Mainebiz

W W W. M A I N E B I Z . B I Z 11 J U LY 8 , 2 0 2 4 F O C U S H E A L T H C A R E / W E L L N E S S them during the pandemic. In addition, growing enrollment in Medicare Advantage — a health plan offered by Medicare-approved private insur- ers — is eating into the bottom line for the very entities the federal "critical access hospital" desig- nation was meant to buttress when it was created in 1997. Medicare Advantage, for example, may not cover all the services traditional Medicare does, and prior authorizations can lead to increased denials, according to Chartis. Today in Maine, 24 of the state's 38 hospitals are in rural areas, home to an estimated 40% of the population in 11 counties. Out of those 24, 10 had negative operating margins in the third quarter of 2023, according to data compiled for Mainebiz by Chartis. at adds up to an average operating margin for all 24 at 0.8%, or just above break-even. "It's not a great time for hospitals in general, and it's even more difficult for rural hospitals, especially those that are not within a system," says Marie Vienneau, president of Northern Light Mayo Hospital, a 25-bed critical access hospital in Dover-Foxcroft, and the 15-bed Northern Light CA Dean Hospital in Greenville, both of which had third-quarter 2023 operating margins on the plus side, according to Chartis. 'Innovating to survive' Forced out of necessity to become more resourceful, some of Maine's smaller hospitals are finding ways to invest in upgrades and even expansions. Many are also tackling the shortage of doctors and nurses with new approaches to recruiting and training, whether in-house, with outside help or in collabora- tion with their peers. "Rural hospitals are innovating and investing in order to survive and provide the best care to their patients," says Steven Michaud, president of the Maine Hospital Association. "Infrastructure decays whether we like it or not, and it is imperative for the hospitals to invest wherever they can. It also allows them to improve patient safety, service and access to care." In Farmington, Franklin Memorial Hospital is in the process of changing from a fixed-rate Medicare and Medicaid reimbursement model to a cost-based one as a recognized critical access hospital. e locally controlled nonprofit integrated network of rural health care providers, created by Franklin Memorial Hospital in 1991, has been part of the MaineHealth system since 2014. To change its designation, the hospital has down- sized from 65 patient beds to 25, still enough to cope with the patient numbers of recent years. Congress created the CAH designation in 1997 in response to over 400 rural hospital closures during the 1980s and early 1990s. e law has been tweaked over the years, most recently with a broader definition of the required distance between facilities. e main reason for Franklin's conversion is to get higher reimbursements. "Commercial payers pay us about 50 to 60 cents on the dollar — sometimes a little more, sometimes a little less, depending on the contract negotiation — for what we bill," says Barbara Sergio, FCHN's At Rudman Winchell, we specialize in managing trusts and estate plans, providing peace of mind with personalized fiduciary services. Our expert care ensures your loved ones' financial and legal well-being, allowing you to focus on what truly matters. Partner with Maine's Trusted Advisors. r u d m a n w i n c h e l l . c o m BANGOR 84 Harlow St. • (207) 947.4501 ELLSWORTH 140 High St. • (207) 374.5833 Protecting Your Family's Future with Expert Care and Diligence C O N T I N U E D O N F O L L OW I N G PA G E » S O U R C E : Q3 2023 data compiled for Mainebiz by Chartis Group LLC OPERATING MARGINS AT MAINE RURAL HOSPITALS Northern Light Blue Hill Hospital Northern Light Sebasticook Valley Hospital Bridgton Hospital Stephens Memorial Hospital Northern Light Mayo Hospital Mount Desert Island Hospital Rumford Hospital Down East Community Hospital Northern Light CA Dean Hospital Waldo County General Hospital Redington-Fairview General Hospital Millinocket Regional Hospital Houlton Regional Hospital Franklin Memorial Hospital Northern Light Maine Coast Hospital Calais Community Hospital Northern Maine Medical Center Cary Medical Center Lincolnhealth Pen Bay Medical Center Penobscot Valley Hospital Northern Light AR Gould Hospital Mid Coast Hospital Northern Light Inland Hospital 15.1% 13.8% 12.7% 10.6% 6.5% 5.2% 5.1% 3.0% 3.0% 2.1% 1.3% 1.2% 0.8% 0.1% −1.2% −1.4% −1.7% −3.1% −4.4% −7.0% −7.0% −7.1% −8.7% −11.5%

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