A Message from the CEO
Hello Weston County,
I would like to update the community on some new issues from Medicare changing rules and our response to those changes.
First, some background information. Medicare pays Critical Access Hospitals (Weston County Health Services is one) based in some part on cost. The way they do it is costs that can be reasonably attributed to Medicare patients are paid at 101% minus 2%. Meaning we get 99% of the costs that Medicare feels were associated with its patients as a means of determining what we get paid the next year. This money is not on top of the usual payments Medicare gives a bigger place but instead of. There are often caps on how much a facility can get depending on the type of payment. Also, know that Medicare is anticipating a 3.8% cut in spending next year. To get paid the cost the physical building, the way it operates, and services provided all have to meet Medicare’s criteria.
The current Newcastle clinic is listed as a Rural Health Clinic, it is utilizing a “grandfather status” right now. A Rural Health Clinic has an upper limit on reimbursement at $126 per visit for Medicare patients. The hospital bought the clinic a few years ago to try and get the clinic to be part of its’ cost report and change the status to Provider Based Rural Health Clinic. A Provider Based Rural Health Clinic used to (prior to Jan 2021) have a much higher upper limit. The payment limit is now the same as Rural Health Clinic at $126. Further, to be on the cost report of the hospital the clinic has to meet all of the ADA requirements for a healthcare facility which are many.
Next, there is a program called 340B, it is a pharmacy program where the hospital receives help for covering medications. It is a complicated program that has drug companies help smaller hospitals and clinics provided they meet all the criteria. Again, for Medicare to consider the clinic for this program the clinic building has to meet certain stringent requirements.
To update the Newcastle clinic to meet the above requirements, WCHS portion would be $700,000 plus grants. All in would be from 1.5-2 million. Further, all the projects I am aware of right now in healthcare are going over budget 20-35% and the grants I do not believe are going to pay for any of that.
Lastly, we have the issues of physical location. The clinic across the street from the hospital and pharmacy mean that often patients and staff need to go for another car ride just to finish getting care. Crossing the street when cars from out of town are flying by is not exactly enjoyable either.
We have space in the hospital right now that the community has already paid to be updated and is significantly under-utilized. We have pharmacy, radiology, lab, and therapy all within the hospital.
Given all the above we are going to move the clinic into the hospital. This allows us to have all the services we provide patients in one location. It allows us to get all the appropriate costs on our cost report and get our pharmacy 340B program up and running much faster. The projected cost for making three pods of clinic space in the hospital is $215,000 plus likely another $50-100,000 to set up the business office in the basement (where one of the clinic pods would go). The projections are that the first year shift WCHS between 1.2 and 2 million to the good with an ongoing annual improvement of around $900,000. While providing more convenience for the patients. My hope is that this will also allow us to offer a more robust urgent care/walk in service with extended hours and days that will further save the community money by not having to utilize the emergency room as much.
And for the record I am not planning on firing any staff, we are still trying to hire.
Thank you,
Judd Dawson MBA, DO, BSMT
CEO Weston County Health Services.
