ETMC Gilmer closes due to low patient numbers and declining reimbursement rates

Published 10:41 am Friday, November 14, 2014

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Fewer patients and declining reimbursement rates from Medicare and Medicaid have led hospital officials to close the doors on East Texas Medical Center-Gilmer.

Effective Dec. 12, the Upshur County hospital will no longer provide emergency, laboratory and imaging services. On Oct. 31, the hospital stopped providing inpatient care. The ETMC First Physicians Clinic there will close in February.

“Our intent was to continue operating the emergency department and associated ancillary services,” Perry Henderson, senior vice president of affiliate operations said in a press release. “Once we ceased inpatient care, low usage of these areas created financial pressures and forced us to make the difficult decision to close. We will provide whatever assistance we can to the employees who will be displaced by the closure.”

ETMC Gilmer had a loss of more than $2 million in fiscal year 2014, which ended Oct. 31, according to Henderson. The facility’s payer mix was 35 percent Medicaid, 18.6 percent Medicare, 20.1 percent self-pay, and 23.7 percent commercial insurance.

“We honestly don’t know what the future will hold for rural hospitals,” Henderson said. “The situation with reimbursement continues to be fluid.”

He noted a recent USA Today article that says “…federal regulators — along with state governments — are now starving the hospitals they created with policies and reimbursement rates that make it nearly impossible for them to stay afloat.”

“That’s an accurate statement,” Henderson said. “The ETMC mission has been one of commitment to maximizing healthcare in local communities. We believe that’s important to patients’ physical and mental well being, and we will do everything possible to continue to support local hospitals. We believe that’s good for East Texans.”

Henderson said the closures would impact 80 employees.

Averaging only about two to four patients per day, officials have said that less than 10 percent of the hospitalizations in Upshur County were at the Gilmer hospital.

ETMC has struggled to sustain operations in rural areas in recent years, including EMS services. Last year, ETMC EMS administrators announced that it would cut ambulance services in Gladewater, Frankston, Van, Alto, and Wells. They later negotiated a new agreement to continue providing EMS services in Alto and Wells.

In June, its EMTC First Physicians Clinic in Van closed. Officials also announced they would cut inpatient services at the Mount Vernon hospital and will not renew its management lease for the Clarksville hospital when the current contract expires in 2016.

A decrease in money that the health system gets from Medicare reimbursements yielded “unsustainable losses.” For the last three years, as part of a provision in the new health care law, hospitals are assessed penalties when patients return too soon after discharge. Government officials have said high readmission rates cost the program an additional $17.5 billion annually, or 20 percent of all Medicare spending.

During the first year in 2012, the maximum penalty assessed was 1 percent. It increased to 2 percent in 2013 and 3 percent in 2014.

If a hospital is penalized in this third round, the penalty will be applied for each Medicare patient stay between Oct. 1 and Sept. 31, 2015.

Nine of ETMC’s hospitals are among the 213 in Texas and 2,610 in the nation to be penalized this year for readmission rates. About 56 percent of Texas hospitals were penalized and average a penalty of .52 percent.

Among the hospitals in the ETMC Regional Healthcare System to receive a penalty this year are: Tyler, .08 percent; Athens, 1.63 percent; Crockett, 1.51 percent; Jacksonville, .57 percent; Mount Vernon, .37 percent; Trinity, 1.55 percent; Carthage, .43 percent; Clarksville, .12 percent; and Henderson at .81 percent

Four other East Texas hospitals saw a penalty this year: Good Shepherd Medical Center in Longview, .78 percent; Good Shepherd in Marshall, 1.20 percent; Mother Frances Hospital in Tyler, .20 percent; and UT Health Northeast at .01 percent.

ETMC began operating at the Gilmer facility in 1997, which had housed Gilmer Medical Center. Deleisa Johnson, ETMC affiliate marketing manager, said no decision has been made about what will happen with the facility.