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Financial difficulty forces hospital to curb medical services

ACKERMAN — In January, financial difficulties which became apparent during a recent Medicare audit forced the suspension of inpatient medical services available from Choctaw County Hospital.

The future of the hospital in is limbo, according to Larry McClain, president of the Choctaw County Board of Supervisors. Emergency room service had been suspended Dec. 1, according to McClain. Board attorney Joe Griffin of Ackerman said that a Medicare audit report presented in November 2001 showed that Choctaw County Hospital had received Medicare overpayments totaling $407,000 during the federal fiscal year ending Sept. 30, 1998. “They (Medicare) are withholding present claims to recoup that which was overpaid,” said Griffin.

In 1999 and 2000, Medicare patients accounted for 70% of patients served by the 25-bed Choctaw County Hospital, according to Kelly Shannon, public relations representative for the Mississippi Department of Health.

Figures for 1998 were not available, said Shannon, although she noted that the figures were pretty stable from year to year at rural hospitals.

Up until September 1998, CCH was a community hospital governed by a local board of trustees. Negotiations began to make CCH a leased facility, and in January 1999, Choctaw County Hospital was leased to a hospital management company called Centennial Health Services, according to Griffin. Centennial then subleased the facility to DasSee Health Services of Quincy, Fla., in early 2001, according to Griffin.

Griffin was unsure of the exact relationship between DasSee and Centennial; he noted that Mike Lake, executive director of DasSee, had been their contact person in all dealings with Centennial before the hospital was subleased. DasSee Health Services did not return repeated phone calls for information on the hospital’s situation.

The withholding of Medicare reimbursements not only caused cutbacks in services, it caused DasSee to fall behind on monthly lease payments of $17,200, according to Don Threadgill, Choctaw County Chancery Clerk. The board mailed a lease termination notice that was received by DasSee on Jan. 24, said Threadgill.

After 30 days, if the payments are not current, Choctaw County will be free to find another lessee for the facility, said Threadgill.

Medicaid payments have not been affected at the facility, according to Francis Rullan, public relations director of the Department of Medicaid.

“Choctaw County Hospital does not owe us anything, and we have not recovered any funds from them,” said Rullan.

In FY 2001, the hospital received $162,644 in Medicaid dollars; payments made during the current fiscal year total $110,614. Health Department figures note that only 10% of CCH’s patients in 1999 and 2000 received Medicaid.

X-ray and lab services are available on a temporary basis, said McClain, who said he was in regular communication with Lake.

“Every week, he sees if he can keep it open,” said McClain.

A 60-bed nursing home is still operating under a lease agreement with Magnolia Management. Magnolia entered a sublease agreement with DasSee on Oct. 1, 2001, according to Threadgill, that has not been approved by the board and will be re-negotiated after DasSee’s termination takes effect.

Threadgill emphatically stated there are no plans to close the nursing home; Medicare does not cover long-term nursing home care. “The board is very cognizant that they have 60 grandmothers and grandfathers over there that they have to take care of,” said Threadgill. However, being unable to do outpatient testing at the hospital would be a negative for the nursing home, Threadgill acknowledged.

It’s not clear what effect the hospital’s troubles will have on health care in the area. The three doctors in the county, two at Ackerman and one in Weir, have not indicated that they will leave the area due to the suspension of services at CCH, said McClain.

Ackerman Family Medical Clinic, owned by North Mississippi Medical Clinics in Tupelo, has increased the number of hours per day they are open and are now open on Saturday, according to David Barber, regional director of NMMC.

“We extended some hours on hearing of the ER closing, and then went further once it did close,” said Barber. “We have done the things that we can in terms of extended hours to support the community.”

NMMC also owns other health care facilities in the area, including Webster Health Services in Eupora and Clay County Hospital in West Point. McClain said two other companies have expressed interest in leasing the hospital: Pioneer Health Services and Brandywyne Management of Maryland, although negotiations cannot begin until mid-March.

Sixty-five-bed Winston Medical Center is one of the closest facilities to Ackerman, located 15 miles away. Administrator Dale Saulters said the closing has not caused an increase in traffic to his hospital, which provides inpatient, outpatient and ER services.

“This is going to be a great disadvantage to the elderly over there,” said Saulters.

Who will be responsible for the $407,000 Medicare overpayment if the hospital does close is also unclear.

“That’s a good question,” said Griffin. “We’re certainly hoping it’s not the county because we don’t have $400,000.”

With the hospital under a board of trustees during the fiscal year the overpayments occurred, Griffin said, “The county had no day-to-day role in running the facility at that time.”

Donald Bonin, spokesman for Blue Cross Blue Shield of Mississippi, who administers Medicare Part A in Mississippi, could not comment on payments to specific providers.

Rural facilities such as Choctaw County Hospital face further challenges with Mississippi struggling to close a $150-million deficit in Medicaid for this year. House Bill 1200, passed last week, will specify a 5% cut in state-paid fees to doctors, nursing homes and hospitals with savings of $23 million. Thirty-three of the 50 states are facing similar deficits.

While confident that the hospital will recover and be operating again soon, Threadgill summed up the situation for the current management for the facility in Ackerman.

“The clock is ticking on them,” he said of DasSee.

Contact MBJ contributing writer at Julie Whitehead at mbj@msbusiness.com or (601) 364-1018.

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