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HomeTown Health Managing a Critical Access Hospital HomeTown Health: (www.hometownhealthonline.com ) www.hometownhealthonline.com A Business organization.

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Presentation on theme: "HomeTown Health Managing a Critical Access Hospital HomeTown Health: (www.hometownhealthonline.com ) www.hometownhealthonline.com A Business organization."— Presentation transcript:

1 HomeTown Health Managing a Critical Access Hospital HomeTown Health: (www.hometownhealthonline.com ) www.hometownhealthonline.com A Business organization whose mission is to do whatever it takes legally, morally, and ethically to keep rural hospitals viable in Georgia: 56 rural hospital members 45 Business Partners 2100 enrolled online students HTH has 3 core competencies: Governmental Affairs Management Advisory Services On line education (http://www.hometownhealthonline.com/)

2 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals Critical Access Hospitals of Georgia Given: 35 CAH’s designated in Georgia Financial Status 4 for profits 27 not for profits 4 private not for profits Average Net Revenue $10,000,000 Lowest Actual Net Revenue Hospital A$4.5 million Largest Net Revenue Hospital B$19 million Average county size – less than 15,000

3 HomeTown Health Managing a Critical Access Hospital Two Types of Hospital Reimbursement designations Two Types of Hospital Reimbursement designations CAH – Critical Access CAH – Critical Access –Formerly 101% cost reimbursement –Currently no guarantees with CMO’s –25 beds PPS Prospective Payment System PPS Prospective Payment System –In patient Payment at 83.1% –Out Patient – APC Ambulatory Payment Classification - as low as 20%-30% of charges

4 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals are not designed to be profitable due to being cost based but rather to recover costs

5 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Cost to charge ratio EMTALA Federal Reimbursement Cuts Medicare Advantage – Privatized Medicare Overpayment Recovery Initiatives RAC’s, PERM, PEPPER, Present on Admission Indicators, OIG, Medicaid Program Integrity Georgia State Reimbursement Cuts Privatized Medicaid OIG Program Integrity 5% Retrospective Budget Cut for 2009 Budget currently in effect Ongoing ACS recoupments due to computer fixes Inability to produce a profit Payor mix Total skill set Inability to hire full skill set Depreciation unfunded CEO turnover OB not profitable 250 threshold

6 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Payor mix profitability requirements – standalone 33% commercial 12% or less self pay Virtually no opportunity for excess margin stand alone 7 year spiral for cost to charge ratio Acquire designation Then hire docs and add significant net revenue Receive $600,000 recoupment due to no cost to charge ratio update Then cut expenses Receive $600,000 recoupment due to no cost to charge ratio update Then revise Chargemaster Receive $600,000 recoupment due to no cost to charge ratio update 7th year no place to go Difficulty converting back to PPS Less than tow or three nationwide have converted Lost 100% cost reimbursement with CMO’s and privatized Medicaid

7 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Major Issues to Manage Cost to charge ratio Cost to charge ratio

8 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Major Issues to Manage EMTALA EMTALA

9 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Major Issues to Manage Federal Reimbursement Cuts Federal Reimbursement Cuts Medicare Advantage – Privatized Medicare Medicare Advantage – Privatized Medicare Overpayment Recovery Initiatives Overpayment Recovery Initiatives RAC’s, PERM, PEPPER, Present on Admission Indicators, OIG, Medicaid Program Integrity RAC’s, PERM, PEPPER, Present on Admission Indicators, OIG, Medicaid Program Integrity

10 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Major Issues to Manage Georgia State Reimbursement Cuts Georgia State Reimbursement Cuts –Privatized Medicaid –OIG Program Integrity –5% Retrospective Budget Cut for 2009 Budget currently in effect –Ongoing ACS recoupments due to computer fixes

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12 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Major Issues to Manage Inability to produce a profit Inability to produce a profit –Payor mix

13 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Major Issues to Manage Total skill set Total skill set

