Community Forum

1. Community Forum Rehoboth McKinley Christian Health Care Services February 12, 2014

2. RMCHCS Board of Trustees-Officers • Priscilla Smith, Chair; Business Owner – 2006 • Kathy Head, RN, MSN, Vice Chair; Nursing Program Instructor– 2007 • Yogash Kumar, Secretary; Business Owner, City Council member – 2011 • David Bischoff, Treasurer; Business Owner – 2009 • Michelle Stam-MacLaren, MD, RMCHCS Chief of Staff; Pediatrician – 2010

3. RMCHCS Board of Trustees-County Appointees • Mary Ann Armijo, Media Executive – 2014 • Dave Dallago, Business Owner – 2014 • Brett Newberry, Professional Services Owner – 2014 • Yogash Kumar, Business Owner, City Council member – 2011

4. RMCHCS Board of Trustees-Community Members • David Bischoff, Business Owner – 2009 • Angelo DiPaolo, Public School Administrator (retired) – 2011 • Jennifer Dowling, Business Owner – 2009 • Sue Eddy, Private School Department Manager – 2009 • Kathy Head, RN, MSN, Nursing Program Instructor– 2007 • John Luginbuhl, Pastor – 2012 • Priscilla Smith, Business Owner – 2006 • Shannon Tanner, Business Owner – 2009

5. RMCHCS Administration • Barry L. Mousa, FACHE • Chief Executive Officer • High School:New Bremen, Ohio • Bachelors Degree: Indiana University, IPFW, Ft Wayne,Indiana • Masters Degree: Trinity University, San Antonio, Texas • Professional Certifications: • Certified Public Accountant (inactive) • Board Certified Health Care Executive • Health Care Experience: Florida, Georgia, Illinois, Indiana, Louisiana, New Jersey, New Mexico, Ohio, Texas, Virginia

6. RMCHCS Administration • Robert Baker, Director of Plant Operations – 2011 • Ina Burmeister, Chief Development Officer – 2008 • Bart Hansen, Chief Financial Officer – 2011 • John Mezoff MD, Chief Medical Officer – 2013 • Mike Nye – Vice President, Professional Services and Compliance Officer – 1983 • Nancy Santiesteban – Chief Nursing Officer – 1998 • Kimothy Sparks – Chief Quality Officer – 2013 • Tracy Towns – Chief Human Resources Officer - 2012

7. RMCHCS Department Directors Jim Bancuk – Clinic Operations - 2013 Larry Booker – Diagnostic Imaging - 2009 Donna Corley – Emergency Services - 1989 Rosemary Coyne – Home Health/Hospice - 2010 Melinda Graton – Health Information Management (interim) - 2014 Phillip Hager – Patient Financial Services (interim) - 2013 Patty Johnson – Surgical Services (staff interim) - 1994 Harry Kallipolitis – Case Management - 2013 Misty Leyba – Medical/Surgical/ Pediatrics/ICU - 1998 Cassandra Lopez – Laboratory - 1997 Art Macias – Pharmacy - 1996 Tom Gonzales – Information Technology - 1996 Edward Placencio – Materials Management - 1992 Doug Turner –Cardiopulmonary, Physical and Respiratory Therapy, Sleep Lab - 2008

8. Key Issues Being Addressed • Revenue and Services • Medicaid Program Reimbursement Shortfall • Sole Community Provider Payment Program • Emergency Services • Decisions that Positively Affect the Medicaid “Gap” • Critical Access Hospital Designation • East Campus

9. RMCHCS Services ICU Laboratory Medical / Surgical Pediatrics Pharmacy Physical and Speech Therapy Respiratory Therapy Sleep Lab Surgery Women’s Health • Cardiopulmonary / Cardiac Rehabilitation • Clinic Services—medical and surgical specialties • Counseling - Outpatient Behavioral Health • Diagnostic Imaging (MRI, CT, Mammography, Ultrasound, X-Ray) • Emergency Services • Home Health / Hospice -

