LUMBERTON — Inpatient psychiatric services at Southeastern Regional Medical Center may become a thing of the past if Southeastern Health and Eastpointe, the managed care organization that pays the hospital to supply the services, cannot negotiate contract renewals.
As of Friday, negotiations were ongoing, according to a hospital spokesperson.
“Southeastern Health initiated good-faith discussions with Eastpointe MCO in early May 2014 to negotiate contract renewals for inpatient psychiatric services,” Thomas Johnson, Southeastern Health’s chief financial officer, said in a statement. “To date, Eastpointe has refused to engage in open and earnest negotiations.”
Ken Jones, Eastpointe’s chief executive officer, disagrees with Johnson.
“We have always had a good relationship with the hospital,”Jones said. “We hope to be able to work something out.”
Southeastern Health contends that for three years Eastpointe has paid substantially less in Medicaid funding for mental health services than what other insurers pay for the same services.
“Southeastern Health is merely requesting a rate that offsets the loss of supplemental Medicaid payments that were paid in addition to the base rate, and previously funded LME professional services costs, while Eastpointe continues to retain funds inclusive of supplemental hospital payments available that they then retain in their fund balance,” Johnson said. “This practice is widely used by many managed care organizations as they direct more risk onto the providers of care while withholding appropriate reimbursements. The rate being requested simply restores historical reimbursement, getting us closer to just covering costs.”
Jones argues that the rate being paid to Southeastern Regional Medical Center — as the only hospital providing the services in this region — is based on rates established by the state Division of Medical Assistance.
According to Jones, Southeastern Health is requesting an increase from $463.95 per bed per day to $1,575.61.
“They are asking three times more, and we have never spent that much for any of the hospitals we serve,” Jones said. “This could cost our organization between $2 million and $3 million in additional funding. It could also set a precedent.”
Jones noted that Eastpointe, which provides Medicaid funding for entities offering mental health services in Robeson and 11 other counties in Eastern North Carolina, also has to operate by a set budget. As a managed care organization, it does have the authority to negotiate Medicaid rates with the state.
Southeastern Health also contends that Eastpointe has not been reimbursing the hospital for the increasing number of indigent patients that are using the hospital’s psychiatric services each month; is not meeting its obligation as an MCO to assure access to care in a reasonable time and distance; and has consistently refused to approve out-of-network payments for SRMC beds while the patient is cared for in the hospital’s Emergency Department for two to three days.
Jones said that his organization has been giving Southeastern an additional half million dollars annually to offset the cost of indigent care.
“This is something we are not doing for our other hospitals,” he said.
Currently, Southeastern Regional Medical Center is not admitting patients in need of hospitalization for inpatient psychiatric care or alcohol and drug detoxification if their care is controlled by Eastpointe. Eastpointe has the responsibility to locate in-network hospitals for the care of its enrollees, according to Southeastern Health.
The hospital is continuing to serve Eastpointe enrollees in need of emergency care for psychiatric and alcohol-drug detoxification services in the Emergency Department. Once stable, however, SRMC will work with Eastpointe to transfer those patients requiring involuntary commitment to an Eastpointe in-network facility.
According to Southeastern Health, if a sustainable agreement is not reached, Southeastern Regional Medical Center will no longer provide hospital service for patients suffering with mental illness who are enrolled in Medicaid and whose care is controlled by Eastpointe.
“Southeastern Health cannot ensure the continuation of services where its costs are not adequately paid,” Johnson said. “.. Southeastern Health looks forward to resolving this impasse and to its continued provision of excellence in psychiatric care services to our community.”