ROCK SPRINGS — Memorial Hospital of Sweetwater County (MHSC) CEO Irene Richardson garnered unanimous support from the board to pursue obtaining a Medicare Critical Access Hospital (CAH) Designation, which could lead to the hospital receiving millions of dollars in Medicaid reimbursements every year.
During the MHSC Board of Trustees meeting this afternoon, the board listened to Richardson explain why seeking this designation would benefit the hospital and asked the board to approve a resolution authorizing the hospital to move forward with the application process for a CAH designation.
Currently, the hospital is considered a stand alone perspective payments system (PPS) hospital. Under this designation, when Medicare reimburses the hospital for its charges it only reimburses the hospital for a certain amount. On the inpatient side the reimbursement is around 50 percent and the outpatient reimbursement is around 24 percent, Richardson explained.
However, hospital officials recently reached out to the accounting firm CliftonLarsonAllen LLP and asked them to look at future projections. After reviewing the hospital’s finances, CliftonLarsonAllen representatives discovered the hospital already operates like it has a CAH designation. The payment system for the CAH designation is different than a PPS and is based on costs.
Based on CliftonLarsonAllen’s initial review, they discovered the hospital should be getting millions of dollars in reimbursements on the cost based reimbursement CAH system. However, in order to obtain this funding, the hospital must apply for its designation to be changed and must meet certain criteria, including being a Medicare participating hospital, being located 35 miles from the nearest hospital, having more than 25 inpatient beds at any point in time, maintaining an average length of stay of 96 hours of less for an annual average, and having a 24-hour emergency room, Richardson said. The hospital meets all of this criteria already.
This is something that would help the hospital for many years if it can successfully obtain the designation and CliftonLarsonAllen strongly encouraged Richardson to pursue it. The leadership team and medical staff are also in favor of pursuing the designation.
“CliftonLarsonAllen’s estimate on the low side would be about a $9 million benefit to our hospital per year. On the high side anywhere from $14 to $15 million per year benefit,” Richardson said.
“I think it’s something we definitely need to pursue,” Richardson said. “I think that this is something that will help our hospital move into the future.”
The resolution only allows for the pursuit of the designation. Should the hospital be successful, the board would need to approve the designation. The application process could take six to 12 months to complete. For now, the board will wait and see what happens.