Classification change brings health system more Medicare funds

Susquehanna Health recently received good news — its Medicare reimbursement will continue to be funded at levels comparable to other area hospitals — at least for now.

The adjusted rate of $4.8 million represents a 7 percent increase and includes the period from October 2007 to September 2008.

Health system officials said they have lobbied hard with the federal government in an attempt to receive what they thought was Williamsport Hospital’s fair share of funding under the Medicare wage index.

“These additional funds are critical to assuring our ongoing ability to provide our caregivers with competitive wages and salaries and add the appropriate staff members to key service areas,” Susquehanna President and CEO Steven P. Johnson said. “Moreover, comparable reimbursement for our Medicare costs allow Susquehanna Health to fulfill its overall commitment to the region.”

The additional funding, he added, will allow for the continuation of such services as the Community Health and Dental centers.

It also will allow the health system as well as the hospital to maintain competitive wages and benefits, reimburse previously diverted operating funds and boost overall operations.

The federal government’s designation of Williamsport Hospital as an isolated hospital in a single Metro Statistical Area (MSA) has resulted in its receiving less Medicare reimbursement over the years than other area health care institutions.

For example, Evangelical Community Hospital in Lewisburg received a 6 percent greater reimbursement rate for patient medical services than Williamsport simply because its Medicare payment classification is included as part of the Harrisburg-Carlisle MSA and its higher wage index.

However, with recognition as a Section 508 hospital by the Center for Medicare and Medicaid Services (CMS), Williamsport Hospital was made eligible for the special funding, according to health system officials.

The so-called Section 508 money comes from a supplementary fund temporarily paid to hospitals that receive less money than others.

Johnson praised the lobbying efforts of U.S. Rep. Chris Carney, D-Dimock, as well as U.S. Sens. Arlen Specter, R-Pa., and Robert Casey, D-Pa., to help secure the funding.

“I am proud to support our regional hospitals,” Carney said. “Approving this bill was a step in the right direction.”

As yet, there is no guarantee that funding will go beyond September, however.

“Health system officials will be working with other Section 508 hospitals to again implore CMS to extend this funding, similar to other payment formula adjustments that have been made in past years,” said Charles Santangelo, chief financial officer.

“CMS has been studying alternatives to the current payment methodology, but has not made any decisions regarding a new system or when such a new system would be implemented. The current payment formulas, which treat the Williamsport Hospital and Medical Center in an inequitable fashion relative to other area hospitals, namely Geisinger and Evangelical, will continue until a new system is developed and implemented by CMS.”