Southwest (McComb) Mississippi Regional Medical Center has ended employment contracts with five doctors
Southwest Health System CEO Norman Price said the Affordable Care Act
plus changes in reimbursements from the government and insurance providers prompted the cost-saving move.
"Every single practice (as employees of the hospital) at this time, given the new reimbursement we're under, is in the red. We have to make adjustments to that. This is not unique to this hospital. All hospitals in the United States are going through this," Price said.
Price told the Enterprise-Journal
that it's a simple matter of economics.
"We can't afford them," Price said. "Cuts are being made in what's called incentive pay, which is calculated by the procedure. We're not reimbursed at the same rate we were. It has dropped significantly."
For instance, he said the average colonoscopy price is $3,200. Medicare
reimbursement for the procedure is $649.
All five doctors, he said, will retain physician privileges at Southwest.
Price is bracing the hospital staff for even tighter economic times.
The fact that Mississippi
opted not to expand Medicaid
rolls hasn't been quantified, but he said it also figured into the hospital's decision on cuts, Price said.
"The Affordable Care Act will force the acute care delivery system to evolve to accommodate a new reimbursement reality. As a result of the Affordable Care Act, the non-expansion of Medicaid will have the effect of over-running the emergency departments with non-paying patients. The inevitable cuts and changes will not be popular nor easy to accomplish. However, all will be necessary in order to move this medical center forward into the new Affordable Care Act world," he said.
A big issue is hospital-employed doctors' salaries and lower reimbursements for Medicare and Medicaid patients, who make up 65% of Southwest's business.
"We know we're going to be cut $8 million by the federal government, and we also know we're going to be cut 2% by Medicaid. That's going to equate to about $8.5 million to $9 million," Price said.
The $8 million refers to the amount of money the hospital receives per year for taking on a disproportionate share of patients who are on Medicare or Medicaid.
"We're going to have to renegotiate the physicians' contracts that were written on a different level of reimbursement," Price said.
Price said the five physicians who don't have a high enough patient volume or those not generating enough revenue to meet their expenses were first in line.