Wednesday, July 30, 2014     Volume: 28, Issue: 52
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Troublesome numbers

With reform legislation stalling, a state nurses union releases local hospitals' billing figures

BY PATRICK M. KLEMZ

Templeton’s Twin Cities Community Hospital landed in the Sacramento spotlight May 14 with the release of a report by a nurses union pushing health care reform. The California Nurses Association (CNA) published the report just as Assembly Bill 975—a proposed law to ratchet up state regulation of nonprofit hospitals—seemed to stall in committee.

According to the CNA, the for-profit Twin Cities ranked among the highest in the state with a charge-to-cost ratio of 813 percent. In other words, the union asserts that for every dollar of care provided by Twin Cities, the hospital bills its patients or their health care provider $8.13.

“They’re one of the big ones,” union spokesman Chuck Idelson said of Twin Cities. “That rate is very high.”

A lobby representing the hospital differs with the union’s characterization of the data. CNA compiled the numbers from the 2010 and 2011 entries in a Medicare cost report database made public May 8 by the federal agency that administers Medicare and Medicaid. The California Hospital Association, CNA’s lobbying adversary in Sacramento, responded that the numbers don’t actually reflect what Medicare or anyone else pays for healthcare services.

“CNA is trying to capitalize on an announcement last week by the federal government about hospital charges, and trying to tie it to their failed agenda to advocate for a piece of legislation that is not going to succeed,” hospital association spokeswoman Jan Emerson-Shea said. “The two issues have nothing to do with each other.”

The Medicare cost reports originated from standardized price lists called chargemasters. The health care industry calls the chargemaster prices meaningless, stating that the cost reports merely provide a starting point for negotiating health care charges.

Twin Cities business development director Trish Bartel said the hospital’s parent corporation, Tenet HealthSystems, would release a statement regarding the union figures, but did not respond as of the deadline. New Times expects to publish the hospital’s response in the print version of this story, set to run May 23.

Several other local hospitals also appeared in the union figures. CNA said the for-profit Sierra Vista Regional Medical Care Center registered a charge-to-cost ratio of 661 percent, followed by the nonprofits French Hospital (577) and Marian Regional Hospital in Santa Maria (487). All three also came in above the purported state average of 452 percent.

The CNA report marked the latest volley in a back-and-forth between the nurses union and the hospital association over A.B. 975. The bill introduced by Assemblyman Bob Wieckowski (D-Fremont) would require nonprofit hospitals to develop a public management plan to serve the local community’s health care needs. The plans would bind the hospital to meet the stated goals and become part of the public record.

Wieckowski’s bill takes a step beyond the new federal mandates adopted by Congress through the 2010 Affordable Care Act. That law changed the Internal Revenue Code to require nonprofit hospitals to provide increased access to care in order to keep tax-exempt status.

A.B. 975 passed the Assembly health committee 12-7 on April 4 and then got stuck in the appropriations committee. It landed in suspend status May 8, and theoretically awaits a public hearing that may never come. Wieckowski spoke at a press conference held by CNA on May 14 shortly after the union released the report.

“It was completely a non-event in Sacramento,” Emerson-Shea remarked. “CNA is trying to revive a piece of legislation that is on life support.”

The hospital association further suggested that the union repackaged the Medicare data specifically to call out for-profit and private nonprofit hospitals that resisted attempts to unionize the workforce.

CNA responded that it began tracking Medicare cost reports more than 10 years ago. The union sees a direct correlation between the charge-to-cost ratios and the legislative goal of holding nonprofit hospitals accountable for providing charity care. As public benefit corporations, California nonprofit hospitals receive state and federal tax-exemptions worth $1.8 billion per year, by union estimates.

“This illustrates part of the reason why A.B. 975 is so important,” Idelson said. “They are conducting a full court press to defeat it.”

In August 2012, State Auditor Elaine Howle said hospitals across the state do a solid job complying with the current regulatory framework, including the new Affordable Care Act provisions. However, the report also calls on the Legislature to establish standards to make sure hospitals comply with their charity obligations.

Staff Writer Patrick M. Klemz can be reached at pklemz@newtimesslo.com.