Olympic Medical Center is a comprehensive health care provider serving the residents of Port Angeles, Sequim and surrounding communities. Inpatient services include a level-three trauma designated emergency department, surgical services, and labor and delivery. Outpatient services include cardiac care, cancer care, diagnostic imaging, physical therapy and rehabilitation, laboratory, orthopaedics, surgical services, sleep center, home health, primary care, a walk-in clinic and specialty physician clinics.
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OMC to Revise 2019 Operating and Capital Budgets to Address CMS Site Neutral Cuts

November 9, 2018 -
Maintaining all current services in Port Angeles and Sequim campus is in the plan
PORT ANGELES – With the recent decision by the Centers for Medicare and Medicaid Services (CMS) to cut Olympic Medical Center’s off-campus provider-based clinics by 30% in 2019 and an additional 30% in 2020, Olympic Medical will be revising its proposed 2019 operating and capital budgets.

"This Medicare cut in 2019 will result in $1.7 million less in revenue for OMC,” says Eric Lewis, chief executive officer, Olympic Medical. 

Lewis stated that in determining how to adjust the budgets, leadership will adhere to the following priorities:

  • Olympic Medical will maintain current services in Port Angeles and Sequim, continuing to focus on high quality, safety and excellent customer service for patients;
  • Olympic Medical will continue to be guided by its mission, vision and values;
  • The 2018-2020 Strategic Plan will continue to be Olympic Medical’s roadmap;
  • Employees remain Olympic Medical’s most important strength; and 
  • Olympic Medical must change and improve in order to be successful in the future. 

"Given these priorities, we are in the process of developing our plan,” says Lewis. "Our goal is to have a plan in place on November 26.”

General direction 

"We will be strategic and thoughtful on these budget adjustments,” says Lewis. "We remain committed to the direction in our Strategic Plan, and will be listening for ideas to transform operations and improve efficiencies.”

Olympic Medical plans to maintain all current services in Port Angeles and Sequim. New services planned for 2019 may be delayed to a future year.

Olympic Medical employs more than 1,500 staff, and no layoffs are planned. "Instead, Olympic Medical will focus on managing overtime and labor costs, and will slow down hiring,” says Lewis. "In the last two years, Olympic Medical has added more than 200 net jobs, and has a strong workforce. Our employees are the key to our future and we need to maintain our current staffing to be successful.” 

Operating expenses, such as supplies, outside services and business travel, will be looked at for expense reduction. Capital equipment and construction spending will be reduced in 2019; however, Olympic Medical will continue with the long-planned and needed expansion at Olympic Medical Cancer Center in Sequim, and the Central Sterile Processing expansion at the hospital. 

Legislative solution pursued

Olympic Medical will continue to advocate for a legislative fix to reverse the CMS cuts to reimbursement. "In its final rule, CMS essentially overturned Congressional action in 2015 that grandfathered Olympic Medical’s existing off-site hospital-based clinics. We will urge Congress to restore reimbursement to our off-site clinics,” says Lewis. "Because there is strong bipartisan support for rural health care, we will ask elected officials from both sides of the aisle to work with us to correct the poor policy decision by CMS.” 

Legal remedy sought 

The American Hospital Association (AHA) is sponsoring a lawsuit against CMS challenging the site neutral policy changes, and has asked Olympic Medical to be a named plaintiff in the suit along with at least two other hospitals across the U.S. The AHA sponsors the legal fees, while Olympic Medical will provide testimony and evidence. The Complaint will be filed next week in federal district court in the District of Columbia.  

The suit will allege that CMS exceeded its authority by implementing Medicare cuts contrary to the bipartisan legislation Congress enacted in 2015 grandfathering reimbursement for existing off-site hospital-based clinics. The suit will also challenge the CMS decision to make the reimbursement non-budget neutral, meaning that the cuts reduce overall Medicare funding for outpatient hospital services, rather than redirecting funds to other sites of outpatient care. "This adds insult to injury, and we believe CMS acted unlawfully,” Lewis says. "The agency’s action undermines the intent of Congress to protect hospital-based outpatient departments, and because of the essential nature of these off-site clinics to our community, it is critical to challenge this action to preserve local healthcare.”  

Olympic Medical and the other named plaintiffs will be evaluating the merits of seeking a preliminary injunction to enjoin CMS from implementing the cuts on January 1, 2019. "As a community, we are harnessing our resources to challenge the CMS policy decision,” according to Lewis. "We are grateful for the tremendous outpouring of support from our patients, employees, friends and neighbors during the rulemaking process. We all need to continue to fight to protect health care services for Clallam County.”  

Developments will be posted on Olympic Medical Center’s website and community members are invited to follow Olympic Medical Center on Facebook for updates.  
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