Cumberland Times-News

Local News

March 6, 2010

Medicare cutbacks costing health care providers

KEYSER, W.Va. — CUMBERLAND — A 21-percent reduction in Medicare reimbursements that began March 1 is rippling through the local health-care industry, causing providers to tighten their fiscal belts and making them wonder how badly patient care will be affected.

Bryan J. Wodaski, owner of Tri State Hand and Occupational Therapy, Inc. and a certified hand therapist, said recovery time is usually twice as long as down time from an injury.

“For example, if you have a wrist in a cast for six weeks, you are probably looking at 12 weeks for therapy,” Wodaski said Friday.

Through March, Medicare is continuing to cover extended therapy for severe injuries, said Mary MacDonald, accounts manager at the firm.

Once that extended coverage is eliminated, Wodaski said that even people with multiple severe injuries will have no Medicare help for their therapies for the remainder of the year once their claims reach $1,860.

Medicare cutbacks, of course, lower the revenue stream to Wodaski and other providers.

“We employ 14 and we have 70,000 square feet of space here,” Wodaski said of his complex at 200 Glenn St. “I’m thinking about closing half of it off. Forty percent of our revenue come from Medicare and now that has been cut.”

Wodaski does not hide his belief that political infighting between Republicans and Democrats at the federal level is getting in the way of health care. “It is time to stop all the posturing and to begin thinking about the people,” he said.

At the Western Maryland Health System, President and CEO Barry Ronan sent a letter to employees in late February, explaining to them how the system would deal with a $3 million shortfall and asking for their ideas.

“Two-thirds of our revenue stream comes from Medicare and Medicaid,” Ronan reiterated during a phone interview Friday. He said the local health system’s loss in state funds for next fiscal year will be $1.8 million out of a statewide reduction of $123 million.

Ronan said the bulk of the deficit, $2.5 million, will be retrieved by not allowing employees to accrue personal time off from late February through early July.

Ronan said he recognizes that many health system employees have spouses who are facing furloughs. He said that stopping the accrual of vacation does not affect take-home pay, thus not worsening what may already be a difficult situation at home. “We want to keep people working,” he said.

Ronan said he has received a couple hundred suggestions from employees and physicians about ways to financially cope. “We will definitely pursue the suggestions about ways to conserve energy and about going paperless,” he said.

In recent times, the health system closed its adult day care service because it was losing hundreds of thousands of dollars, according to Ronan. “We will look at other services that are not profitable, but our first attempt will be to make them profitable rather than close them. That approach has already worked with home care services.”

The search is constant for ways to generate new revenue, the CEO said. For example, the recent addition of another thoracic surgeon now allows more of those kinds of procedures to take place at the Western Maryland Regional Medical Center.

Staff travel will be cutback. More professional interactions will take place via Webinars, the cyber space version of a seminar.

The system’s financial condition is further impacted by fewer admissions this winter. For one thing, the influenza season was not as bad as anticipated. Also, the snowy conditions this winter kept people from seeking elective medical help.

“Also, when it came time to discharge some patients, they couldn’t get home because of the weather conditions so they stayed longer in the hospital,” Ronan said. “We incurred those costs because the insurers wouldn’t pay after the discharge date. There were a pretty fair number of those cases,” he said.

Admissions are down also because short-term stays of one or two nights are taking place in what are termed observation beds, which bring a smaller compensation from insurers than do regular admissions.

Ronan said it is important that health care reform take place. “We believe that it should not be accomplished solely by reducing payments to hospitals and physicians. We continue to caution our representatives in Congress that their actions could dramatically impact health care going forward.”

Contact Michael A. Sawyers at msawyers@times-news.com.

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