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Hospitals face Medi-Cal payments backlog

Staff Writer

With California’s budget crisis temporarily halting Medi-Cal reimbursements to local nursing homes and convalescent hospitals, the facilities are striking a critical balance between offering usual services to their residents and meeting their running costs ” with total reimbursement backlogs topping $1 million.

Though local hospital facilities haven’t downsized their staff or compromised their quality of care, administrators do foresee a time when a continued delay of Medi-Cal reimbursements could prompt them to delay paying their vendors.

“We are not in a crisis mode now, but this budget insanity can’t continue,” said Brian Collier, administrator at Spring Hill Manor Rehabilitation and Convalescent Hospital on Joerschke Drive in Grass Valley. “We are talking to our lobbying association and advocates, trying to stay on top of the news and hoping and praying for a resolution.”

As legislators in Sacramento wrestle to agree on the state budget for the current fiscal year, healthcare providers serving Medi-Cal patients are simply not getting paid.

A 10 percent reduction in Medi-Cal reimbursement rates went into effect last month in an attempt to balance the state budget. The 10 percent cut could remain in effect under the new budget unless lawmakers decide to do otherwise.

The Golden Empire Hospital has a payment backlog of $650,000, said Medical Billing Manager Nicolette Talman.

“It is impacting us,” she said. “We haven’t had to lay anyone off, but we have to watch our expending more closely.”

Golden Empire got its last Medi-Cal payment in early July, Talman said. The hospital serves between 128 and 130 residents, she added.

Spring Hill Manor has a payment backlog of about $300,000, Collier said.

“We anticipated the crisis since February and March and so we planned for it,” he said. “We hoarded cash, became better business people in terms of collections, watched our money and managed it better.

“Every year, there’s a delay in the budget. We have a buffer to make up for the delay. The California Association of Health Facilities ” they are legislative advocates ” warned us repeatedly that this was going to be the worst budget year.”

Spring Hill Manor got its last Medi-Cal payment on July 28, Collier said. Spring Hill serves about 82 residents.

If the reimbursement crisis continues, “the first people to suffer would be our vendors, like our suppliers, our rehab providers,” Collier said.

Spring Hill has a “draconian plan” in case the payment problem isn’t solved in the near future, Collier said.

“It would include transfer of residents, laying off of staff. The end of the road is the closure of facilities, not only Spring Hill but others around the state,” Collier said. “Looking down the road, it’s not a pretty view.”

To contact Soumitro Sen, e-mail ssen@theunion.com or call 477-4229.

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