CRH Shares Challenges with Representative Poliquin

Rod Boula, CEO of Calais Regional Hospital (right), explained the issues that he sees as most pressing to the hospital’s financial survival to Bruce Poliquin of the U.S. House of Representatives on Monday. Hospital board members Ron McAlpine and Marianne Moore joined the discussion. (Photo by Lura Jackson)

By Lura Jackson

 

The administration of Calais Regional Hospital [CRH] – including CEO Rod Boula and Board Chair Ron McAlpine – met with Bruce Poliquin of the U.S. House of Representatives on Monday, October 1st, to discuss their ongoing challenges. Poliquin is an incumbent in the upcoming November election. CRH is facing a number of challenges to its financial stability, each of which Boula outlined to Poliquin. In many cases, the situations are a result of federal operations.

Among the primary issues Boula raised is the method of cost-based reimbursement for critical access hospitals like CRH. Boula said that the reimbursement has been handled as a fee for service or at a variable rate even though in many cases the costs are fixed. “For a small hospital to survive, our variable costs become fixed,” he said, explaining that hospitals that have 25 beds have to maintain that many staff regardless of how many beds are being used.

Shifting the reimbursement method would enable more of CRH’s services to be covered by Medicaid as allowable costs. “We should be at 70 percent, right now we’re at 38 percent,” Boula said. Federally Qualified Health Centers providing the same services have their similar costs covered. “It’s an uneven playing field,” he said. Boula said that the policy and the lack of response as to how it is continuing in this fashion has led himself and other rural hospital administrators to wonder if they are simply expected to close through attrition.

Boula later illustrated the imbalance of federal funds directed to urban health centers versus rural ones. He explained that while rural hospitals comprise about 25 percent of the total number of hospitals in the country, the share they receive from Medicare is 5 percent. “The National Rural Health Association, the American Health Association, and the Hospital Association have said that if it was 6 percent, we’d be okay. This is how tight to the vest this is.” Poliquin acknowledged Boula’s comments and said he would be directing them appropriately.

Another issue that the hospital is faced with is in getting paid for its services by the Veteran’s Administration [VA] and Indian Health Center [IHC]. The two entities are the highest commercial payers, with the VA representing 2.9 percent of the total charges of the past year (which are currently $38.5 million), and IHC representing 2 percent. In both cases, Boula said, the hospital has been receiving denials for services that were previously authorized.

The Veteran’s Administration was described by Poliquin as an “incredible bureaucracy” with a limited amount of internal communication. “We have a problem with all the pieces not talking to each other.” Poliquin asserted that he has been working diligently with the VA to resolve the issue, which is not limited to Calais. “In hearing after hearing, we badger these people. We’ve got rural hospitals that need to be paid.”

Poliquin said that steps are being taken with the VA to make it much more efficient technologically, which will, in turn, enable better records and authorization management. Poliquin sees the Veteran’s Choice program as a positive program that can help to stabilize CRH – provided the payments are properly situated. “Great new customers for our rural hospitals. And our veterans don’t have to drive to Togus. It’s a no-brainer. It’s an absolute no-brainer.”

Regarding the IHC, Boula questioned if a possible solution would be to receive the funds from the IHC directly rather than requesting them through the Passamaquoddy tribe. Poliquin said that he will investigate the issue. The tribe’s sovereignty status may impact the result.

In the meantime, the hospital is addressing the issue by utilizing pre-certification authorizations. “We’ve really strengthened that, and it helps, but we’re still experiencing it,” Boula said.

As a final issue, Boula said that the hospital’s federal Health Professional Shortage Area (HPSA) score had decreased without any explanation. The score, which ranges on a scale of 0-25, determines what resources a hospital has to attract providers. Boula said that for years the hospital has had a score of 11, but last year it decreased to 7. He also noted that the system has some obtuse scoring practices, giving the example that when a provider retires and moves to an area, they count against the HPSA score – even if they are no longer actively practicing.

The potential for telemedicine to provide convenient local access to specialized services is significant and could help CRH be more viable, Boula suggested. However – even though the technology has existed for two decades – “nobody wants to pay for it,” he said.

CRH Board Chairman Ron McAlpine said that the recent initiative between Calais and Baileyville to provide high-speed internet to the community will be one potential source of telemedicine infrastructure. Poliquin suggested others, including Microsoft’s “white spaces” initiative to send high speed internet through white noise, T-Mobile’s possible 5G expansion project, and satellite-based high speed internet that benefits from the decreased cost of launching satellites through SpaceX. Each of those routes will make telemedicine a reality in rural America.

 

Regarding the state expansion of Medicaid and Governor Paul LePage’s refusal to implement it, Boula said it is a “travesty.” If the Medicaid expansion is allowed to continue by the incoming administration, it will generate between $1.3 million and $1.7 million a year, Boula said.