COVID-19 Mandates and Cost Recovery Challenges Challenge Michigan’s Rural Hospitals

Brian Long, president and CEO of Memorial, said the hospital and other similar hospitals take a bath with private insurance companies because they simply don’t have the bargaining power of larger systems like Ascension or Beaumont.

“We usually get less reimbursement than city systems,” Long said. “We are negotiating with a number of payers, and we simply cannot get clear and unambiguous information from them. We know our reimbursement is impacted every day. We seem to see one-way changes from Blue Cross every day. private insurers were where we made 75 percent of our money, but now we are starting to lose. “

Blue Cross Blue Shield of Michigan accounts for 25.4 percent of Memorial’s revenues and other insurance companies 11.5 percent.

However, BCBSM said in a statement from Crain’s that the Detroit-based insurance company has supported health systems and doctors’ surgeries with $ 687 million in advance payments through June 2020 to ensure that organizations can continue operations and investments with predictable returns.

And the insurer denies the underpayment to Memorial.

“We are currently in good faith negotiating compensation with Memorial Hospital,” the statement said. “Blue Cross’s approach is not to highlight differences in the media, but to resolve them with the local health care system during our negotiations. Our goal, as always, is to obtain fair and reasonable compensation that promotes affordable and quality care for our members. “

In a second-floor hospital, Nemeth demonstrated how easily hospitals lose money to lower insurer benefits by asking a nurse to describe a patient in bed 46: a patient with severe cellulite, a bacterial skin infection, from a cat bite. The patient required a hospital stay for prescription antibiotics to make sure the infection had subsided and the patient did not lose an arm.

For a patient who has bitten a cat, Nemeth said, Memorial will receive an “observation” rate, which pays about half the traditional inpatient rate.

“This patient met with an orthopedic surgeon and received antibiotics for two days,” Nemeth said. “They get the same care as the patient on the next bed, but we get half the price.”

The most recent change in follow-up compared to inpatient reimbursement occurred in August for BCBSM.

The reason BCBSM profits are so important is because the government programs that account for the bulk of Memorial’s revenues – Medicare accounted for 45.7% of its $ 219.1M revenue last year, and Medicaid – 16% are constantly losing money.

Of the $ 26.7 million Medicare received Memorial last year, he lost $ 8.3 million. Of the $ 28.3 million received from Medicaid, Memorial recorded a loss of $ 9.9 million.

Brian Peters, CEO of the Michigan Health and Hospital Association of Okemos, said rural Michigan is aging and poorer, putting more pressure on rural hospitals like Memorial.

“It is very difficult, if not impossible, for Memorial to make a positive return on Medicare,” Peters said. “It wasn’t a problem 30 years ago when Medicare had fewer patients, but Medicare funding has not kept pace with older and sick rural communities.”

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