Inadequate.
That’s how Gary Marchand, the interim CEO at Greenwood Leflore Hospital, describes the proposals currently in play in the Mississippi Legislature that are supposed to help financially struggling hospitals such as Greenwood’s stave off closure.
The House and Senate have passed separate bills that would provide $80 million in emergency funding to the state’s hospitals.
Marchand said not only is the total figure probably insufficient but the proposed method of divvying it up, at least in the Senate, would favor larger hospitals over smaller ones.
The Senate version would provide $500,000 to acute care hospitals with fewer than 100 beds, such as Greenwood Leflore. Those with more than 100 beds would receive $1 million. Critical access hospitals with emergency rooms, a designation that Greenwood’s hospital is pursuing, would receive $350,000.
The House version is more vague, only saying at this point that the allocation would be based on licensed bed counts.
“I think it’s generally understood that the smaller, rural hospitals ... are the hospitals that need to replenish their cash reserves. If the Legislature’s considering a temporary immediate relief bill, it just seems to me that should be the objective,” Marchand said. “And if that is the objective, the smaller hospitals need the larger grants and the larger hospitals need the smaller grants, from where I sit.”
Marchand made his comments Tuesday, hours after the money-losing hospital’s latest financials were reported to its board.
In January, the Greenwood hospital posted a loss from operations of nearly $1.3 million. It wound up with a net loss of $160,000, thanks to
$1 million in bailout money from Leflore County and $134,000 in free utilities from Greenwood Utilities and the city of Greenwood.
The city and county have committed to $4.25 million in cash or free services to the hospital they jointly own.
Through the first four months of the current fiscal year, more than $2.5 million of that assistance has been received, helping lower the hospital’s losses to about $4 million.
For the same time period a year ago, the hospital showed a net profit of about $1.8 million, thanks to nearly $8 million in coronavirus relief funding, mostly from the federal government. Those grants, however, were exhausted last year.
Hospital officials have said that their only hope of long-term survival is a significant increase in reimbursements from Medicare and Medicaid, the government insurance programs that cover 75% of the Greenwood hospital’s patient mix.
Marchand was complimentary of the state Division of Medicaid’s efforts to increase outlays to hospitals, even while state Republican leaders continue to oppose expanding the program to cover the so-called “working poor.” Mississippi is one of 11 states that have declined expansion as provided under the federal Affordable Care Act.
The Division of Medicaid is pursuing two changes to the formulas used to calculate supplemental payments. The net effect, according to Marchand, would be an extra $91 million annually for Mississippi hospitals. Although that’s a fraction of an early projection of $400 million, Marchand said it appeared to him that the Division of Medicaid was diligently trying to squeeze out as much money as it could under existing federal regulations and state policies.
“I think they really are intending to do good work here,” he said.
Separately, the Greenwood hospital is pursuing a strategy designed to increase Medicare reimbursements by an estimated $11 million to
$14 million a year. It will be submitting its application this Friday to be designated a “critical access hospital.” The biggest known stumbling block is a federal regulation that restricts eligibility to hospitals that are at least 35 miles away from another hospital. There are at least three hospitals — located in Ruleville, Indianola and Winona — that are less than 35 miles away from Greenwood Leflore.
Greenwood officials are hoping to be granted a waiver from the distance rule. Marchand said it could be mid-summer before the fate of the application is known.
Meanwhile, the hospital is trying to scrape up enough cash to keep its doors open. Based on current projections, it has only enough cash to last until the end of April, without additional state or local emergency help.
The cash depletion in January was just $81,000, thanks to the million-dollar check from Leflore County and $417,000 in insurance proceeds toward the repair of one of the hospital’s two air-conditioning chillers. The insurance check, though, is a temporary infusion, as it will be spent in March when the repair is scheduled to take place.
Among other potential revenue-generating measures the hospital board is considering is the sale of surplus real estate the hospital owns. The board authorized hiring Greenwood real estate appraiser Eddie Stuckey to determine the value of six vacant buildings that were formerly used as clinics by the hospital as well as seven vacant lots and three vacant houses. Stuckey was the low bidder at $12,500 and also offered a quicker turnaround time, according to Marchand.
- Contact Tim Kalich at 662-581-7243 or tkalich@gwcommonwealth.com.
