urge you to take immediate action and join us in asking our elected officials to take up this cause. Their addresses and phone numbers are listed at the bottom of the next page.