Originally created 06/20/02

MCG Health to get less money



Helping the state take advantage of a funding-opportunity window netted MCG Health Inc. an extra $4.5 million last month, officials said. With that window now closed and other cuts on the way, however, officials are looking at rougher times ahead.

Part of the coping strategy might include a long-term care and rehabilitation unit at the hospital.

In a complex move of bureaucratic money shuffling, MCG Health, which operates Medical College of Georgia Hospital and Clinics, transferred $46 million to the state Department of Community Health, which oversees the Medicaid program.

That money was used to draw an extra $113 million in federal funds under a rule that allows state Medicaid to reimburse certain hospitals up to 150 percent of what Medicare pays those hospitals. The extra money comes from an agreement with the federal government to help states make up the difference on those payments, said Georgia Community Health spokesman Marty Smith.

MCG Health was reimbursed its original contribution plus what amounted to $4.5 million, Chief Executive Officer Don Snell said.

The rule was changed May 14 so that state Medicaids could pay only up to 100 percent of what Medicare pays. Therefore, the state will shell out about $400 million less next fiscal year, which begins July 1. In addition, the government is reducing the extra payments it gives to teaching hospitals to make up for the added costs of medical education, Mr. Snell said.

There is an effort in Congress to reverse both of those cuts and restore the money, Mr. Snell and Mr. Smith said.

In the meantime, MCG Health is going to have to find other ways to make up for the cuts, Mr. Snell said. It is eyeing a 30-to 40-bed long-term acute care hospital unit that could take patients in need of rehab and recovery who don't need full-blown hospital care. The facility would be run separately from the hospital by another company; the list has been narrowed to two companies: Select and SemperCare.

Select already operates a similar unit at Doctors Hospital, and there might be some sort of cooperative arrangement struck between units at both institutions, Mr. Snell said.

MCG Health Inc. is still studying the situation and will have to come back to its board for approval, he said. The company would not only lease space and pay for certain services but also would take on patients, allowing MCG to save up to $2 million a year, Mr. Snell said.

Reach Tom Corwin at (706) 823-3213 or tomc@augustachronicle.com.