PUBLISHED: October 27, 2011

Hospital cuts 3,500 patients from roll

Tom Fahey | Union Leader | Link to article

Hospital cuts 3,500 patients from rolls

CONCORD — The Lakes Region's largest health care company, LRGHealthcare in Laconia, plans to eliminate regular care for its 3,500 Medicaid patients next month.

LRGHealthcare cited the strain that new state budget cuts have placed on its finances as the reason for the decision. LRGHealthcare has a dozen medical practices throughout the region, including offices in Andover, Franklin, Laconia, Meredith, Tilton and Moultonborough.

Gov. John Lynch said the move is “irresponsible and unnecessary,” and out of keeping with the actions of a nonprofit.

Cutbacks will start no later than mid-November, LRGH said. They will not affect patients in the N.H. Healthy Kids program or those receiving pre-natal care at Caring for Women.

LRGHealthcare said in a published notice that its board voted to make the change, “in response to unprecedented financial challenges faced by the organization and other hospitals and health care institutions across the state.”

It said LRGHealthcare will continue to provide emergency services to Medicaid patients at Laconia Regional General Hospital and Franklin Regional Hospital. It plans to help patients move their records when they find new doctors and clinics for routine care.

LRGHealthcare is the third hospital group in a week to cut back on care for the poor. Hospitals in Dover and Rochester announced changes last week.

Lynch said LRGHealthcare did not notify state Medicaid officials before it sent letters to the patients who are affected.

He noted that the state budget did not cut rates for physician services.

A group of 10 hospital groups, including LRGHealthcare, have filed a federal lawsuit challenging the rates at which the state reimburses them for Medicaid care.

Lynch said, “It seems LRGHealthcare is punishing patients to advance its political and legal case. It is completely irresponsible for LRGH to deny access to health care to those citizens who can least afford it — and it is contrary to its mission as a nonprofit.”

He said the Attorney General's Office should investigate whether LRGHealthcare and its affiliated medical practices still warrant nonprofit status.

Chief Financial Officer Henry Lipman said Wednesday that the organization has struggled with profitability for years, continually looking for ways to cut costs. It faces a $4 million shortfall this year, he said.

When the Legislature passed a budget that put more Medicaid tax burden on hospitals, “that was the straw that broke the camel's back,” Lipman said. The budget changes that cut reimbursement for uncompensated care will cost LRGHealthcare $9 million annually, he said.

The tax hike on hospitals came after years of cuts the state made in Medicaid payments to hospitals. The cuts in reimbursement rates lowered payments to LRGH by $4 million a year, Lipman said. Despite cuts in operating costs of $14 million, the hospital needs to cover a continuing operating loss.

It is not alone in reducing care to its poor and low-income patients. Last week, Wentworth-Douglass Hospital in Dover and Frisbie Memorial Hospital in Rochester announced they would cut back on charity care. The hospitals have delivered free care to patients earning up to 300 percent of the federal poverty level. That is being reduced to as low as 200 percent.

Legislative leaders have defended the budget they passed in June as honest and responsible.

House policy advisor Gregory Moore said Wednesday that the state's move toward managed care in its Medicaid program will help providers. Once managed-care companies are selected, they will negotiate contracts with hospitals, clinics and doctors, beginning July 1.

Until then Moore said, the state Department of Health and Human Services will help patients find new health care providers.

Clinics now closed to Medicaid patients are Andover Family Practice; Belknap Family Health in Belmont and Meredith; Caring for Women in Laconia, Franklin and Moultonborough; Franklin Internal Medicine; Hillside Family Medicine in Gilford; Laconia Clinic in Laconia, Tilton and Franklin; Lakes Region Family Practice in Laconia; Moultonborough Family Health; and New Hampton Family Practice.

LRGHealthcare plans to open a new facility next month, but Lipman said the project is not related to the decision about Medicaid care. He said the upgrade is to bring the facility up to modern standards, and is not a driving force on the LRGHealthcare's finances.

“Our entire debt service, the entire mortgage for LRGHealthcare is 5 percent of net patient revenues. The reason we're here is that we've been challenged with operating on very thin to negative margins for a number of years,” Lipman said.