hometown health managing a critical access hospital hometown health: ( ) a business organization
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HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
HomeTown Health: (HomeTown Health: (www.hometownhealthonline.comwww.hometownhealthonline.com ) )
A Business organization whose mission is to do whatever it A Business organization whose mission is to do whatever it takes legally, morally, and ethically to keep rural hospitals takes legally, morally, and ethically to keep rural hospitals viable in Georgia:viable in Georgia:
56 rural hospital members56 rural hospital members45 Business Partners45 Business Partners2100 enrolled online students2100 enrolled online studentsHTH has 3 core competencies:HTH has 3 core competencies:
Governmental AffairsGovernmental AffairsManagement Advisory ServicesManagement Advisory ServicesOn line education On line education
(http://www.hometownhealthonline.com/)(http://www.hometownhealthonline.com/)
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access HospitalsCritical Access HospitalsCritical Access Hospitals of GeorgiaCritical Access Hospitals of Georgia
Given:Given:35 CAH’s designated in Georgia35 CAH’s designated in GeorgiaFinancial StatusFinancial Status
4 for profits4 for profits27 not for profits27 not for profits4 private not for profits4 private not for profits
Average Net RevenueAverage Net Revenue$10,000,000$10,000,000
Lowest Actual Net RevenueLowest Actual Net RevenueHospital AHospital A $4.5 million$4.5 million
Largest Net RevenueLargest Net RevenueHospital BHospital B $19 million$19 million
Average county size – less than 15,000Average county size – less than 15,000
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
• Two Types of Hospital Reimbursement designationsTwo Types of Hospital Reimbursement designations
• CAH – Critical AccessCAH – Critical Access– Formerly 101% cost reimbursementFormerly 101% cost reimbursement– Currently no guarantees with CMO’s Currently no guarantees with CMO’s – 25 beds25 beds
• PPS Prospective Payment SystemPPS Prospective Payment System– In patient Payment at 83.1%In patient Payment at 83.1%– Out Patient – APC Ambulatory Payment Classification Out Patient – APC Ambulatory Payment Classification
- as low as 20%-30% of charges- as low as 20%-30% of charges
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals are not Critical Access Hospitals are not designed to be profitable due to designed to be profitable due to being cost based but rather to being cost based but rather to
recover costsrecover costs
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:
Major Issues to ManageMajor Issues to ManageCost to charge ratioCost to charge ratioEMTALAEMTALAFederal Reimbursement CutsFederal Reimbursement Cuts
Medicare Advantage – Privatized MedicareMedicare Advantage – Privatized MedicareOverpayment Recovery InitiativesOverpayment Recovery Initiatives
RAC’s, PERM, PEPPER, Present on Admission RAC’s, PERM, PEPPER, Present on Admission Indicators, OIG, Medicaid Program IntegrityIndicators, OIG, Medicaid Program Integrity
Georgia State Reimbursement CutsGeorgia State Reimbursement CutsPrivatized MedicaidPrivatized MedicaidOIG Program IntegrityOIG Program Integrity5% Retrospective Budget Cut for 2009 Budget 5% Retrospective Budget Cut for 2009 Budget currently in effectcurrently in effectOngoing ACS recoupments due to computer fixesOngoing ACS recoupments due to computer fixes
Inability to produce a profit Inability to produce a profit Payor mixPayor mix
Total skill setTotal skill setInability to hire full skill setInability to hire full skill setDepreciation unfundedDepreciation unfundedCEO turnoverCEO turnoverOB not profitableOB not profitable
250 threshold250 threshold
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:
Major Issues to ManageMajor Issues to ManagePayor mix profitability requirements – standalonePayor mix profitability requirements – standalone
33% commercial 33% commercial 12% or less self pay12% or less self payVirtually no opportunity for excess margin stand aloneVirtually no opportunity for excess margin stand alone
7 year spiral for cost to charge ratio7 year spiral for cost to charge ratioAcquire designationAcquire designationThen hire docs and add significant net revenue Then hire docs and add significant net revenue
Receive $600,000 recoupment due to no cost to charge ratio Receive $600,000 recoupment due to no cost to charge ratio updateupdate
