Traverse City Record-Eagle

March 12, 2013

One-two Medicare punch for West Shore

Traverse City Record-Eagle

---- — MANISTEE — West Shore Medical Center expects to lose between $3 and $4 million in Medicare dollars this year and next, but hopes to make up the difference with a higher number of inpatient stays.

“I’m not sure how the numbers will play out,” said Julie Blaney, marketing manager. “We’re hoping to make up a difference by bringing more beds online, but we have a big Medicare population.”

The small Manistee hospital, with 25 beds and a $60 million budget, is getting a one-two punch in Medicare reimbursement cuts.

First, it’s losing 2 cents on every Medicare insurance dollar beginning in April because of the recent federal budget sequester. That will mean up to $400,000 in lost revenues annually, Blaney said.

The second punch will land much harder. The hospital predicts Medicare losses of up to $4 million next year. That's because it will likely lose its "critical access" designation gained back in 2009. Critical access hospitals get higher Medicare dollars because they deliver necessary health care in rural areas.

"It's going to be a big hit," Blaney said.

West Shore may lose its critical access status because it's located less than 32 miles from Ludington's Memorial Medical Center. Critical access hospitals can be no closer than 35 miles from the next hospital, Blaney said.

The threatened loss of the coveted designation surprised hospital officials because nothing changed since it was approved four years ago, Blaney said.

“Certainly the distance between us and our neighbor hospitals did not change," Blaney said.

West Shore tried to argue that Manistee's drawbridge and two train crossings would delay patient travel, but with no luck.

“They were not persuaded, but we are continuing to look at all our options,” Blaney said.

Hospital officials are trying to persuade their legislators to push for an exception, but are preparing for the worst, she said.

The county-owned hospital will apply for an acute care designation so it can return 20 beds to the hospital it was forced to remove in 2009. That's because critical access designation allows a maximum of 25 beds. West Shore has to prove the beds are necessary to get them licensed by the state.

West Shore employs about 350 full-time equivalent employees, a number that has remained the same since the first of the year. The recent loss of a surgeon was unrelated to the Medicare changes, she said.

West Shore doesn’t plan to lay off employees, even with the Medicare cuts, Blaney said.

“We’re energized here,” she said. “We have a lot of work to do, and we’re doing it. We’re just buckling down and getting it done.”