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Rice another step closer to sole community hospital designation

WILLMAR -- Rice Memorial Hospital is one step closer to being federally designated as a sole community hospital. Hospitals so designated receive additional reimbursement from the federal government.

Rice made the application in July. Rice's fiscal intermediary, Noridian Administrative Services, which administers Medicare programs in the western U.S., approved the designation and sent the application to Medicare, said Bill Fenske, Rice's chief financial officer.

"That's good for us,'' Fenske said. "This isn't a surprise that we made the next step at all.''

Fenske re-ported on the development du-ring a noon meeting Friday of the hospital's fi-nance committee. Fenske said he did not anticipate any issues with Medicare approving the designation. He hopes the designation will be finally approved within the next 30 to 45 days.

If the designation is approved, Rice Hospital would receive an additional payment of $250,000 to $300,000 a year from the federal Medicare program.

Also, the designation would position Rice Hospital more favorably if Congress adopts additional measures that benefit smaller hospitals.

A sole community hospital must be located at least 35 miles from the nearest similar hospital. In Rice's case it would be St. Cloud Hospital, which is located 60 miles away.

Medicare's sole community hospital program allows special reimbursement advantages to hospitals that provide needed services in geographically isolated areas.

In most cases, rural hospitals see a higher percentage of Medicare patients than urban or suburban hospitals.

A recent analysis concluded Rice would benefit from seeking the designation.

In other business, the committee received a report from Fenske on the hospital's July financial performance.

Fenske said July was a good month because revenue and expenses were better than budget projections, but not as good as the hospital needs to "get back on track.''

The consolidated financial statement for inpatient and outpatient revenue and revenue from Rice Care Center and Rice Home Medical showed net revenue was up 3.4 percent and net expenses were down 2.1 percent, resulting in net revenue of $13,477 compared with a projected loss of $138,916.

"It's better than budget, but still not at the $250,000 to $300,000 per month that we needed to make in order to get back in line with the budgeted net income of $1.7 million,'' he said.

Fenske said it was difficult to say what net income will be at the end of the year, but he said he would be pleased if the hospital reached $800,000 to $1 million.

Rice's financial challenges stem from declining patient volume and declining revenue. Last month, the hospital said it will lay off 13 people to head off financial losses. Fenske said the full impact of the layoffs on the budget will likely be seen in October.

Committee member David Anfinson complimented the hospital's administration on its ability to react to the reduction in income and to reduce expenses accordingly.

Also Friday, Fenske introduced Jackie s, the hospital's new reimbursement and reporting manager. The position was created as a result of a vacancy and reorganization of duties in the finance department, according to Fenske. "We have the same number of staff, just doing different things,'' he said.

Hinderks will help the hospital capture the most reimbursement possible from payers, said Fenske.