Then cut expensesThen cut expensesReceive $600,000 recoupment due to no cost to charge ratio Receive $600,000 recoupment due to no cost to charge ratio
updateupdateThen revise ChargemasterThen revise Chargemaster
Receive $600,000 recoupment due to no cost to charge ratio Receive $600,000 recoupment due to no cost to charge ratio updateupdate
7th year no place to go7th year no place to goDifficulty converting back to PPSDifficulty converting back to PPS
Less than tow or three nationwide have convertedLess than tow or three nationwide have convertedLost 100% cost reimbursement with CMO’s and Lost 100% cost reimbursement with CMO’s and
privatized Medicaidprivatized Medicaid
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:• Major Issues to ManageMajor Issues to Manage
•Cost to charge ratioCost to charge ratio
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:• Major Issues to ManageMajor Issues to Manage
• EMTALAEMTALA
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:• Major Issues to ManageMajor Issues to Manage
• Federal Reimbursement CutsFederal Reimbursement Cuts• Medicare Advantage – Privatized Medicare Advantage – Privatized
MedicareMedicare• Overpayment Recovery InitiativesOverpayment Recovery Initiatives• RAC’s, PERM, PEPPER, Present on RAC’s, PERM, PEPPER, Present on
Admission Indicators, OIG, Medicaid Program Admission Indicators, OIG, Medicaid Program IntegrityIntegrity
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:• Major Issues to ManageMajor Issues to Manage
• Georgia State Reimbursement CutsGeorgia State Reimbursement Cuts– Privatized MedicaidPrivatized Medicaid– OIG Program IntegrityOIG Program Integrity– 5% Retrospective Budget Cut for 2009 5% Retrospective Budget Cut for 2009
Budget currently in effectBudget currently in effect– Ongoing ACS recoupments due to Ongoing ACS recoupments due to
computer fixescomputer fixes
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:• Major Issues to ManageMajor Issues to Manage
• Inability to produce a profit Inability to produce a profit – Payor mixPayor mix
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:• Major Issues to ManageMajor Issues to Manage
• Total skill setTotal skill set
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:• Major Issues to ManageMajor Issues to Manage
• Inability to hire full skill setInability to hire full skill set
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:• Major Issues to ManageMajor Issues to Manage
• Depreciation unfundedDepreciation unfunded
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:• Major Issues to ManageMajor Issues to Manage
• OB not profitableOB not profitable– 250 deliveries threshold250 deliveries threshold
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:• Major Issues to ManageMajor Issues to Manage
• Payor mix profitability requirements – Payor mix profitability requirements – standalonestandalone– 33% commercial 33% commercial – 12% or less self pay12% or less self pay– Virtually no opportunity for excess margin stand Virtually no opportunity for excess margin stand
alonealone
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:• Major Issues to ManageMajor Issues to Manage
• 7 year spiral for cost to charge ratio7 year spiral for cost to charge ratio– Acquire designationAcquire designation– Then hire docs and add significant net revenue Then hire docs and add significant net revenue
• Receive $600,000 recoupment due to no cost to charge Receive $600,000 recoupment due to no cost to charge ratio updateratio update
– Then cut expensesThen cut expenses• Receive $600,000 recoupment due to no cost to charge Receive $600,000 recoupment due to no cost to charge
ratio updateratio update– Then revise ChargemasterThen revise Chargemaster
• Receive $600,000 recoupment due to no cost to charge Receive $600,000 recoupment due to no cost to charge ratio updateratio update
– 7th year no place to go7th year no place to go
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:• Major Issues to ManageMajor Issues to Manage
• Difficulty converting back to PPSDifficulty converting back to PPS– Less than two or three hospitals Less than two or three hospitals
nationwide have convertednationwide have converted
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals:Critical Access Hospitals:• Major Issues to ManageMajor Issues to Manage
• Lost 101% cost reimbursement with Lost 101% cost reimbursement with CMO’s and privatized MedicaidCMO’s and privatized Medicaid
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
So what is So what is most most
important?important?
