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Published: 31 May 2019 31 May 2019

[Editor's Note: This is part 4 of a multi-series of articles covering the work session of May 14, 2019. This one covers the presentation by Gila Regional Medical Center.]

By Mary Alice Murphy, using notes by A.J. Ward

The final presentation of the Grant County Commission work session of May 14, 2019 was from Gila Regional Medical Center's Chief Executive Officer Taffy Arias and Chief Financial Officer Richard Stokes.

Arias said it was Hospital Week at GRMC. "We are holding celebrations all week. This afternoon is an ice cream social, to which you are invited at 2:30 to celebrate Gila Healthy, Gila Proud. It was developed by staff to let patients know how happy they are to see them and how proud they are to be working at our hospital." She handed out T-shirts to the commissioners.

She said she attended the New Mexico Hospital Association meeting, which had representation from hospitals large and small from across the state. "We found we had more in common than we thought. Some of the same problems."

Arias gave an update on the progress of the Level 4 Trauma designation the hospital is seeking. "We are in the year before we can be certified, but we are planning an outreach program called Stop the Blood. We will be going to schools, groups, agencies and giving them free training on what to do in case of a shooter or stabbing incident."

She noted she is serving on three different committees. "At the most recent Stepping Up Program, Peggy White, who is working now at Tu Casa, gave a presentation on Myths. She cleared up several myths that she said she had before she began to work there, and it cleared up myths for me, too. I'm proud to be part of that committee. I also serve on the Senior Advisory Committee with HMS. We work on how to help seniors and what the priorities are for seniors. I realized that most of my identity is my job. When I took the survey, I realized what it will be like when I am no longer in this job. I commend the people spearheading the committee. I'm also on the Complete Census Committee. We have to make sure we get a count of everyone in the county. All of our funding will depend on it."

In recruitment, she said the newly hired surgeon, Dr. Rosser was to begin working on May 22. The second physician hired by the hospital, Dr. Worrell, is in town looking to buy a home.

"We made an offer to a Chief Nursing Candidate, who will let us know tomorrow," Arias said. "She was very impressed with the services at our hospital and also with the staff, who weren't complaining, but were happy in their jobs."

Arias said the hospital has applied for CME (continuing medical education) accreditation. "Our first presenter was Dr. Ratliff who presented on CT angiography. Then Dr. Stinar gave a two-day class to nurses on critical care."

"Our international nurses have begun to work in the hospital," Arias said. "We have one more group starting the end of the month or first of June. More are coming. We are pleased with the diversity it brings to our hospital. And many may stay here after their contracts. It is with great joy that we welcome them."

The hospital has entered into contract with a hospital system for tele-neurology and tele-psychiatry, so patients don't have to go elsewhere for services. "We will start in-service training next month with physicians and staff. In July, we will engage staff and physicians with an anonymous survey, where they can express their wants and concerns. The Foundation is preparing for its golf tournament on June 1."

With no questions for Arias, Stokes stepped to the podium.

He said the last report approved by the board of trustees was the March report, the ninth month of the fiscal year. "We've done quite a bit of activity over the past 60 days. We had a $25,000 profit then as opposed to a $339,000 loss last year and a $1 million profit year-over-year. Our cash on hand decreased some because of the changes in reimbursement from the Safety Net Care Pool, we learned about. We made some accruals and did not make some accruals, all after vetting them with the external auditor. We are reducing accounts payable, but on a larger scale on the funding that was supposed to come to us, if we had been aware of the changes, we might have made different decisions, but we did the best we could with the information we had at the time."

"I have had numerous phone calls with the Department of Health and the Hospital Association on the changes to the safety-net-care pool," Stokes continued. "We sent out a letter, that I expect most of you have seen. How are we going to react? The changes to the safety-net-care pool were not anticipated. We weren't concerned because our costs went through that program. But as a result of the changes, the doors open up to the Non-Medicaid Disproportionate Share Program. We're investigating how we can get reimbursed from that. We also have a little project we are discussing with CMS on our decreases in volume. We filed our 2015 and 2016 reports. The net effect to us will be about $650,000 for 2015. We expect a bit more for 2016. The amount is yet to be determined for 2018 and 2019."

He said the hospital has submitted data to the Transfer DRG (diagnosis-related group) of medical care for when the hospital discharges a patient to a downstream agency, such as home health. "When we discharge the patient to home health or some other agency, CMS withholds dollars from our Medicare reimbursement. We are determining if the patient goes where we discharged them to or not.

Commissioner Harry Browne apologized for interrupting. "Can you explain the CMS rationale? It seems like the rational of pay implies that the patient is not going to where you sent them. Is that not a reverse incentive?"

Stokes said the patients have a choice to go or not.

Commissioner Alicia Edwards asked for clarification. "The patient gets discharged, you recommend they get home health, Medicare withholds reimbursement if they go to home health. If they don't go, you get some reimbursement back? It doesn't make sense, because you're not providing the home health, right?

"Correct," Stokes replied. "In my mind, it's a way to mitigate costs to the Medicare program. Going back in time, because the hospital has not availed itself of this opportunity, a mechanism is there for us to grab dollars and that's what we're going to do."

