A recent lawsuit settlement could force some rural health clinics in West Virginia to declare bankruptcy and close.
The court-ordered settlement changes how the state reimburses health clinics for treating low-income patients on Medicaid.
Dr. Mark Tomsho, a Summersville pediatrician, told state lawmakers Tuesday that his clinic would lose $750,000 a year because of lower Medicaid reimbursements.
“It’s absolutely crippling to our clinic,” said Tomsho, whose practice has a $3 million-a-year operating budget.
To make matters worse, the settlement also requires some rural health clinics to reimburse the state and federal government for charges dating back to October 2012. Tomsho estimated that his clinic owes $1 million under the formula.
“The number is massive, and it is a bankrupting number,” Tomsho told members of a joint House-Senate health committee during legislative interim meetings in Charleston Tuesday. “There is absolutely no way to survive with a repayment of that sort.”
At one point, Tomsho choked up while talking about the 11,000 patients his clinic serves each year and the 32 employees who work there.
“I don’t even want to think about what’s going to happen to the children we see, to my employees and to the other practitioners who work with me,” he said.
West Virginia has about 40 rural health clinics. Most provide primary health-care services.
State health officials said they wouldn’t know exactly how many rural clinics must pay back money and face lower Medicaid reimbursement rates — an estimated 30 percent to 50 percent cut — until after the clinics file cost reports. The clinics must submit reports by June 30.
“You can understand the alarm we had for our own clinic, and it was an immediate concern for all the rural health clinics,” Tomsho said. “If it is hurting us, there’s a good chance it will hurt all rural health clinics.”
The new rates and Medicaid repayment orders won’t take effect until later this year.
“Do you foresee this could put some of these clinics out of business?” asked Delegate Ricky Moye, D-Raleigh.
“Yes, it could impact them to that extent,” said Karen Villanueva-Matkovich, a lawyer with the state Department of Health and Human Resources.
The Medicaid reimbursement changes were prompted by a 2011 lawsuit filed in federal court by eight larger healthcare facilities — called Federally Qualified Healthcare Centers. West Virginia has 27 such health centers. Plaintiffs included Cabin Creek Health Center, FamilyCare in Charleston and Valley Health in Huntington.
The larger health centers alleged that the state Bureau of Medical Services miscalculated Medicaid reimbursement rates for years.
Under the settlement, seven of the eight large healthcare centers, as well as some of the other 19 federally qualified facilities, will be reimbursed at higher rates. Some health centers also will get a windfall for being shortchanged in previous years.
“There will be increased reimbursement to some entities and decreased reimbursement to others,” Villanueva-Matkovich said.
Tomsho said DHHR didn’t properly notify the rural health clinics about the lawsuit settlement and reimbursement changes.
“A notice on a website is not notification,” he said. “We talked to many other rural health clinics, and they too had no idea this was even happening.”
State lawmakers said Tomsho’s clinic and other healthcare clinics shouldn’t be penalized. They urged DHHR officials to reopen the lawsuit.
“It’s just so frustrating that if you do all the right things and hold your costs down and provide this care that you’re really just going to get knocked out,” said Sen. Ron Stollings, D-Boone, who heads the Senate health committee.
State health officials said they sympathize with the rural health clinics and would help them with repayment plans.
“Our hands are tied,” Villaneuva-Matkovich said. “We are very sorry there are entities that are going to be impacted to such extent. But it is a federal law, and it’s a federal judge that ordered these modifications.”
Sen. Evan Jenkins, R-Cabell, scolded DHHR officials, saying doctors such as Tomsho should be “outraged.”
“[The Bureau of Medical Services] just said we were doing [Medicaid reimbursements] wrong,” Jenkins said. “Well, figure out a way to do it right and help these people. I want an acknowledgment of responsibility instead of just finger-pointing and excuses.”
Reach Eric Eyre at email@example.com or 304-348-4869.