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Medicare payments to CAMC decreasing

CHARLESTON, W.Va. -- Hospital officials say a decline in Medicare payments will negatively affect Charleston Area Medical Center's budget for next year.

Changes in the Medicare base rate and the area wage index -- part of the Medicare reimbursement formula -- as well as health-care reform will mean the hospital's Medicare payments will have a net decrease of around $250,000, Larry Hudson, CAMC's chief financial officer, told the board of directors Wednesday morning.

On a normal year there's a $5 million year-over-year increase in Medicare payments, Hudson said.

"Obviously, when you have a decline in reimbursements you have to look in other areas to help find ways to balance the budget and that's what we've done," Hudson said after the meeting. "We've found ways to save money and try and offset the loss from the Medicare program."

The CAMC board passed a budget with $788 million in total operating expenses for its three campuses -- CAMC General, CAMC Memorial and Women and Children's Hospital. 

The budget will include employee merit raises that average 3.5 percent, Hudson said.

Medicaid reimbursements will also be down next year, Hudson said.

Hudson said preparing the budget is a struggle each year because of increases in expenses and changes in government regulations.

"The staff has done a great job at digging deep and finding ways to balance the budget," Hudson said.

In other business, Hudson told the board that the hospital's credit rating from Moody's had been reaffirmed at A3 with a stable rating instead of negative.

In May 2011, Moody's dropped CAMC's credit rating from A2 to A3 with a negative outlook.

Hudson said hospital officials were surprised at Moody's rating.

"We were not expecting good news and were pleased to receive the good news that they reaffirmed our A3 rating and have taken us from a negative outlook to a stable outlook," he said. "It's beneficial to have a stable and a good rating when you need to access money in the public market."

Hospital officials submitted a request for certificates of need from the West Virginia Health Care Authority for plans to build three additional floors on top of the Bradford Pavilion surgery center at CAMC Memorial Hospital, board members were told. The $31 million project will initially allow for 48 more beds.

Officials have also submitted a request to build a nearly $40 million new cancer center. The requests were submitted to the HCA on Aug. 16, board members were told.

Reach Lori Kersey at lori.kersey@wvgazette.com or 304-348-1240.


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