PORT ANGELES — Olympic Medical Center could see a significant boost in reimbursements from the Center for Medicare and Medicaid Services if a proposed CMS rule reversing a policy known as “site neutrality” for Rural Sole Community Hospitals goes into effect.
The site neutrality rule, which has been in effect since 2019, significantly cut Medicare reimbursement rates for hospital clinics that are more than 250 yards away from a hospital’s main campus. The ruling does not affect Jefferson Healthcare or Forks Community Hospital.
The CMS rule lowered Medicare reimbursement rates 60 percent — from $118.35 to just $47.35 per patient — for those treated at off-site clinics like those operated by OMC in Port Angeles and Sequim.
The significant loss of funding interrupted OMC’s planned construction at its Sequim campus and initiated deep budget cuts.
“This is a victory for us to have our former rates reinstated,” said Darryl Wolfe, chief executive officer of Olympic Medical Center, in the press release.
“Once the rule is finalized, we will need to go back and re-orient our strategic plan and our facility master plan which both assumed a loss of $47 million over the next 10 years.”
CMS will consider public comments on the proposed rule through Sept. 13. To read the proposed rule, go to tinyurl.com/mu8cw52n. To submit a comment, go to https://tinyurl.com/39snm98s.
Comments, including mass comment submissions, can be submitted electronically through http://www.regulations.gov; send by U,S, Postal Service to Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1772-P, P.O. Box 8010, Baltimore, MD 21244-1810; or by express or overnight mail to Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1772-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
“This is a huge deal for protecting health care in rural communities and for protecting jobs,” said U.S. Rep. Derek Kilmer, who represents 6th Congressional District, which includes the North Olympic Peninsula, in a press release.
“Hospitals should be encouraged to bring their services closer to the people they care for, not be penalized for it.”
After the comment period ends on Sept. 13, CMS is expected to take about six weeks to review public input and make any changes, according to Kilmer’s office. In November, it will publish a final rule that includes a summary of the comments, CMS’ responses and the final regulations.
Clallam County residents rallied to protest the Medicare reimbursements cuts shortly after the CMS announced the rule in November 2018 by writing letters and commenting on its website.
In December 2018, OMC became a plaintiff in an American Hospital Association lawsuit against the CMS in U.S. District Court that was decided in their favor but eventually reversed by the U.S. Court of Appeals for D.C. Circuit in August 2020.
Kilmer, who was born at the Port Angeles hospital now known as Olympic Medical Center, introduced bipartisan legislation in 2019 to block the rule, held multiple meeting with CMS leadership, and hosted a virtual meeting between OMC and CMS leadership, he said.
In June of this year he sent a letter to CMS Administrator Chiquita Brooks-LaSure to encourage the Biden Administration to ensure equitable access to care under Medicare and exempt Sole Community Hospitals from the site neutral policy, he said.
“This is a big win for Clallam County and specifically Sequim,” said Colleen McAleer, executive director of Clallam County Economic Development Council, in the press release.
“This opens the door for OMC to provide critical medical services in the fastest growing area of the county.”
Marc Abshire, executive director of the Port Angeles Chamber of Commerce, said in the press release that, “Too often, ‘one-size-fits-all’ and ‘peanut-butter-spread’ policies hurt rural businesses and economies in ways that were unforeseen and unintended. It requires much more work to get it right across the board – both at the start, and to correct inequities.”
The proposed rule rolling back the reimbursement cuts comes at a critical time for OMC.
Hospitals across the state experienced a net loss of $979,173,796 in revenue in the first three months of 2022 according to a survey released Thursday by the Washington State Hospital Association (WSHA).
In a briefing Thursday, WSHA and hospital representatives identified low Medicaid reimbursements as among the main drivers of heavy financial losses.