He continued and said in discussions with the state, it seems, "in my opinion—this is my opinion—that the state is pushing rural hospitals to seriously consider critical care access designation. In 2019, we will receive 21% of our Medicaid costs. The smallest hospitals at 30 beds and under will receive 75% of Medicaid costs. In dollars, we receive $3.6 million and that would give us another $9 million. We could move the hospital to that size, but we have a 10-bed behavioral health unit that may count against us. We're too busy for only 20 beds. We might be able to manage with 25 beds. All these issues have to go in front of the state to help us determine our best course of action."

Edwards said the way she understood it is that behavioral health beds are acceptable on the federal level. "Can the state make its own rules?"

Stokes said the 10 beds are in a separate sub-unit, but they are included in Gila Regional's 68-bed license. "We need to know how the state considers them and then let the board make the decision. We need to know if we can have the 25 beds and the 10-beds under a sub unit, under a separate sub provider and if they count toward critical access designation. "

Edwards confirmed that critical access is Medicare, not Medicaid. Stokes agreed.

"How is the state determining this?" Edwards asked. "Rural hospitals, particularly in New Mexico, are serving a high percentage of Medicaid patients, as well, so does the Medicaid increased reimbursement help with the Medicare reimbursement?"

Stokes said under the 1115 waiver with CMS, the state will favor the smallest hospitals, so they receive the 75 percent and 101 percent of Medicare. "In that category of smallest hospitals, you get the maximum benefit. Not only are we trying to figure out the best course of action to impact 2018 and 2019, but the new system CMS is mandating across the U.S. is what we do today affects 2021. We have to figure out how to maximize 2020 and 2021. It's a convoluted mess."

Edwards clarified that for safety-net-care pool calculations, the smallest hospital is 1-30 beds and the next is 30-and the last over 150. "You are currently licensed at 68 beds, but the 1-30 gets the best reimbursements. Is it possible to de-access the safety-net-care pool and not go critical access, and are you looking at that?" to which Stokes said yes to both questions.

"What is the status of the Rural Health Clinic piece and two more questions to go with that," Edwards asked. "The state is getting ready to increase Medicaid and Medicare reimbursements. What is your status on the Rural Health Clinic?"
Stokes said on the rural health issue, "we just signed an agreement with a company out of Plano, Texas, to guide us through the rural health clinic conversion. From the hospital perspective, within Medicare regulations, there is a cap of $81 per visit for any hospital of more than 50 beds. There is a provision within the regulations that allows a hospital of fewer than 50 beds to go not with a cap, but with its cost. We've done the calculations and that nets us roughly about a quarter of a million dollars as an RHC in addition to what we are receiving now. We have our first kick-off call next week. We should have the designation by late summer. It all depends on how quickly the state comes for a survey. We would get it all ready, schedule with DOH for a formal survey, and start with the Family Medicine Clinic first. RHCs apply only to primary care. One of the things we need to find out is what falls under the primary care umbrella. Does podiatry? Without question, family practice is primary care."

Edwards asked if rural care would make up any difference in the safety-net-care pool, to which Stokes said no. He said the hospital is receiving $3.6 million for safety-net-care pool funding and critical access would be a bit over $4 million.

"A lot of things have to be prepped and ready before you go to critical access," Stokes said. "You have to have the foundation. We're stepping through those processes right now. Right now, we will receive Medicaid at 53 percent of costs and Medicare at 62 percent of costs. As of six months ago, the safety-net-care pool was functioning as it has since 2014, but the rules changed. Without question, it has significantly changed the landscape of what we have to consider."

Edwards asked if he had received notice of the changes.

"I had one-day notice," Stokes replied, "and I think the Hospital Association had four-days notice, before the state submitted the revised changes to CMS."

Edwards said a substantial rumor has been going around the programs that GRMC was going to cut—one is OB, one is behavioral health and one is EMS.

Arias said: "It's a strong rumor. We have no plans to disassemble the structure we have in the way of programs. In fact, we want to grow programs. What the paper said is true. We pay into these programs, which operate at a loss, because we are a community hospital and the community needs this. It's more than a nicety, it's a must. We must have OB services because we are so far away from any other large hospital that provides OB services. We have to have EMS. We or somebody has to have it. There is no question behavioral health is needed in this community. Each program operates at a tremendous loss—millions of dollars. Other programs compensate. If people aren't careful about decisions being made, at some point things will have to give. It is not our intention at all to close any of these services. They are vital to the community."

Edwards asked about if changes have to be made, "are you saying you will not make changes in those departments?"

Arias replied: "We have no plans to, and that decision cannot be made by Richard and me, that comes to the board and to the community."

Stokes said the rumor got started with the letter to the governor. Edwards said it started before that, but the letter might have aggravated it.

