Health facilities bracing for cuts in Dan River Region [Danville Register & Bee, Va.]

Jan. 08--Danville health care facilities are bracing for less funding, as laid out in Gov. Bob McDonnell's proposed budget for the next two years.

The largest concern for Danville Regional Medical Center and local nursing facilities is the governor's budget not providing an inflation adjustment for their Medicaid rates, meaning Medicaid reimbursements will cover less of the costs incurred by providers as inflation eats away at the resource. The move is meant to save an estimated $324.7 million over two years.

The hospital already loses money on low-income Medicaid-insured patients, as Medicaid covers only 88 percent -- 88 cents for every dollar -- of the total cost, DRMC CEO Eric Deaton said. That's still better than the statewide average of 64 cents for every dollar of hospital costs, according to the Virginia Hospital and Healthcare Association.

Danville Regional understands the need for the state to balance its budget, and the hospital realizes it won't see increased Medicaid or Medicare reimbursements, Deaton said.

"I think the difficult part is, for us on the Southside, it probably has a greater impact than other parts of the state, as Southwest and Southside Virginia are more economically challenged," Deaton said.

About 16 percent of patients admitted to Danville Regional are on Medicaid and 7 percent don't have insurance. Reduced funding for Medicaid would mean hidden costs for the privately insured as providers try to make up the difference.

As the hospital sees fewer resources, expenses would have to be reduced, Deaton said. DRMC's largest expense is salaries and wages, and Deaton doesn't want to see jobs cut, especially as the hospital, which employs about 1,200 people, is the region's second largest private employer.

"I think we're going to operate differently than we have in the past," Deaton said.

That includes helping patients focus on follow-up care to prevent hospital readmissions and primary care to prevent the need to go to the hospital. Danville Regional already opened two primary care clinics and will open two more, in the Mount Hermon area and on U.S. 58, by the end of the year, he added.

"From a cost standpoint, we've really got to start working with our community to think about healthier lifestyles," Deaton said.

Deaton plans to meet with the governor this weekend, and the hospital administration and local doctors will meet with lawmakers as they decide on a budget. Specifically, Deaton would like to talk about how North Carolina won't pay for Medicaid care North Carolina residents receive in Virginia, even though they live just across the border, but Virginia reimburses for Medicaid care Virginians get in North Carolina.

A majority of patients at nursing facilities rely on Medicaid. Yet, the Virginia Health Care Association, which represents the state's nursing homes and assisted-living facilities, estimates on statewide average they lose $13.22 per Medicaid patient per day.

"I'm not sure how the government, the General Assembly, expects us to stay in business," said association president Steve Morrisette.

With upcoming cuts in Medicare, facilities won't be able to use that insurance for those 65 and older to offset Medicaid cuts. As the federal government matches Virginia'sMedicaid dollars, any state cut is really twice as much.

The association is asking lawmakers to add $15 million for long-term Medicaid care, which would mean $30 million with the federal match, on top of the proposed $10 million in the budget. Even so, that's still far from the $64 million in need that's projected, Morrisette said.

For Roman Eagle Memorial Home in Danville, any reimbursement reduction means either increasing charges or reducing expenses without jeopardizing quality care, said administrator Dan Setliff. About 65 percent of the facility's residents receive some Medicaid assistance.

Roman Eagle doesn't anticipate reducing staff, as it remains an efficient facility, but Setliff said the General Assembly must understand that further reductions in long-term care funding result in a hidden tax on private pay patients.

"We are optimistic and we do not feel that in any way it will adversely affect our operations," he added.

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