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NRMC board purchases land and building
It's no secret Nevada Regional Medical Center has been struggling financially; it needs patients and income.
So why did NRMC's board approve the purchase of the medical clinic at 627 S. Ash along with the adjacent lots and is looking to purchase Dr. Lovinger's clinic, next door, at 625 S. Ash, sometime next year?
It all has to do with patients, income and Public Law 95-210.
Adopted in 1987 and known as The Rural Health Services Act, Public Law 95-210, among other things, has special provisions for rural health clinics.
Consider this example of two adjacent clinics, each with a physician serving a Medicare patient. Assume the diagnoses, treatment and prices are the same. But because of PL 95-210, the Center for Medicare and Medicaid Services -- the governmental arm which administers payments and billing -- pays the non-rural clinic $100 while it pays the one with a rural health clinic designation, $250. A private pay patient is charged $100.
"The departments yielding the highest margins within NRMC are our other three rural health clinics in Rich Hill, Sheldon and the NowCare clinic," said Kevin Leeper, NRMC chief executive officer.
"The reason the hospital does not move existing or new physicians and services into the NowCare clinic and increase the volume of that rural health clinic payment differential is because the NowCare clinic is currently operating at near capacity," added Leeper.
One other thing. In the upcoming election, no matter who is elected president, changes arriving within five years, already agreed to by both major parties, create a financial incentive for hospitals and doctors to have a close relationship with each other. In 2012, 45 percent of all physicians were employed by a hospital or health system and this is on the rise.
Purchasing the two existing clinics and having space for further buildings and parking "will yield NRMC at least 2.5 times the reimbursement it currently receives for like services inside the hospital walls," said Leeper. "Purchase of the property has a payback return of less than three years and will greatly improve cash flows for our physician and nurse practitioner practices."
More of the same, noted Leeper, or doing nothing fails to serve patients, provide income or lay the foundation for growth.
And in case you are wondering why payments are 2.5 times greater at a rural health clinic, it has to do with cost containment. CMS knows one factor driving up medical costs is patients who may not have, or rarely visit, a primary care physician but receive their healthcare at the far more expensive emergency room. This is fairly common among the 19 percent of Americans who live in rural areas.
By paying a significantly higher rate, the 11 percent of doctors who serve in such areas and the 35 percent of this nation's hospitals, which are located in rural areas are given a strong financial incentive to reach out to such people. Providing rural patients with primary care dramatically lowers government payments for misuse and overuse of the emergency room. It turns out those significant savings far more than offset the cost of higher payments made to rural clinics.
"We are very grateful for the opportunity that Drs. Lovinger and Beard have given us through the orchestration of ownership of these buildings(s) ... 627 now and 625 in 2017," continued Leeper. "We will be moving all qualifying outpatient physician services (those designated as primary and behavior care) to this site from the hospital over the coming weeks, in addition to opening a behavioral clinic on Saturdays, beginning Nov. 12."
Dr. Ron Jones resumed his pediatric practice at the newly designated Primary Care Clinic on Oct. 3, while on Nov. 12, Dr. Allison Smith will begin seeing outpatient psychiatric patients of all ages on Saturdays at the 627 S. Ash location. On Feb. 1, Dr. Vickey Edge, internal medicine and pediatrician will begin practicing at the Primary Care Clinic as well.
The financial report, reviewed more quickly in Tuesday's board meeting but in detail at Monday's finance committee meeting, showed a one-month loss in September of $670,817.
Mike Harbor, chief financial officer highlighted the factors for the loss including fewer acute care admissions, fewer surgeries, deliveries and inpatient days in the Behavioral Health Unit combined with a third payroll in the month, lower collections and high health insurance claims by employees.
For the first quarter of its fiscal year, NRMC had a net loss of $1,371,983 versus a budgeted loss of $1,205,602.
Harbor explained how funding for the purchase of 627 S. Ash and the seven lots came from internal borrowing while the purchase of 625 S. Ash would likely come from a loan, either from a local bank -- contact has been made with several -- or a United States Department of Agriculture loan. A bank loan might be at a higher rate of interest but take far less time to obtain.
Steve Branstetter, director of the long-term care unit -- Moore Few Care Center and Barone Alzheimer Care Center -- had positive news.
"For the month of September we had a gain of $13,606," said Branstetter. "Moore-Few Care Center had a gain of $1,066 and Barone had a gain of $12,540. The census at Moore-Few was 76 on a budget of 75 while at Barone it was 37.67 on a budget of 37. By week's end, Barone anticipated having a census of 40, which is its capacity. Year-to-date, long term care had a net gain of $69,493."
Branstetter stated that the two facilities had state surveyors in their buildings for their annual survey. He thought it likely they would have few negative tags and it was likely they would maintain their status as a 5 STAR facility -- the highest quality level -- as defined by Medicaid.
"Earlier this year when we were short of nurses, we resolved to work hard at growing our own staff," said Branstetter. "Currently, we have six students in the certified nursing assistant class and we are providing financial aid and flexible hours for several of our licensed practical nurses to continue their education towards becoming a registered nurse."
In his report on capital items, Branstetter noted the dining room at Moore-Few would have installed by month's end nine aluminum blinds and one cellular shade in the dining room. Barone Care Center is scheduled to get all new windows in its facility but is waiting on a start date. Both facilities will have a lighting retrofit later in the year.
In capital expenditures for the hospital, the board approved renewal of a three year contract, at $29,850 per year, for computer software which tracks and reports all incidents -- such as a patient fall -- and provides risk assessment. On occasion, accidents happen but failure to report them in a proper and timely manner results in severe governmental penalties. Since this software was first purchased, those problems have gone away.
In his CEO report, Leeper noted the resignation of Dr. David Taylor as head of psychiatry for the New Beginning's Behavioral Health Unit and Dr. Brian Braumiller's agreement to take that position; he will start next month. Dr. Taylor's two back surgeries have limited his ability to continue what needs to be a full time responsibility.
Nurse practitioner, Sonja Albright, is making rounds on Tuesdays and Thursdays for Dr. Lovinger's nursing home patients. Lovinger reviews and makes the final decision on all changes of care.
"This team concept is presently being used in many other places," said Leeper. It allows the physician to make best use of his skills and time while providing timely and consistent care to patients. Our goal is to expand this by having nurse practitioners working with other doctors."
Last week, CMS gave authorization for Carla Reed, certified diabetic educator and nurse practitioner, to bill for the hospital's diabetic education program.
As noted above, Dr. Allison Smith will soon be seeing patients on Saturdays while her husband, Dr. Ian Smith, an internal medicine physician has expressed interest in providing services at NRMC when he is free next year.
The New Vision short-term substance abuse treatment program has begun to serve patients for three days inpatient and then make necessary referrals depending on patient needs.
Part of the 1996 Health Insurance Portability and Accountability Act is a requirement that admissions be conducted in private. Since NRMC's admission's area does not fully meet that standard, the entryway and lobby of the hospital along with part of the emergency department will be remodeled in November.
With board members Bill Denman and Larry Bledsoe completing their terms and retiring at the end of this calendar year, the board has found two new nominees whose names will be made public when they are presented to and voted upon by the Nevada City Council at their November meeting.
Said Leeper, "The key to turning around this hospital is to gain the confidence of this community by providing them with a mix of general practice and specialty physicians along with the range of services people commonly need and to do that well on a consistent basis. I understand when trust is lost it's hard to get it back but I also know when we do a better job of serving this area, the income will follow, and that's what we're committed to do."