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Published: Wednesday, 8/3/2005

Workers' comp bureau outlines hospital cuts

BY JOSHUA BOAK
BLADE STAFF WRITER
Reduced payments would not hurt injured workers, says BWC official Tina Kielmeyer. Reduced payments would not hurt injured workers, says BWC official Tina Kielmeyer.
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COLUMBUS - Attacked for inflating hospital profits, the Ohio Bureau of Workers' Compensation yesterday proposed cutting payments to health centers.

Meeting at the bureau's headquarters, representatives for employers, injured workers, and hospitals watched as interim administrator Tina Kielmeyer outlined the bureau's plan to cut hospital payments.

"We consider this to be fair and would not reduce or deny access for injured workers," Ms. Kielmeyer said.

The proposal would slash the percentage of a hospital's charges reimbursed by the bureau. As of this October and for the following 15 months, the bureau would repay 55 percent of inpatient charges and 50 percent of outpatient charges.

Many hospitals could lose money treating injured workers if the new plan is implemented, a bureau report said. The report concluded that 61 out of 122 inpatient hospitals and 26 out of 132 outpatient hospitals would lose money.

Because of the reduced percentages, the bureau would underpay Wood County Hospital and Defiance Hospital, among other institutions, over the next 15 months.

Though hospitals currently make money from most bureau claims, some do lose money with the current system. "Under the previous reimbursement plan, there are hospitals treating workers at below cost," said bureau spokesman Jeremy Jackson.

Because the majority of bureau payments cover outpatient treatments, Mr. Jackson said that hospitals would still, on average, make back their costs and have an incentive to treat injured workers.

Under the existing structure, the bureau repays 70 percent of inpatient charges and 60 percent of outpatient charges. Based on a hospital's "sticker price," the current structure lets hospitals milk the bureau, according to a study released last month by Service Employees International Union 1199.

The study found that bureau payments gave hospitals a $544 million net gain during the past seven years.

Costs are different from charges, as they relate only to the direct price of a procedure. Furthermore, costs are based on Medicare averages, which hospitals say ignore the total expense of maintaining staff physicians and research.

Ms. Kielmeyer estimated that the new plan would save the bureau $50 million, while giving an outside consultant time to craft a long-term repayment plan.

Few of the meeting's attendees were completely satisfied by the bureau's solution, a rehash of similar cuts in percentage of payments made since 2003.

"I commend them for their effort and am disappointed that they still based it on charges instead of cost," said Scott Courtney, executive vice president of SEIU 1199 and champion of a proposal to have the bureau reimburse hospitals at cost plus 10 percent.

Charles Cataline, a policy director for the Ohio Hospital Association, had anticipated the worst when he came to the meeting. The representative of the state's hospitals drew a bulls-eye on the folded-paper nameplate in front of him.

Mr. Cataline said that measuring a payment structure by its averages would hurt hospitals.

Without any exact numbers, it would be premature to judge how the change would affect Toledo-area hospitals, said Sarah Bednarski, a spokesman for Mercy Health Partners, which runs seven hospitals in northwest Ohio. "I'm sure it has an impact, but I'm not sure what that impact is or what it means to our hospitals," she said.

Pat Grischow, who manages government affairs for Canton-based Timken, a ball-bearing manufacturer, said during a feedback discussion with Ms. Kielmeyer that the proposal distracted from the bureau's core mission.

"I'd like to know when we lost focus on the injured worker," she said. "All we seem to be talking about is how much we're going to pay."

Contact Joshua Boak at:

jboak@theblade.com

or 419-724-6050.



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