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals most Critical Access Hospitals most critical attribute to manage is critical attribute to manage is
the cost to charge ratiothe cost to charge ratio
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals next Critical Access Hospitals next most important attribute to most important attribute to manage is the payor mixmanage is the payor mix
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Typical Critical Access Typical Critical Access Hospitals payor mix is as Hospitals payor mix is as
followsfollows
Typical Critical Access Rural Hospital Payor Mix
Payor
% cost reimbursement
% Net Revenue by Payor
Weighted Reimbursement by Payor
Medicare 95.000% 45% 42.750%
Medicaid 95.000% 14% 13.300%
No Pay 2.000% 15% 0.300%
Commercial 150.000% 26% 39.000%
To Break even 100% 95.350%
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals next most Critical Access Hospitals next most important attribute to manage is important attribute to manage is
the Business Office Claims the Business Office Claims Processing Processing
Benchmarks include:Benchmarks include:Accounts ReceivableAccounts ReceivableBad DebtBad DebtSelf PaySelf Pay
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals Self Critical Access Hospitals Self PayPay
must be measured as must be measured as
Uninsured Uninsured
UnderinsuredUnderinsured
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals Critical Access Hospitals must use telemedicine to must use telemedicine to increase service diversityincrease service diversity
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals Critical Access Hospitals must prepare for must prepare for regionalizationregionalization
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
Critical Access Hospitals must Critical Access Hospitals must prepare for Loss of ICTF and UPL prepare for Loss of ICTF and UPL as state and federal government as state and federal government
cut subsidiescut subsidies
HomeTown Health HomeTown Health Managing a Critical Managing a Critical
Access HospitalAccess Hospital
A few Critical Access Hospitals A few Critical Access Hospitals may plan for conversion back to may plan for conversion back to
PPS which has never been done in PPS which has never been done in GeorgiaGeorgia
HomeTown Health HomeTown Health Managing a Critical Access HospitalManaging a Critical Access Hospital
• Regionalized Health CareRegionalized Health Care
Forecasts and Trends in Forecasts and Trends in GeorgiaGeorgia
• RegionalizationRegionalization– Rep. Mickey ChannellRep. Mickey Channell describes describes
•Demographic circle – 40,000 populationDemographic circle – 40,000 population
•Hospital net revenue $35-$40 million Net Hospital net revenue $35-$40 million Net RevenueRevenue
•Many hospitals will close in next ten yearsMany hospitals will close in next ten years
HomeTown Health Industry Overview _ HomeTown Health Industry Overview _ Purple overlays illustrate Purple overlays illustrate regionalization (per HTH estimates) regionalization (per HTH estimates) after Grants per 40,000 population after Grants per 40,000 population podspods
HomeTown Health Industry OverviewHomeTown Health Industry Overview
• Regionalization as Regionalization as supported by State supported by State BudgetBudgetThe following proposals were approved for the listed amount of funding:The following proposals were approved for the listed amount of funding:
1. Central Georgia Regional, Forsyth 1. Central Georgia Regional, Forsyth $321,500 $321,500
2. Ty Cobb Healthcare, Royston 2. Ty Cobb Healthcare, Royston $302,500 $302,500
3. West GA Rural Health, Bremen 3. West GA Rural Health, Bremen $250,000 $250,000
4. Spring Creek, Blakely 4. Spring Creek, Blakely $225,000 $225,000
5. REACH, Greensboro 5. REACH, Greensboro $201,000 $201,000
6. Three Ring Health Care, Hinesville 6. Three Ring Health Care, Hinesville $200,000 $200,000
TOTAL TOTAL $1.5 million$1.5 million