U.S. Rep. Derek Kilmer has introduced legislation that he said would halt the federal government’s cuts to Medicare reimbursements for off-campus clinics, helping hospitals such as Olympic Medical Center, which faces a $3.4 million loss of revenue annually as a result of the cuts.
The Gig Harbor Democrat toured OMC’s Sequim campus Saturday, May 11, where he said the Centers for Medicare and Medicaid Services’ new rule is “backward” and “makes no sense” in rural areas.
The Centers for Medicare and Medicaid Services (CMS) implemented the “site neutrality” rule in November, a move that cuts Medicare reimbursements by 60 percent at clinics that are more than 250 yards away from a hospital’s main campus.
“I could understand a rule like this in a densely-populated urban area with multiple health care providers,” Kilmer said. “This makes absolutely no sense in a rural area.”
Last week, Kilmer and U.S. Rep. Elise Stefanik, R-NY, introduced the Protecting Local Access to Care for Everyone Act to fight the new policy.
The House Appropriation Committee also included language in the Labor Health and Human Services appropriations bill expressing concern about the site neutral policy and urging CMS to reconsider the rule.
OMC Commissioner John Nutter told Kilmer that the impacts of the cuts were immediate. OMC has postponed $15 million of planned construction and is facing an annual loss of revenue of about $3.4 million.
OMC stands to miss out on $47 million over the next decade if the rule sticks.
Nutter said OMC had planned to hire eight primary care and specialty care providers this year, but now it is unable to do so.
He said some patients will need to travel off the Olympic Peninsula to receive care OMC had planned to provide locally. Medicare still will be paying for those patients, he said.
“There’s little or no dollar savings on it, other than we are taking economic resources out of Clallam County and inconveniencing our population,” Nutter said.
Chief Physician Officer Dr. Josh Jones told Kilmer that OMC’s Sequim campus provides care that patients cannot get anywhere else in the area and that private groups would not be able to afford to provide those services.
Last year, there were 80,000 patient visits to the Sequim campus, where there are 26 physicians and 17 advanced practice clinicians.
The Sequim campus provides primary care and integrated behavioral health services, sleep medicine, neurophysiology, orthopedic surgery, cardiology, pulmonology, women’s health, neurology, eurology, gastroenterology, radiation, medical oncology, pediatric services and others.
“This policy … has delayed our plans to expand those services,” Jones said.
Kilmer also heard from a man who recently traveled to Sequim to see his 91-year-old mother. She recently had a medical incident and needed care at Olympic Medical Center.
Kevin Mitchell of Iowa Park, Texas, told Kilmer he was pleased with the care his mother received both in Port Angeles and at OMC’s Sequim campus. It wasn’t until he expressed his gratitude to administrators that he learned about the Medicare cuts.
He said it’s an issue that’s not being talked about.
“I wasn’t aware of what Medicare was doing nationwide,” Mitchell said. “I want to get hold of my representative when I get back to Texas. Mac Thornberry will hear from me.”
Mitchell said not only does he want his mother in Sequim to have the best care possible available to her, but he’s concerned about what the policy means for rural areas in Texas and across the country.
“It’s a policy that completely sticks it to rural areas,” Kilmer said. “I was born (at OMC), so I take personal umbrage at this.”
Jennifer Burkhardt, chief human resources Officer at OMC, said she hopes the new legislation could help provide a delay as OMC’s lawsuit against the federal government moves through the courts.
Olympic Medical Center is one of three hospitals named as plaintiffs in the American Hospital Association’s lawsuit filed in December that alleges CMS exceeded its authority by implementing the rule after Congress had already passed a law that allowed hospitals with off-site clinics to keep the higher reimbursement rates.
The hospitals filed a motion for summary judgment in February. In March, the federal government filed a motion to dismiss. The most recent brief was filed April 19.
A similar lawsuit involving nearly 50 hospitals across the country was filed earlier this year and also is awaiting rulings on a motion for summary judgment and a motion to dismiss.
“In the next two to three months we hope to get a ruling on the summary judgment motion, but there will likely be an appeal even if we prevail,” Burkhardt said. “We are looking at probably 18 months at the earliest for some kind definitive ruling and it could be longer than that.”