Hospital officially awarded higher Medicaid reimbursement

As of Jan. 1, Grays Harbor Community Hospital has officially received the increased Medicaid funding rate it had been aiming for by converting to a public hospital district.

The state Health Care Authority released its revised 2015 Enhanced Ambulatory Patient Group rates on Jan. 1, which included an increase of more than 26 percent in Community Hospital’s Medicaid outpatient fee-for-service rates.

The hospital also saw a corresponding increase in its inpatient conversion rate, CEO Tom Jensen said on Friday.

Legislation passed last year accounted for 25 percent of the increase, while the remaining bump was due to the wage index of the area, Jensen said.

The hospital’s 2015 budget assumed the increase would be instituted, though until the rate was published in black and white, hospital officials didn’t know for certain that they would be awarded it.

Without the increased reimbursement, “we would have had to make drastic cuts,” Jensen said.

Through December of 2014, the hospital’s outpatient fee “conversion rate” was about 105.4 percent of the standardized statewide payment amount. The new rates bump Community Hospital’s conversion rate to about 131.7 percent — the highest reimbursement rate in the state.

The increase has been a goal of the hospital since it began lobbying the Legislature to pass the Sole Community Hospital bill. Last year, legislators added language to the bill requiring that hospitals be public to receive the designation and higher Medicaid payment rates.

As a result, Grays Harbor Public Hospital District 2 was approved by a countywide vote in August. The newly formed district chose to take over the facility by becoming the sole governing member of the already existing nonprofit corporation running the hospital, as opposed to purchasing or leasing the assets and the facility outright. The latter two options would have taken more time and money to complete.

The district was waiting for the new year to make sure that it’s operational plan would still qualify the hospital for higher reimbursement, though the Health Care Authority had not given hospital officials any reason to think, ultimately, the higher rates were in danger of not being awarded.

Hospital officials are breathing a sigh of relief, though, after seeing the rates published.

“The whole community really did pull together to make this happen,” Jensen said, citing hospital staff, legislators, nonprofit board members and a steering committee that was formed to take on the frantic time line to get the public hospital district approved. “(After seeing the rates) all I could do was be thankful to all those who made it happen.”

The next meeting of the Grays Harbor Public Hospital District 2 commissioners is set for 6 p.m. Tuesday, Jan. 27, in Community Hospital’s Conference Room C.