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By Mary Alice Murphy

Gila Regional Medical Center Chief Executive Officer Taffy Arias and Chief Financial Officer Richard Stokes, after talking to their hospital personnel about the proposal to change Gila Regional to a critical access hospital, spoke to media representatives today.

"We wanted to give you a heads up about decisions made by the Board of Trustees after their executive session last Friday," Arias said.

She gave a brief overview of what she came into 2½ years ago when she took the position as CEO of GRMC.

"My first task was to improve the financial status of the hospital," Arias said. "I got here in June 2017, when it was reported that the hospital had a deficit of more than $6 million. There have been some modifications on that number since then. But during my first few weeks here, I was told 1) we have that deficit of $6 million; 2) a request for proposal had been issued on the Cancer Center and the physician group in place had been given 90 days of notice that their contract would not be renewed. The contract had been awarded to the University of New Mexico Cancer Center, but not yet negotiated, and there would be 91 days without cancer services; 3) the board had approved an upgrade to the electronic medical records system, where so many things can go wrong; and 4) because of the financial status of the hospital, the Grant County Commission had decided to look at options for Gila Regional, ranging from connecting to an academic institution to selling the hospital to uncertain what to do.

"By April 2018, we had begun a financial turnaround," Arias continued. "We were allowed by the commissioners to present a strategy on how the hospital could be financially solvent."

One of the possibilities presented at that time was to go to critical access status. "I, for one, had misconceptions about what a critical access hospital meant. The commissioners allowed us the opportunity to become financially solvent and to remain independent."

Stokes knew what becoming critical access would mean because he has served in critical access hospitals and had a good grip on what critical access is and how to get there.

"Last year, I had doubts it would work," Arias said. "Then something happened from a Thursday to a Friday, literally overnight. A decision was made on Thursday that would impact us terribly by Friday because of our size. We are not a small hospital with less than 25 beds, we're a tweener, a medium-sized hospital. We were a 26-100 bed hospital, with other sizes being 101-200 and over 200 beds. We were hit by bed size, not by activity. What does critical access look like for Grant County?"

Stokes said he had continued to ponder critical access. "The state of New Mexico has made it clear through their actions that things as they were in the past are not happening today. With their decision, we had no time to react to the change, which would cause the hospital a loss of about $9 million. The state is essentially telling us Gila Regional has to do what it has to do to survive. We at present receive less reimbursement than we would as a critical access hospital. Gila Regional has the opportunity to go to critical access designation."

"I've been here two years, as of Tuesday," Stokes continued. "During that time, we haven't had close to 25 inpatient beds filled. We average 18 a day. All insurance payers across the country and in New Mexico are making it difficult to admit a patient to our inpatient beds and that trend will continue. Half of our patients are Medicare patients.

"When I say critical access, I like to say the critical access reimbursement system," he said. "We've had questions about what will happen to the ICU, the ER, OB. We can continue to do all of them. We can continue to do whatever the Board wants us to do. There are no limitations on the types of services GRMC can provide. Specialty services can be critical access. Larger, in terms of revenue, hospitals with more services can be critical access. The reimbursement system, by our calculations, if we were critical access could bring us more revenue, from $4 million up to $5.8 million more. Because it's a reimbursement system. It pays us 101 percent of our cost. Currently Medicare pays us 67 percent of our cost, but if we do critical access, Medicare will pay us 101 percent of our allowable costs."

Internally, the hospital has to understand how to monitor the costs among the buckets of Medicare, Medicaid, commercial and self-pay, he said.

"We have about 50 percent Medicare, 24 percent Medicaid, 23 percent commercial and the rest is other ways of paying," Stokes said. "Critical access is a CMS (Centers of Medicare and Medicaid Services) designation. So that's the good side."

He said last week when he was in Santa Fe for Grant County Day, he spoke with Department of Health Cabinet Secretary Kathyleen Kunkel. "I recommended to her and asked if the state would be willing to pay cost-based reimbursement for critical access hospitals for Medicaid reimbursement."

