Medicare rule change threatens hospital project, hospital's future

Hungry Horse News

A proposed change in Medicare rules could stop North Valley Hospital's plans for a new building and threaten the very future of the hospital itself.

North Valley Hospital currently has a "critical access" designation by Medicare- which, in short, means it gets more Medicare reimbursement than other hospitals.

The designation is designed to keep small rural hospitals that serve isolated communities in business.

Losing that designation has jeopardized the hospital's plans to build a new facility off Highway 40, said president and CEO Craig Aasved on Monday.

The new hospital would be funded through a Housing and Urban Development loan guarantee. But without the critical access designation, the loan may not go through, HUD officials have told the hospital.

All of this comes as the hospital puts its new building out to bid in about a week-a groundbreaking was planned for May 12.

The hospital has already put about $3.2 million into the project. That covered land costs and design fees. The HUD-backed loan would cover $30 million needed for construction, Aasved said.

Without the loan, the project couldn't move forward, he said.

The critical access designation also has a significant impact on the hospital itself, with or without a new building.

Aasved termed the future of the hospital as "very bleak" without the designation. The designation represents about $1 million in additional funding each year.

North Valley doesn't exactly meet all the criterion for a critical access designation-but it received a waiver by the state.

Now Medicare wants to exempt hospitals that received a state waiver from getting the designation. The Medicare rule hasn't actually been finalized, however, and there is the possibility that North Valley could be grandfathered in.

Medicare began looking at the rule after a two hospitals in Idaho had a dispute - one was critical access, the other wasn't. The one with critical access designation wanted to build a brand new hospital next to the one without the designation.

See, one aspect of a critical designation is that the hospital has to be at least 15 miles from another hospital. North Valley is actually too close to Kalispell Regional Medical Center to meet the space criteria.

But KRMC isn't too worried about the competition. In fact, KRMC wrote a letter in support of North Valley.

Both Sens. Conrad Burns and Max Baucus have also written letters to Medicare officials asking to keep North Valley's critical access designation intact - and negotiations were still ongoing as the Hungry Horse News went to press.

But Aasved also called for the community to write Montana's Congressmen as well.

In the meantime, the hospital is going to continue with the bid process and hope for the best. Delaying the project a year will increase the cost about 6 percent, Aasved said.

The new hospital won't be bigger than the old one. At 70,000 square feet, it will actually be slightly smaller.

But it will be updated and modernized. Remodeling the old hospital isn't an option, Aasved said. For one, it doesn't meet earthquake standards and it also has asbestos problems.

Aasved urged people to write or call their congressmen. Baucus can be reached at Max@baucus.senate.gov, burns at www.burns.senate.gov and Congressman Denny Rehberg at www/house/gov.rehberg. Their addresses and phone numbers are also posted in the phone book.

Community forums planned for 7 p.m. April 11, at North Valley Hospital's Community Room or 7 p.m. April 12, in Columbia Falls Community Center