Kilmer blasts agency for lack of answers on reimbursement cuts

Centers for Medicare and Medicaid Services policy forced Olympic Medical Center cuts

PORT ANGELES — U.S. Rep. Derek Kilmer sent a strongly worded letter to the Centers for Medicare and Medicaid Services, lambasting the agency for refusing to answer questions after implementing policy that has forced Olympic Medical Center — where he was born — to make significant cuts and slow expansion plans in the coming years.

Kilmer wrote to CMS Administrator Seema Verma on Friday that the rule is based on “flawed rationale” and that it hurts rural regions across the country that are facing a shortage of health care providers.

“The idea that cutting reimbursement rates to these existing providers will somehow address this shortage is completely illogical,” the Gig Harbor Democrat wrote.

“The fact is, this decision will reduce access to care for rural patients and kill jobs in rural communities.”

Last month, the federal Centers for Medicare and Medicaid Services announced it would move forward with 60 percent cuts to Medicare reimbursements at off-site clinics, despite the more than 1,700 letters and comments from Clallam County residents arguing against the measure. There were about 3,000 comments from across the country.

The final rule phases in the 60 percent cut to OMC in practice expense reimbursement for patient visits more than 250 yards from the Port Angeles hospital.

As a result, reimbursement to OMC will be cut by about $1.7 million in 2019 and another $1.7 million in 2020, officials said. The cost over 10 years is about $47 million. The cuts do not affect other North Olympic Peninsula hospitals.

Olympic Medical Center — which recently slashed $1.7 million from its 2019 budget — is a named plaintiff in a lawsuit filed earlier this month against the U.S. Department of Health and Human Services over cuts to Medicare reimbursements at off-site clinics.

OMC CEO Eric Lewis said he appreciates Kilmer’s engagement to reverse CMS’s decision to cut off-campus hospital based clinic expense reimbursements.

“His support for residents of Clallam County and local health care services is clear in this letter and in his actions ever since he has been in Congress,” Lewis said in a statement.

Kilmer wrote that OMC provides a clear example of the consequences of the new rule. He said the hospital has developed a sophisticated network of clinics to provide services close to where patients live, so they don’t have to drive for hours to receive high-quality, advanced medical care.

“As a direct result of these cuts, the hospital will have to relocate services to its main campus or eliminate them altogether, which will drastically reduce the availability of care in communities like Sequim that are served by one of OMC’s existing clinics,” Kilmer wrote.

He also wrote that Congress took steps to prevent these effects in 2015 when it passed the Bipartisan Budget Act of 2015, which contained a provision affirming that no existing off-campus hospital clinics would have their payment rates reduced. Congress also enacted the 21st Century Cures Act, which he said further reinforced those protections.

“This rule is in direct violation of Congressional intent and poses an existential threat to the patients I represent who depend on these clinics to provide quality medical care,” Kilmer wrote.

Kilmer wrote that CMS has refused to answer questions after implementing the policy. He said he has asked whether the Rural Health Council was consulted, what data or evidence CMS has to justify reducing the distance used to determine if a facility is “off-campus,” why CMS didn’t consider how the rule would exacerbate existing challenges and whether CMS evaluated the economic impacts of the rule.

“After CMS blatantly ignored the concerns raised by my constituents and the express guidance delivered by Congress, and given the acutely negative effects this policy will have on rural health care providers in areas where there is already a shortage of doctors, I asked your agency for more information,” Kilmer said.

He described a conversation he had with Demetrios Kouzoukas, director for the Center for Medicare, as “a disappointment.” The letter says that while Kilmer appreciates that there are limits to what can be discussed due to the pending litigation, it is “unacceptable to use pending litigation as an excuse to avoid responding to any of my substantive questions.”

Kilmer reminded CMS that he is the vice-ranking member of the House Appropriations Committee. He said he looks forward to receiving information before the committee begins its work on Fiscal Year 2020 appropriations bills this spring.


Reporter Jesse Major can be reached at 360-452-2345, ext. 56250, or at

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