Help is on the way for Olympic Medical Center and Grays Harbor Community Hospital.
On March 19, Gov. Jay Inslee signed into law Senate Bill 5859, legislation that creates a classification for certain rural hospitals to align state Medicaid reimbursement rates with federal Medicare compensation rates.
The bill provides several Washington hospitals financial relief. Rural hospitals — OMC and Grays Harbor’s in particular — have been particularly hit hard by the downturn in the economy since 2008, bill advocates note, and that more patients who visit them rely on Medicaid and Medicare to cover their costs. Reimbursements received by these hospitals are often for less than the cost for services provided.
And while the federal government recognizes health care facilities like Olympic Medical Center as “sole community hospitals,” the state government has viewed OMC as an urban health care facility not unlike Seattle hospitals, OMC Chief Executive Officer Eric Lewis said.
That recognition affects Medicaid and Medicare reimbursement rates.
“We’re not like Seattle hospitals — we have different patients and different economies of scale,” Lewis said.
The bill becomes law on June 12 and OMC will start to receive improved reimbursements on Jan. 1, 2015.
Lewis said the bill passage will bump OMC’s reimbursement rates from 55 percent to about 72 percent, bolstering OMC’s budget by about $1 million annually. (Olympic Medical Center receives more than 70 percent of its general revenue from Medicaid or other government programs each year.)
Sen. Jim Hargrove (D-Hoquiam) co-sponsored the Senate bill, with state representatives Steve Tharinger (D-Dungeness) and Kevin Van De Wege (D-Sequim) co-sponsoring a similar bill in the House.
“I really think this bill is going to create much needed financial stability for Olympic Medical Center; it is important that we do what we can to make sure it is operating here for the long run,” Hargrove said. “Without this community hospital, our most vulnerable citizens would have nowhere to go.”
Lewis credited legislators for getting the bill passed, not an easy task considering the two hospitals it aids, OMC and Grays Harbor, are in one (24th) legislative district.
“I think our elected officials deserve a huge amount of credit to help stabilize the health care deliver system in Clallam County and (in) Grays Harbor County,” Lewis said. “They had to explain why it was necessary. I don’t think that’s a trivial achievement.” Tharinger, Lewis noted, worked in health care and appropriations committees to build support while Van De Wege moved the bill through rules committee; the House bill passed 97-0.
The Senate passed the bill, 46-3.
“By moving this legislation forward, we not only ensure our citizens will have access to a quality hospital, we also retain jobs,” Hargrove said. “There are nearly 1,200 people working at Olympic Medical Center. These are good, middle-class wage jobs; we need to protect these people and keep them working.”
