Porter Medical Center asks regulator for 3 percent spending hike

<p> MIDDLEBURY &mdash; The Green Mountain Care Board this week reviewed a proposed fiscal year 2015 Porter Medical Center (PMC) budget of $74,323,358, representing a 3.3-percent increase in spending. The state health care regulator is scheduled to decide within a few weeks whether to accept the budget or request that Porter make changes to it.</p><p> The Porter budget proposal reflects, among other things, a bigger commitment in helping opiate addicts; the acquisition of a local podiatry practice; and $4 million for a variety of capital purchases, including information technology software and hardware, a new boiler, and mammography equipment.</p><p> PMC is requesting from the Green Mountain Care Board (GMCB) a budget-to-budget net revenue increase of 4.1 percent, related to the ramped up suboxone program for opiate addicts, the podiatry practice, existing services and an anticipated bump of 0.5 percent in state and federal funding. Net patient revenue projections include payments hospitals receive from patients, government and insurers to pay for patient care.</p><p> Porter is submitting a request for an overall rate increase of 5 percent for the services it dispenses, though officials said it will not be a blanket increase; the fees for some hospital procedures will go down.</p><p> &ldquo;Our budget is submitted on time, under the criteria established by the GMCB and well within all of the limits that they set,&rdquo; said Ron Hallman, Porter&rsquo;s director of marketing and communications. &ldquo;We are ending this fiscal year in an overall strong financial position.&rdquo;</p><p> The PMC budget encompasses Porter Hospital and the Porter network of physician practices. It does not include Helen Porter Healthcare and Rehabilitation Center, which budget is approved separately.</p><p> The GMCB is in the process of reviewing all 14 state hospital budgets (the board had scheduled the PMC budget review on Wednesday, Aug. 27) and will render a decision on the requests by mid-September. But the board&rsquo;s early feedback on the spending plans has been positive. Al Gobeille, chairman of the GMCB, declined comment on the PMC budget proposal as it was still under review by his panel.</p><p> Preliminary data submitted by the 14 hospitals in late June showed the average requested total increase in net patient revenue for fiscal year 2015 is 2.6 percent. Last year, the board approved growth of 2.7 percent &mdash; the lowest increase for hospitals in at least 15 years.</p><p> Steve Ciampa, PMC&rsquo;s vice president of finance and chief financial officer, said the latest financial returns provide further evidence of Porter&rsquo;s return to strong fiscal health following some tough years. He said ongoing state and federal health reform efforts compounded by unpredictable Medicaid and Medicare reimbursements are making financial planning more difficult for providers.</p><p> &ldquo;We&rsquo;re excited to end this (fiscal) year (Sept. 30) with probably the strongest balance sheet and financial condition in perhaps the organization&rsquo;s history,&rdquo; Ciampa said. &ldquo;We&rsquo;ll finish with somewhere between 80 and 85 days of cash on hand.&rdquo;</p><p> The term &ldquo;cash on hand&rdquo; translates into the number of days PMC could continue to operate if its revenues came to a standstill. By comparison, Porter&rsquo;s ledger showed 40 days of cash on hand back on Sept. 30, 2012, when it experienced an operating loss of $6.1 million.</p><p> &ldquo;That is a dramatic improvement over a relatively short amount of time,&rdquo; noted Hallman. &ldquo;I think that improvement is due, to a great extent, to our discipline in terms of spending, especially in the area of capital investments.&rdquo;</p><p> But at the same time, Porter&rsquo;s budget planning was dealt a setback recently when the Medicaid reimbursement rate increase it had anticipated for fiscal year 2015 was taken off the table by the state. That left a $116,000 hole in the PMC budget. Porter is also expecting to take a hit &mdash; perhaps as much as $200,000 to $300,000 annually &mdash; in revenues it receives through the Medicare program, according to Ciampa. It is a budget hit that will affect all eight of the state&rsquo;s critical access hospitals, Ciampa noted.</p><p> &ldquo;We are going to need to figure out, going forward, how we make adjustments to our budget for next year to compensate for these unanticipated (reductions),&rdquo; Hallman said.</p><p> PMC will make the adjustments in a way that minimizes the chance of service reductions or job cuts, according to Hallman.</p><p> The proposed budget forecasts 1,986 patient admissions, roughly the same as are anticipated for fiscal year 2014. Officials noted a recent, modest decline in the average amount of time patients are spending in the hospital &mdash; 3.1 days, compared to 3.3 days a year ago. Shorter patient stays, of course, means less revenue for PMC. At the same time, the organization is anticipating a bump in outpatient visits to some of its 10 physicians&rsquo; offices that make up Porter Practice Management. Officials are anticipating a combined total of 100,713 visits next year, up from the expected 94,558 this year. Much of that surge is expected at Bristol Internal Medicine, which hosts the suboxone treatment program, and Porter Internal Medicine.</p><p> &ldquo;One of the major pillars of our financial performance is the number of patients seeking care,&rdquo; Hallman said. &ldquo;We are still in a world where get paid for volume &hellip; We have predicted for next year volume numbers that are very consistent with this year&rsquo;s performance. We are not taking this year&rsquo;s numbers and adding 10 percent.&rdquo;</p><p> It&rsquo;s a budget that reflects a combined total of 15.7 new positions within PMC.</p><p> &ldquo;I think this is a pretty good budget,&rdquo; PMC President Jim Daily said. &ldquo;There are some policy issues &mdash; whether it&rsquo;s about suboxone or about cost shifting and the implications of having no Medicaid increase.&rdquo;</p><p> Daily stressed that the cost shifting and the lack of a Medicaid increase do not bode well for the state&rsquo;s health care reform efforts going forward.</p><p> &ldquo;You can&rsquo;t make it so that when revenue goes down, you are going to cut reimbursement to providers,&rdquo; Daily said. &ldquo;It has to be predictable.&rdquo;</p><p> <em>Details about all the state budget requests can be seen at the GMCB website, </em><a href="http://www.gmcboard.vermont.gov/hospitalbudgets"><em>www.gmcboard.vermon... <em>Reporter John Flowers is at [email protected].</em></p>

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Addison County Independent

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