LAKE COUNTY — Sutter Lakeside Hospital”s administration has confirmed they applied for Critical Access Hospitals (CAH) designation at the beginning of the month. It is one of three possible solutions for SLH to dodge ever-pressing financial shortfalls.
The designation would allow the hospital to receive more federal funds and also downsize its inpatient bed capacity from 69 to 25.
In part due to a high quantity of Medicare patients at SLH, and a reduction of Medicare payments, the hospital is not covering its costs, according to Mark Buehnerkemper, acting chairman of the Sutter Wellness Foundation. The CAH status would allow the hospital to receive “adequate reimbursement from Medicare” according to a press release dated Nov. 12 written by SLH Wellness Center & Foundation Director and hospital spokesperson Tammi Silva.
“Since 98 percent of our patients visit us for outpatient care, this option allows us to preserve the majority of our services and we believe the impact to the community will be relatively transparent,” Silva wrote.
SLH submitted an application to obtain CAH status on Nov. 1, but has not made a final decision whether they will go with that option. For three months, SLH administrators have strongly considered the CAH option, along with two others: reduction of services, including outpatient and physician services; and closing services that suffer serious loss of funds such as ER, OB, and/or inpatient services.
For hospitals to receive CAH status, they must have the following: 25 or fewer beds; public or non-profit status located in a state with an existing Medicare Rural Hospital Flexibility program; a 24-hour emergency care service; a location of 35 miles from any other hospital, 15 miles if mountainous or secondary roads, or certified by the state as being a “necessary provider” of heath care; and membership in a rural health network.
SLH administrators are not sure whether the hospital will qualify for CAH. So far, the only step SLH has taken to meet CAH requirements has been pursuing accreditation by the Center for Medicare Services (CMS), a process that will take four to six months.
The hospital expects to a response about whether SLH qualifies for CAH at the end of November, according to CEO Kelly Mather.
Currently, SLH is equipped to provide up to 69 licensed inpatient beds, but the highest acute census for the hospital has not exceeded 27, Mather said. The average daily acute bed occupancy or “census” is 24.7.
“Licensed beds are meaningless. If there was a need we would go up to 69 beds, but the demand for inpatient beds for Lake County is 25 for north Lake County and 19 for south Lake County. Between Redbud Community Hospital and Sutter we have plenty of beds licensed to meet the needs of the community,” Mather said.
According to Silva, if SLH obtains CAH status, on a busy day, patients may be transferred to another inpatient facility, but the majority of the time patients will continue to be admitted locally.
“Right now, if we are on what we call “diversion,” simply because we don”t have the right physicians or enough nurses, we transfer patients to another hospital,” Mather said. “We have 550 transfers per year. As far as what would happen if that [CAH] status goes through, we are hoping we won”t have to do any more transfers than we do today.”
Mather and Silva said that for more than five years, SLH has been financially stable, with a period that was “extremely unstable” during the late 1990s.
In 2003, the bankruptcy of the Health Plan of the Redwoods saw a $5 million loss for SLH, from which the hospital was able to recover. Recently, the reimbursement for Medicare patients dropped significantly. This means the hospital now loses 40 percent on every Medicare patient it serves. “The impact was so significant that measures to address the situation require substantial and swift change,” Silva said.
Bill Kearney, chairman of SLH”s board, will be working with other administrators to decide SLH”s future, including the ultimate decision about adopting a CAH status in the next few months.
“The board of directors and administrative team spent much of the fall proactively seeking ways to address the financial impact before financial loses became severe enough to affect the residents of Lake County,” Kearney said.
Contact Elizabeth Wilson at ewilson@record-bee.com