14 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Major Issues to Manage Inability to hire full skill set Inability to hire full skill set

15 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Major Issues to Manage Depreciation unfunded Depreciation unfunded

16 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Major Issues to Manage OB not profitable OB not profitable –250 deliveries threshold

17 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Major Issues to Manage Payor mix profitability requirements – standalone Payor mix profitability requirements – standalone –33% commercial –12% or less self pay –Virtually no opportunity for excess margin stand alone

18 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Major Issues to Manage 7 year spiral for cost to charge ratio 7 year spiral for cost to charge ratio –Acquire designation –Then hire docs and add significant net revenue Receive $600,000 recoupment due to no cost to charge ratio update Receive $600,000 recoupment due to no cost to charge ratio update –Then cut expenses Receive $600,000 recoupment due to no cost to charge ratio update Receive $600,000 recoupment due to no cost to charge ratio update –Then revise Chargemaster Receive $600,000 recoupment due to no cost to charge ratio update Receive $600,000 recoupment due to no cost to charge ratio update –7th year no place to go

19 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Major Issues to Manage Difficulty converting back to PPS Difficulty converting back to PPS –Less than two or three hospitals nationwide have converted

20 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals: Major Issues to Manage Major Issues to Manage Lost 101% cost reimbursement with CMO’s and privatized Medicaid Lost 101% cost reimbursement with CMO’s and privatized Medicaid

21 HomeTown Health Managing a Critical Access Hospital

22 So what is most important?

23 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals most critical attribute to manage is the cost to charge ratio

24 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals next most important attribute to manage is the payor mix

25 HomeTown Health Managing a Critical Access Hospital Typical Critical Access Hospitals payor mix is as follows Typical Critical Access Rural Hospital Payor Mix Payor % cost reimburseme nt % Net Revenue by Payor Weighted Reimbursement by Payor Medicare95.000%45%42.750% Medicaid95.000%14%13.300% No Pay2.000%15%0.300% Commercial150.000%26%39.000% To Break even 100%95.350%

26 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals next most important attribute to manage is the Business Office Claims Processing Benchmarks include: Accounts Receivable Bad Debt Self Pay

27 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals Self Pay must be measured as UninsuredUnderinsured

28 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals must use telemedicine to increase service diversity

29 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals must prepare for regionalization

30 HomeTown Health Managing a Critical Access Hospital Critical Access Hospitals must prepare for Loss of ICTF and UPL as state and federal government cut subsidies

31 HomeTown Health Managing a Critical Access Hospital A few Critical Access Hospitals may plan for conversion back to PPS which has never been done in Georgia

32 HomeTown Health Managing a Critical Access Hospital Regionalized Health Care Regionalized Health Care

33 Forecasts and Trends in Georgia Regionalization Regionalization –Rep. Mickey Channell describes Demographic circle – 40,000 population Demographic circle – 40,000 population Hospital net revenue $35-$40 million Net Revenue Hospital net revenue $35-$40 million Net Revenue Many hospitals will close in next ten years Many hospitals will close in next ten years

34 HomeTown Health Industry Overview _ Purple overlays illustrate regionalization (per HTH estimates) after Grants per 40,000 population pods

35 HomeTown Health Industry Overview Regionalization as supported by State Budget Regionalization as supported by State Budget The following proposals were approved for the listed amount of funding: 1. Central Georgia Regional, Forsyth 1. Central Georgia Regional, Forsyth $321,500 2. Ty Cobb Healthcare, Royston 2. Ty Cobb Healthcare, Royston $302,500 3. West GA Rural Health, Bremen 3. West GA Rural Health, Bremen $250,000 4. Spring Creek, Blakely 4. Spring Creek, Blakely $225,000 5. REACH, Greensboro 5. REACH, Greensboro $201,000 6. Three Ring Health Care, Hinesville 6. Three Ring Health Care, Hinesville $200,000 TOTAL $1.5 million $1.5 million

36 Questions or comments?


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