Olympic Medical Center budget anticipates 60 percent Medicare cut

The Olympic Medical Center Board of Commissioners has approved a $221 million budget for 2020, including a 1 percent levy increase.

The commissioners unanimously approved the budget, which includes anticipated 60 percent cuts to Medicare reimbursements for off-site clinics, on Nov. 20.

OMC CEO Eric Lewis told the board earlier this month that the budget calls for recruiting more physicians and other health care professional, continued expansion of primary care and improvement of Emergency department wait times.

Olympic Medical Center had sued over the first 30 percent of those cuts and a federal judge ruled the Trump administration didn’t have the authority to implement those cuts. The Centers for Medicare and Medicaid Services have now implemented 60 percent cuts and are expected to appeal the decision.

“(The lawsuit) is going to take awhile to play out,” Lewis told the board. “Certainly a year from now we could still be talking about the lawsuit.”

The budget forecasts $221 million in revenue and $218 million in expenses, or revenue of more than $4.3 million, said COO and Chief Financial Officer Darryl Wolfe.

Officials believe there will be a 1 percent increase in inpatient volume and a 2 percent increase in outpatient volume, with some of the most increased volume at physician clinics, the Sequim cancer center and imaging services.

In approving the budget, the board also approved many price increases across the hospital.

“In 2018 we did a pretty extensive pricing survey and what we found is that Olympic Medical Center, in nearly all cases, is in the bottom quartile for what we charge,” Wolfe said.

This means there will be a 5 to 7 percent increase in inpatient prices, an 8 percent increase in Emergency department prices, a 5 percent increase in home health prices and a 5 percent increase in pharmacy prices.

Prices at physician clinics will increase by less than 1 percent.

“We found our pricing (for physician clinics) was still on the low side, but closer to market,” Wolfe said.

The board approved the annual tax levy increase of 1 percent, or about $46,595. That brings the total taxes levied up to $4.7 million, or about 2.5 percent of the total budget.

That tax levy increase will mean the levy rate will decrease from $0.50 per $1,000 assessed valuation to about $0.47 per $1,000 assessed valuation, according to the Clallam County Assessor’s Office, emphasizing that reduction is an estimate.

The budget includes about $16.3 million in capital spending, including about $700,000 in surgical services, $350,000 in sterile processing, $141,000 in surgical services, $130,000 in Olympic Medical Physicians clinics and $130,000 for the lab.

It also includes $1.9 million in the Cancer Center, $1.5 million for a remodel of Central services, $1 million for short stay upgrades and about $2.3 million for routine projects.

Wolfe said the capital costs are “still fairly high,” even after cutting the $30 million in requests in half.

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