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Massena Memorial Hospital, facing $2 million loss this year, hires consultant to look at possible privatization

Posted 11/19/13

By ANDY GARDNER MASSENA – Facing a nearly $2 million loss this year, the Massena Memorial Hospital Board of Managers unanimously voted to hire FreedMaxick Healthcare to look at the financial side …

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Massena Memorial Hospital, facing $2 million loss this year, hires consultant to look at possible privatization

Posted

By ANDY GARDNER

MASSENA – Facing a nearly $2 million loss this year, the Massena Memorial Hospital Board of Managers unanimously voted to hire FreedMaxick Healthcare to look at the financial side of the hospital’s potential transition to a private non-profit.

“They’re supposed to come back with all the scenarios for the future,” Chairman Andrew Spanburgh said.

“It should have a four to five-week turnaround,” board member Tina Buckley said.

Their work is contracted to cost up to $32,000.

Board member Gary Borgosz said he was concerned about potential additional monetary liabilities. He noted that the deal says MMH is financially responsible for any delays or additional unexpected costs.

“I am not anticipating any delays on our end,” MMH Chief Financial Officer Jim Smith said.

The hospital is looking at the conversion in light of rising costs and dwindling reimbursements.

According to a financial and statistical summary provided Monday night, the hospital is looking at a $1,923,772 net loss to date for 2013 – a 19.27 percent increase over the same time period last year.

MMH Chief Executive Officer Charles Fahd told the board if not for nearly $1 million in Medicaid and Medicare “meaningful-use” reimbursements, that figure would be “significantly higher.”

The net loss for October was $6,187, a 91 percent decrease from October 2012.

The hospital is looking at a $15 million loss in reimbursements and is under a directive from the state health commissioner to look at the potential of merging or collaborating with other facilities. Its options for this are limited as a municipal hospital.

The projected losses include $10.5 million reduction in Medicare reimbursements stemming from the Affordable Care Act, $1.9 million in cuts from Medicaid reimbursements as a result of the federal sequester, and a $2.7 million reduction because of in-patient coding adjustments, which determines how much a facility is reimbursed for treating a patient.

Contributions to employee retirement programs have risen exponentially over the last decade and they are expected to keep going up. The hospital must pay $4.4 million into the state retirement system by Dec. 1, compared to a $124,200 contribution in 2002. That is expected to go up to $4.8 million in December 2014.