10. RMCHCS Statistics

11. RMCHCS Revenue Sources

12. Non-Patient Supplemental Payments

13. RMCHCS Revenue Challenges

14. RMCHCS Underfunding Impact

15. Sole Community Provider Program -1 Since 1994 the Sole Community Provider program has been a core funding mechanism to supplement Medicaid payments for many New Mexico hospitals • June 2011—HSD suspends SCP payments • CMS alleges that sources of funds from counties were non-bona fide donations or in-kind transfers from hospitals • SFY 2011 SCP total = $279M • January 2012—HSD agrees to settlement with CMS • NM hospitals to repay $7.9M of CMS-calculated $53M overpayment (for 2009). NMHA says $1B SCP overpayments for 2000-2008. • RMCHCS repays $843,000 for 2009 (SCP reduced $2.5M in SFY 2012) • SCP payments restored at a lower amount—SFY 2012 = $221M

16. Sole Community Provider Program -2 • December 2012—HSD suspends SCP payments • 2nd time in 18 months • CMS determines SCP payment errors in HSD’s historical calculations • CMS investigation jeopardizes entire SCP program • May 2013—HSD agrees to settlement with CMS • SCP program transitions under Centennial Care waiver effective 1/1/14 • CMS agrees to not review other years funding source and payment calculations. • January 2014—Centennial Care SCP program for 28 rural hospitals plus UNMH, if the underlying funds source is predictable and stable • Safety Net Care Pool (SNCP) program = $192.1M total amount • $68.9M for indigent care (maximum CMS would permit) • $132.2M for Medicaid Inpatient rate increase (HSD estimates ~75%)

17. Safety Net Care Pool Funding Plan • House Bill (HB) 350 and Senate Bill (SB) 368 establish county gross receipts tax equivalency—generates $36.4M • Governor Martinez proposes $9M of general state funds to augment county funding • Total of $45.1M needed by state to maximize federal match—total funds $192.1M

18. Emergency Services Emergency Physician Providers contacted • Apogee • EmCare • Hospital Physician Partners (Lovelace Health System provider) • Pegasus Emergency Management (CHS system provider) • Presbyterian Hospital & Healthcare Services • Schumacher Group • University of New Mexico Medical Group

19. Three Ways to Positively Affect the “GAP” in MEDICAID reimbursement • Reduce overall costs of operations— • costs for the proportionate share of Medicaid will be reduced • Decrease Medicaid volume— • direct reduction on Medicaid costs, reimbursement gap, and losses • Increase revenue from non-Medicaid volume— • profit generated from these services will reduce the Medicaid reimbursement gap

20. Increasing Medicare Reimbursement by Critical Access Hospital Designation -1 • Critical Access Hospitals (CAH) receive cost-based reimbursement from Medicare versus prospectively determined inpatient and outpatient fixed reimbursement rates. • Some hospitals find that cost-based reimbursement is advantageous, and some will not. Each hospital must perform its own financial analysis. • The Critical Access Hospital program is a Medicare reimbursement status only. • Critical Access Hospital is a change in hospital provider designation for Medicare, and not a downgrade.

21. Increasing Medicare Reimbursement by Critical Access Hospital Designation -2 • Conversion to Critical Access Hospital (CAH) status does not mean losing services. Many hospitals can expand services knowing that Medicare costs will be 100% reimbursed. • CAHs must maintain an annual average length of stay of 96 hours or less for their acute care patients. • CAHs may have a maximum of 25 acute care inpatient beds. • CAHs must provide 24-hour emergency services. • As of June 30, 2013, there are 1,332 certified Critical Access Hospitals located throughout the United States and nine in New Mexico.

22. East Campus Changes • Behavioral Health Services (BHS) Service Lines • inpatient addictions recovery program • outpatient individual therapy counseling • The BHS service lines have lost significant money for many years. Medicaid volume in Addictions Program = 94% in 2013 • The buildings at East Campus are aging and very expensive to maintain • Inpatient Addictions Recovery program closing 2/28/14 • Outpatient Therapy Counseling relocating to Main Campus on Red Rock Drive

23. Rehoboth McKinleyChristian Health Care Services