Healthcare Business News

Late News: Sandy's aftermath

Hospitals hammered by storm seek cash assistance

By Melanie Evans
Posted: November 10, 2012 - 12:01 am ET

Some hospitals remained closed and others continued to grapple with a strain on capacity more than a week after a deadly superstorm that devastated coastal communities in New York and New Jersey.

New York officials, working with state hospital associations, prepared late last week to ask federal health officials for immediate cash assistance for hospitals that evacuated patients elsewhere or those that faced extraordinary expenses as they took transferred patients.

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Hospitals that remained closed by the storm, which reached the New Jersey coast with hurricane-force winds Oct. 29, would receive a grant worth three weeks of Medicaid payments, according to the Greater New York Hospital Association.

Two city-owned hospitals, 788-bed Bellevue Hospital Center and 371-bed Coney Island Hospital, remained closed, as did NYU Langone Medical Center, which lost power shortly after the storm made landfall.

And 142-bed Long Beach (N.Y.) Medical Center, where water flooded the basement “floor to ceiling,” also remained closed as electrical and structural engineers got their first look at the damage last week, hospital spokeswoman Sharon Player said.

Barry Stern, chief financial officer for Long Beach Medical Center, said the federal financial aid was desperately needed to pay engineers and other staff who will help to reopen the hospital. “It's a lifeline,” he said. “We need it in order to make payroll.” The hospital would receive about $1 million in financial aid under the state's request, he said.

Water remained in the hospital's basement, which housed a pharmacy and sterile medical supplies along with its electrical and fire systems, for more than a week after the storm after pumps were diverted from the hospital to the city's sewage system. Stern said the hospital could be closed for two or three months. Because the damage was caused by flooding, the hospital will see limits on its business interruption claims, he said.

About 150 of the hospital's nurses, pharmacists, social workers and other employees followed patients to other hospitals and continue to work. Stern said Long Beach Medical Center may receive salaries for those workers from the locations where patients were transferred. The hospital could not pay employees last week because of flood damage to the building that houses computers that process payroll. Player said employees would be paid this week. The hospital also cannot bill insurers because of damage to the same building.

Evelyn Hernandez, a spokeswoman with the New York City Health and Hospitals Corp., said in an e-mail: “We're working very closely with the city to make sure we have an adequate cash flow and we're tapping cash reserves.”

The system had enough cash in reserve to operate for about 57 days at the end of June, when the Health and Hospitals Corp. closed its books for the fiscal year. The system's operations lost $347.8 million on revenue of $7.1 billion last year, and its liabilities exceeded its assets by $1.1 billion.

Roughly one out of five patients admitted to a Health and Hospitals Corp. hospital is treated at Bellevue or Coney Island Hospital. The closed hospitals accounted for 15% of the system's outpatient visits last year.

Lisa Greiner, a spokeswoman for NYU Langone Medical Center, said that it's unclear how long the hospital will be closed to inpatient admissions, but its outpatient services had resumed.

The New York request for federal financial aid would also provide cash for hospitals that temporarily transferred patients or were closed briefly, the hospital association said. That was the case at 90-bed Eastern Long Island Hospital, which evacuated patients Oct. 29 and reopened Oct. 31. These hospitals would receive two weeks of Medicaid payments, as would hospitals that accepted large numbers of evacuees or those hospitals that operated for a longer period on generator power, such as 810-bed Beth Israel Medical Center, which relied on generators for six days.

Hospitals that received a more limited number of transfer patients would receive one week of Medicaid payments under the relief request.

New Jersey is exploring a similar request, said Kerry McKean Kelly, a spokeswoman for the New Jersey Hospital Association. “We're exploring all options available to help New Jersey providers recover from the storm, including the potential use of the 1115 waiver for some financial support,” she said in an e-mail.

Robert Shapiro, CFO for North Shore-Long Island Jewish Health System, said he did not yet know the cost to the system for the 270 patients who were transferred to North Shore-LIJ from other hospitals and nursing homes because of the storm. He said he believes that federal and state aid and insurance will eventually cover about two-thirds of that cost, as was the case for $10 million of extra expenses from the 2011 Hurricane Irene.

Some hospitals have been unable to release patients who are ready to leave because patients have nowhere to go. The patients have added to the strain on the capacity and finances of New York's remaining hospitals after the massive and destructive storm that forced nine hospitals in New York and New Jersey to evacuate.

Continuum Health Partners, which operates three Manhattan acute-care hospitals and another hospital campus in Brooklyn, could not release at least 50 patients as of late last week because of storm damage to nursing homes or housing, said Gail Donovan, executive vice president and chief operating officer for the system. The figure had been higher, she said. “We have been making progress every day to lower that number.”

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