Blaming new legislation that doesn’t even affect it, Herington Municipal Hospital is pulling the plug on its embattled Hillsboro clinic.
The clinic, deemed illegal by attorney general’s opinions and challenged by a taxpayer lawsuit, will close April 30.
The closing, two months later than originally announced Friday, was blamed on a new law that limits Medicare reimbursements to new rural health clinics even though the clinic is not now designated as such.
An impassioned news release went on to assail the retroactive nature of the reduced reimbursements and called it a “gutting of rural health care by Congress.”
Despite the announcement’s plea for voters to contact members of Congress to protest the move, other clinic operators say it’s unlikely the changes in Medicare reimbursements would have a profound effect on the clinic’s cash flow.
Jeremy Ensey, chief executive officer for St. Luke Hospital, said Medicare reimbursement depends on both the number of Medicare patients and the expense of their visits.
St. Luke is paid $116 per Medicare visit — only $16 more than the Herington hospital claims they would be paid under the new law.
Herington taxpayer Robert Danzman filed a lawsuit two days before the hospital decided to close the clinic. The suit challenges the hospital’s legal authority to purchase, build, renovate, or expand into Hillsboro. It also calls for an independent audit of the hospital’s finances and use of federal coronavirus funding.
Hillsboro city administrator Matt Stiles said he was notified Friday by the hospital’s chief financial officer, Bryan Coffey, that the reason the clinic would close was a retroactive change in federal coronavirus aid, which apparently was being used to help finance the project.
Renovation of the clinic building is still in progress.
“It seems pretty sudden,” Stiles said.
The hospital also encouraged patrons to contact Kansas congressmen and senators.
“Every one of the Kansas delegation voted in favor of this bill and although it benefits urban hospitals that operate health clinics because they got a bump up in their rate, it has once again hurt rural hospitals who are cost-based reimbursed by capping new Rural Health Clinics at $100 per visit and making it retroactive back to Dec. 31, 2019.
“No business can operate in an environment where the rules are changed retroactively, and even if a technical correction was made to the law to reflect the rule change as of Dec. 31, it would give businesses only three days to adjust.
“This is a departure from what Congress has long understood; that cost based reimbursement is needed to ensure access to healthcare in rural communities. What this means for small communities that do not have the patient volumes is they will not be able to afford physicians and will be destined to have either no providers or be limited to non-physician providers such as physician’s assistants and nurse practitioners.”
The clinic, which opened little more than a year ago, has been remodeling its building in downtown Hillsboro.
Its building permit requires it be sealed up against the elements if construction is not finished so it cannot become a blight on the neighborhood, Stiles said.
Coffey said that although the clinic had not been designated a rural health clinic, it successfully passed inspections to certify it as one in October.
“It takes six to nine months to be classified as a rural health clinic,” Coffey said.
“We’ve had 1,400 visits at that clinic,” Coffey said. “The first eight months it was open only two days a week.”
Coffey said the COVID outbreak makes rural health care in America even more important.
Danzman said the hospital has problems bigger than federal funding.
The hospital’s Jan. 7 board of trustees meeting, required under state law to be an open meeting because the hospital is taxpayer funded, was held in closed session, he said.
Danzman went to the hospital that night to attend the meeting and was told by hospital chief executive officer Isabel Schmedemann that he could not enter.
“I haven’t seen the resolution yet,” Danzman said.
Danzman has a long list of questions, including:
- Why did it have to be a closed, executive session meeting if there’s nothing to hide?
- Could this be an effort to avoid a pending lawsuit?
- Is it really because of funding caps or an attempt to avoid inquiries into other matters?
- Does this mean HMH and the city of Herington will have to reimburse the Cares Act for maybe thousands of dollars?
- Will there be an immediate forensic audit of every detail of the illegal operation from beginning to end?
- Did the board of trustees have complete knowledge of, and approve, the illegal operation from concept through implementation?
- Who decided to give $100,000 to the city of Hillsboro?
- Who came up with the idea of an illegal clinic in Hillsboro in the first place?
- Who is going to reimburse the city of Herington and HMH for all the money spent to purchase and renovate the buildings for, and operating losses of, the illegal clinic in Hillsboro? The board of trustees members? The CEO and CFO?
“The board of trustees passing a resolution to close the illegal clinic does not end the matter,” Danzman said. “It’s just the first of several steps to identify, stop, and solve the problems at Herington Municipal Hospital.”
Danzman said he sees “serious human resource issues” that need public investigation.
“There are serious questions about some other business activities, which might be called ‘misadventures’ of the HMH management,” Danzman said. “There is a simple solution to identifying and solving all the problems. A forensic audit to identify problems, not a simple annual audit which is only a review of the numbers given to an accountant. A feasibility study to reveal solutions for possible problems of every function or proposed functions of HMH services.”
Danzman said Herington citizens need to unite and demand the hospital trustees and city commission take action to end the problems and restore confidence in the hospital.
The closing date was originally announced as Feb. 28 and has since been changed to April 30. Patients can choose to see their medical providers at Herington or the hospital will transfer records to a provider of their choice, the press release said.