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Massena Memorial among five NNY hospitals receiving $22.9 million to become financially stable

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MASSENA - Five north country hospitals, including Massena Memorial Hospital, received notification earlier this week that they will collectively receive about $22.9 million to ease financial distress.

Carthage Area Hospital will receive $10.4 million, and there will be awards of $4.2 million for Massena Memorial Hospital, $2.5 million for Gouverneur Hospital, $4.7 million for Lewis County General Hospital, Lowville, and $1 million for River Hospital, Alexandria Bay, through the Interim Access Assurance Fund.

The $500 million fund awarded $250 million in grants to those safety net hospitals as a component of the $8 billion Medicaid 1115 waiver the federal government recently approved for the state. The other half, according to the state Department of Health, is for large public hospitals.

Part of Massena Memorial Hospital’s normal operations is paying into state pensions for employees of the municipal hospital. Hospital spokeswoman Tina R. Corcoran said that is just one of many reasons the hospital is experiencing a financial crisis. Another big reason, she said, is reduction in various reimbursement rates for services.

“We’ve been losing money this year,” she said. “This is a huge shot in the arm for the hospital.”

Massena Memorial Hospital received its full funding request. Ms. Corcoran said she expects the hospital to receive its first payment of those funds in the fall. The $4.2 million — which happens to be the same amount as the hospital expects to pay for pension costs this year — comes at the heels of its move toward privatization.

“As part of the DSRP you have to work with other hospitals,” she said. “Being a municipal hospital, you can’t do that. This award helps us get back on the road to recovery.”

“You can look at this as interim financing,” said Ben Moore III, River Hospital chief executive officer. “Whether we’ll use that amount we don’t know. For us, what this means is we don’t have to worry about backing off programs. We set our budget on a conservative basis. If we do better on our budget, we won’t need to draw much on that fund.”

Mr. Moore said River Hospital’s original funding request was for $1,131,939, “which was derived from the formula required in the application.” The difference of $49,579, he said, “reflects the amount that the formula said we needed in May of 2014.”

“As the award was not made until July it looks like that amount was deducted,” he said. “Hospitals had to have an average 15 days or less of cash flow measured on a monthly basis.”

If hospitals need to tap into their allocation, Mr. Moore said, they must prove to the state Department of Health that there’s a need to draw funds.

“We have to show them what’s going on,” he said. “You have to use it for normal operations.”

The Interim Access Assurance Fund money does not have to be repaid, Mr. Moore said. If River Hospital has to tap into its allocation, he said, the money may be used for primary care, emergency department and mental health service expenses.

Temporary assurance funding will “enable recipient hospitals to work toward sustainable operations and to maintain critical services to their community as they work with other partner providers to develop integrated performing provider systems eligible for (incentive payment) funding,” according to the state Department of Health.

Mr. Moore said the local performing provider system is composed of about 100 hospitals, agencies and individual providers throughout Jefferson, Lewis and St. Lawrence counties. That group as a whole submitted an application for the delivery system reform incentive payment funding.

The intent of that incentive program, Mr. Moore said, is to “develop collaborations along regional lines.” That is something local hospitals have explored throughout the past two years, first through the North Country Initiative, a six-hospital effort focused on reduction of unnecessary repeat Medicaid admissions and creation of efficiencies in health care delivery.

Collaboration is a common theme woven throughout the North Country Health System Redesign Commission, which was formed by the state Department of Health to create an effective, integrated health care delivery system for preventive, medical, behavioral and long-term care services to north country communities.

Mr. Moore said everyone is working at the local, state and national health care system levels to reduce overall costs and create a more effective approach for patients.

“The potential is huge,” he said, regarding the whole picture.

His biggest fear, he said, is if the Affordable Care Act and associated federal health care dollars are jeopardized, it could stall the local plan for improvement. The overall vision stems from the delivery system reform incentive payment program’s vision of a “medical village,” Mr. Moore said.

“That’s a concept where we’d have space on our campus and people like home care or other agencies that do follow-up, as opposed to referring people off into the region somewhere,” he said. “That way you help facilitate all of the patient’s needs. That’s a new concept; the idea is to maximize effectiveness for patients and minimize the cost of health care due to fragmentation.”

A medical village would expand on the concept of a patient-centered medical home, which exists to centralize primary care and coordinate specialty care services.

“It’s a huge challenge, and it’s going to take a lot of goodwill in the region to get this done,” Mr. Moore said. “It’s a tall order; we’re just getting started. Once you’re formed up, the worst of it is you have to have a whole different set of skills to manage this thing.”

This week’s news comes in the midst of what has not been a good year for the hospital’s finances.

MMH Chief Financial Officer James Smith recently reported the hospital had a net loss of $713,075 in May, pushing their year-to-date total to $2,023,990.

“Discharges were down considerably,” Mr. Smith said, noting inpatient discharges, which had been budgeted at 209, finished 16.27 percent below budget at 175. That’s a 16.67 percent drop over the same period in 2013, he said.

Observation visits were up 2.99 percent over the same time period in 2013, but were below budget. Officials had budgeted 82 observation visits and they finished the month at 69.

“It’s fairly comparable to what it was last year,” Mr. Smith said.

Outpatient registrations, however, finished ahead of budget by 3.07 percent, with 12,434 outpatient registrations recorded for the month.

“Unfortunately they were down in very key visits,” such as emergency room visits (14.38 percent below budget) and ambulatory surgical unit visits (31.13 percent below budget), he said.

The hospital finished May with $3.8 million in net patient revenue, 10.85 percent below budget, and other revenue came in at 45.55 percent below budget, at $169,582. That left a total operating revenue of $3.96 million.

At the same time, however, the hospital had $4.7 million loss in operating expenses and a $723,693 loss from operations, which helped contribute to the $713,075 loss for the month. That’s a 254.64 percent drop over the same time period in 2013.

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