Hospital officials believe it's a long shot, but they're asking for help in seeking changes that increase LMH's Medicare reimbursements.
As Lawrence Memorial Hospital administrators watch congressional cost-cutting shrink Medicare reimbursements, they also face an unusual problem that's shutting the door on up to $1 million each year for the hospital.
The Health Care Financing Administration (HCFA), which oversees the federal Medicare insurance program, allows certain hospitals in metropolitan areas to receive higher reimbursements for treating Medicare patients.
The catch is that the hospitals allowed the higher rates must pay employees at least 8 percent more than other hospitals in the same metropolitan area to be eligible for the higher reimbursements.
In LMH's case, because it is the only hospital in its HCFA-defined metropolitan area, there are no other wages to rate it against.
Simon Scholtz, LMH chief financial officer, said only three other hospitals in the country face the same dilemma.
There are four metropolitan areas in Kansas: Douglas, Johnson, Sedgwick and Shawnee counties.
The desired Medicare reclassification could save LMH about $1 million a year, said Scholtz, who has talked with representatives from the offices of U.S. Sen. Sam Brownback, R-Kan., and Rep. Dennis Moore, D-Kan.
Scholtz said the wage index is an arbitrary number HCFA picked because too many hospitals in metropolitan areas were receiving the increased Medicare reimbursements.
"It seems to me that it's a quirky thing, because there's only four hospitals in the country that fit in that category," Scholtz said. "... It's a long-shot."
Hospitals and other health-care institutions across the United States have been receiving decreased Medicare payments following the Balanced Budget Act of 1997. According to estimates from LMH financial officers, the hospital will see its share of Medicare payments shrink $4.7 million throughout the five-year period designated by the Balanced Budget Act, from 1998 to 2002.
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