Stokes said he tried to say in the letter to compare quality of Gila Regional with other hospitals in the region. "For what we do, we are better than those other hospitals. When I was writing the letter to the governor, I wanted to make the point that Gila Regional provides high quality care. The other point I had to make in my ask—I had to demonstrate what we already do and at what cost. We are providing these services to the community at our cost. That's why I requested a meeting, so she could understand what we are facing. We are providing services across the spectrum for the benefit of Grant County. To prove we are serious that was the reason I named those three areas. It's factual to set the foundation for why we are asking for help."

Edwards asked if he got the governor's attention. "Indirectly," Stokes replied. "I was on a call with the HSD with Russell (Tope?) yesterday, who for the first time joined the call."

Edwards agreed that everything was happening at the same time. "I'm very concerned, but it is difficult to discern where my concern should be. We need to do a better job of communicating with the Commission and the public. We have to do a better job of coming together as a community and collaborating to figure out how to address these issues. It affects everyone, all the providers, all the people who live here." She also asked about the status of the clinic in Bayard and why it was important to have a GRMC clinic in Bayard.

"It is important that we serve all our communities," Arias replied.

"They are provider-based clinics," Stokes said. "CMS reimburses at a higher rate for provider-based clinics and ambulatory-surgery clinics. CMS is phasing out some of these provider-based payments. But this would be a rural-based clinic. Senator Ramos point-blank asked me that question and why Gila Regional was creating more clinics. There's a short answer. Health care is moving to outpatient and that will continue to grow. Our business is about 70 percent outpatient, so we will be an outpatient medical provider with inpatient beds, with more going-home-the-same-day services. There are some orthopedic procedures that are required to be inpatient. Payers are pushing it. It is ever evolving. Those that don't evolve will be in trouble."

Commission Chairman Chris Ponce said it is important to look at Grant County, not nationally all the time. "We are rural, and we need to remember our people here and not always think what's happening elsewhere. The loss of that clinic hurt people in Bayard. They used it. That's what I'm struggling with up here right now. We have no clinic there now."

Stokes said the condition of the building, which the hospital owns, was unknown when they took it back. "If the architect comes back and says you can't rehabilitate that structure, then we have to look elsewhere That didn't happen yesterday. Those that pay us are pushing the outpatient services on us."

Edwards noted that it was a functioning clinic. "What you are saying is that payers are forcing you to hurt other providers in this community. That's what I'm hearing. That's what happens when you go in and replace a business that was there and functioning. We have to have rural health care, because we don't have good transportation. Older people don't want to have to change doctors. If payers are pushing you to this, then we are setting up to fail as a community health care system."

Stokes said that was not his take. "I don't think it's either/or. As rural hospitals expand their primary-care provider base, another clinic gives greater access to the population and forces all players to step up their game."

Edwards said: "I'm sorry, Richard, I don't see that. We have limited resources here. If our business model, wherever it comes from, says you have to continue to cut. Things you're talking about are part of people having to adjust. It doesn't seem that all people are set to rise."

Stokes said at another hospital he was familiar with, a physician got mad, left the hospital and set up his own urgent care center. "He made us adjust our practices to make our hospital better. His thrived right in the shadow of the hospital. He took some of our patients, but because it forced us to get better, it attracted some that were going outside the community."

Arias said: "There are a lot of things that we can do better to work together that will benefit the community. Our hospital has been forced to do things because of lack of participation by other entities. I think once we have a lively discussion and a planning session, we will be able to work out some of those barriers that are keeping us all in a situation we don't want."

"Amen, Sister," Edwards said.

Browne asked about collections and whether it has gone up.

"It hasn't risen, because we are running it through our P and L (profit and loss) system," Stokes said. "When we remove that, it is between 31 and 32 percent. As we do the clean up, it's helping. We're staying at 30 percent, but we are collecting a lot more of those 30 percents."

Browne said as he understands it, as they clear up bad debt, it depresses the totals.

Stokes said his goal is to have all the old accounts receivable cleaned up by the end of the fiscal year at the end of June.

Browne asked about the one-time accruals because of the safety-net-care pool changes. "How much would that have been without the accruals?"

"About $3 million less than what it is now," Stokes replied.

"So, $2 million down instead of $1 million up," Browne said. "That is sobering."

"That is why it is important, we have to keep up with day-to-day operations, but we have to keep abreast of things that aren't publicized and take advantage of them. That's why the two programs we are going after are things that have been available, but we haven't taken advantage of them or never implemented them at Gila Regional. It's good that they are available, but it's bad we're having to go back all the way to 2015 to try to recoup some of this money."

Browne said he wanted to conclude by saying it's too bad it's happening, and that communication can always improve, but how much he appreciates the time Stokes and Arias spend each month letting the commissioners know what the hospital is facing. "I know it's a big chunk of your day, but I truly appreciate your coming to talk to us. We didn't used to have this much information given to us."

Edwards said she absolutely agreed. "It was not my intention to say that your reporting wasn't correct. Harry is absolutely right. We've never gotten this much information before."

Arias said: "I hope you can tell how much Richard's report shows how the hospital is digging, scratching to find everything they can. There's too much at stake. We are very serious about our commitment. This is our community. We have a professional and a personal commitment to make sure this community is successful."

The next article will go into the budget process.