Arias said in their conversations with staff, they often asked the question what the impact would be on their jobs. "The impact would be zero. The jobs will continue. The designation doesn't change our services. It doesn't change anything. I will tell you that we, as an organization, are looking very closely at our costs. We are looking at our operations to make sure everything moves smoothly. We could be one (a critical access hospital) today and no one would ever know."

The Daily Press asked about the behavioral health unit.

Arias said those are different issues. "Our board has to come to alignment on whether services such as the BHU and ambulance, which both lose money, are necessary for the community whether they lose money or not."

"What we are focused on is getting full reimbursement for our cost of services," she continued. "Of course, next year, the rules could change again. We do know that the $8 million to $12 million that we were getting in past years, we'll never get again. The board after executive session at Friday's meeting gave us direction to prepare for critical access. We are preparing now."

Stokes said the first step will be to ask the state to lower the hospital's license to 25 beds, "actually 35 beds, because the 10 beds of the behavioral health unit does not count into the critical access number. Then we will fill out CMS Form 855, which gives CMS notification of our intention to go to critical access."

"The board instructed us to prepare the form, but not yet to submit it," Stokes said. "We are also looking at our Chargemaster system, because with 50 percent of our billing being to Medicare, we have to determine what services they mostly access. Then we will lower our outpatient charges to make them more affordable and increase our inpatient charges, which does not affect Medicare beneficiaries. We are doing an analysis on this."

Arias gave an example: "Say there is a higher rate of X-ray usage for hip fractures. We will make it more affordable for the common requests."

"We already plan to roll out a new payment system in the second quarter for cash-only payments," Stokes said.

Arias said as soon as the board gives the go-ahead to submit the Form 855, "there will be a six to nine-month lag until they say: 'Tag, you're it; you're critical access.' During that lag time we will reassess our billing because Novitas (the Medicare contractor responsible for paying Medicare claims) has to put it into the billing system. That will take about three months. Then we will have to cancel all bills since the beginning of critical access process and resubmit them using the new critical access identification number. That will result in a higher reimbursements to GRMC."

Arias said critical access designation includes stipulations for not more than 25 beds. "Also, average stays cannot be longer than 96 hours. We're below that now. None of this happens until the board tells us to submit. We have also met with the commissioners to tell them about this proposed change. We have met and are meeting with employees. We went to every department. They were more concerned with things we are doing to improve operations. We greatly appreciate the conversations with them. The most common question was 'what is the impact on services.' Critical access designation will change nothing. In the future, if services change, it will be because of operational issues."

She noted that right now, there is a lot of money in the state, "but rural health is seemingly not a priority."

"It's a disgrace at the state and national levels," Stokes said. "All the politicians talk about how we need more behavioral health services, but there is no action."

Arias said the level of behavioral health services needs to grow to include not only adults, but also kids and adolescents. "There is lot of talk, but no action."

Stokes said the behavioral health unit at Gila Regional loses about $1.2 million annually.

"But we want you to concentrate on critical access," Arias reiterated.

She noted that Commissioner Alicia Edwards put together a committee to talk about the health needs of the community and how to meet them without duplication. "We are in talks with HMS, Silver Health Care, and Dr. Robinson's Southwest Bone and Joint. Discussions are ongoing."

She said behavioral health is a huge issue in the community. "Grant County has, in the state, the highest level of adolescent and youth mental health needs."

"If we want to continue with the BHU and EMS services," Stokes said, "critical access reimbursements will help. It's the first thing to do."

He said the board had voted unanimously to prepare the Form 855. "It affects only Medicare charges."

As a side note, on February 26, GRMC will conduct a mock survey for Rural Health Clinic status for the primary care office. The mock survey will precede the formal State inspection for rural health clinic status. "Once we complete the formal survey, we will wait for about four months for the state to designate our primary care clinics as rural health clinics. Once they are rural health clinic designated, Medicare and Medicaid will reimburse for the cost of each physician visit at cost. Furthermore, critical access designation will stabilize the core of our costs in the hospital. We will not be the largest critical access hospital in the United States, but GRMC will be toward the top," Stokes concluded.

Live from Silver City

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