Olympic Medical Center commissioners unanimously decided Tuesday to sue the federal government over its cuts to Medicare reimbursement for off-site clinics. (Jesse Major/Peninsula Daily News)

Olympic Medical Center commissioners unanimously decided Tuesday to sue the federal government over its cuts to Medicare reimbursement for off-site clinics. (Jesse Major/Peninsula Daily News)

OMC to sue federal government over Medicare cuts

PORT ANGELES — Olympic Medical Center is preparing to sue the federal government over its cuts to Medicare reimbursements for off-site clinics.

The hospital’s board of commissioners unanimously decided Wednesday to join the American Hospital Association’s lawsuit against the federal Department of Health and Human Services over the Centers for Medicare and Medicaid Services’ (CMS) cuts last week.

The lawsuit could be filed in U.S. District Court in Washington, D.C., as early as Friday. OMC will be one of four hospitals across the nation named as plaintiffs.

On Friday, CMS announced that it would move forward with the 60-percent cuts, despite the more than 1,700 letters and comments from Clallam County residents arguing against.

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.

OMC, which has a large Sequim campus and off-site clinics in Port Angeles, is the second most affected hospital in the state and the 53rd most affected hospital in the country, officials have said.

Jennifer Burkhardt, chief human resources officer, urged the commissioners to join the lawsuit.

She said the American Hospital Association asked OMC to be named as one of four plaintiffs on the lawsuit.

She said there is a chance that a federal judge could file an injunction against CMS, delaying the cuts until the lawsuit is settled.

The lawsuit would allege that CMS acted outside of the scope of its authority when it effectively overturned a law passed by Congress that grandfathered in the off-site clinics, she said.

“Secondly, to add insult to injury, CMS has not acted in a budget neutral fashion,” she said.

She said the American Hospital Association will cover the costs of litigation, but that OMC officials likely would be required to provide declarations, testimony and evidence that support the case.

No jobs lost

CEO Eric Lewis told the commissioners that while the hospital will need to make significant cuts in the coming years, the last thing to be cut will be the staff.

“Employees remain our most important asset,” Lewis said. “We want to prioritize our employees.”

However, Lewis said OMC will slow down in hiring new employees.

Lewis said the goal will be to maintain all current services OMC provides, but it will need to slow down on its goals, including the expansion of the Sequim campus and cancer center.

“We have decided we really want to maintain all current services in Port Angeles and our Sequim campus,” he said. “Our patients still need us, just as much as before CMS decided to cut us.”

He said OMC will continue to work with the Jamestown S’Klallam Tribe and with North Olympic Healthcare Network to ensure services are still provided in the area.

Lewis, as required by law, presented the 2019 budget. He said staff finished the budget Friday just before CMS announced its plans to cut funding.

The final budget, which he said should be done in two weeks, should reflect the cuts the hospital will have to make.

He said OMC was planning to do a $15 million expansion of its Sequim campus next year, but that will need to be spread out over several years.

Lewis emphasized that he believes the board is committed to the cancer center and he will propose continuing the long-planned cancer center expansion.

Other projects, such as an ambulatory surgery center, will be considered in the future. He said OMC will need to slow the rate of equipment purchases.

Lewis said the hospital plans to work with federal lawmakers to find a solution. He said there were bipartisan efforts in both the House of Representatives and the Senate urging CMS not to make the cuts.

U.S. Rep Derek Kilmer said on Facebook the cuts are “outrageous,” and that he is “going to pursue all of the options available to prevent these cuts from happening.”

“We will be providing information to the public in the next steps on advocacy,” Lewis said.

Commissioner John Nutter said he appreciated Lewis’ leadership on the issue.

“The fact the American Hospital Association came to us and asked us to be a part of the lawsuit is a direct result of Eric’s leadership,” he said. “That speaks volumes to the quality of a leader we have.”


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