Hospital changes status to offset financial deficits


Sunnyside Community Hospital Registered Nurse Betty Santana overlooks patient rooms from her station. Under a new designation, the hospital will operate only 25 acute inpatient beds. The hospital recently received a designation as a critical access hospital, which will allow the facility to recoup some of the financial losses from declining state and federal reimbursements for health care.

To help offset huge operating deficits from caring for Medicaid and Medicare patients, Sunnyside Community Hospital has applied for and received a new status designation.

Sunnyside Community Hospital Chief Executive Officer Jon Smiley made the announcement of the change during Monday's Sunnyside Noon Rotary meeting.

Smiley, who is also a Noon Rotarian, offered assurances that the hospital, which is a non-profit agency, would continue to offer the same services.

On Jan. 19, Sunnyside Community Hospital was designated a critical access hospital by state officials. The designation allows the hospital to recoup some of its losses for treating Medicare and Medicaid patients under a new billing system. The designation also means the hospital will drop from a 38-bed facility to a 25-bed hospital. However, the hospital will be allowed to keep open the remaining 13 beds for mothers and their newborn babies, as well as same-day surgery and observation patients. None of those three patient classifications count towards the 25-bed total, which is reserved for acute care patients. Smiley said he doesn't expect the limit of 25 acute inpatient beds to be a problem because the hospital rarely serves or exceeds that many patients at one time.

Smiley said the change was needed because the patient reimbursement the hospital has been receiving from the state and federal government has been shrinking over the years. The critical access hospital status will allow the hospital to be able to continue effectively offering quality services to area residents.

Smiley told Rotarians that 84 percent of the patients served by the hospital in 2002 were covered by Medicare or Medicaid. The hospital receives 50¢ on the dollar in reimbursement for Medicare patients.

"During the last year, we suffered a loss from treating our patients," said Smiley. "You can't reduce costs fast enough to keep ahead of the losses."

Smiley said Prosser Memorial Hospital has also received the critical access hospital designation. The two are now part of a group of 800 hospitals across the country with the critical access hospital designation, and 30 within Washington state. The hospital designation is administered by the Department of Health through the Office of Community and Rural Health and the Office of Facility and Services Licensing Office of Survey.

To receive the critical access hospital designation a facility has to be located in a rural area. The designation was created in 1997 from the federal balanced budget act, which assures Medicare beneficiaries access to health care in rural areas. However, the balanced budget act was responsible for driving down reimbursement totals for treating patients who receive medical assistance. The state of Washington also made significant cuts in its Medicare reimbursement amounts, which in part drove the hospital to seeking the current designation.

A key to the designation, said Smiley, is that the annual average stay for patients can't be more than 96 hours. The average length of stay for a patient in 2003 was 2.9 days.

Sunnyside is also designated as a necessary provider facility, which helped it gained the current status.

Under the new designation, the hospital will see financial gains. Sunnyside Community Hospital will be able to receive the cost of caring for a Medicare patient, plus 1 percent. The hospital will also receive all costs for covering Medicaid patients. Smiley is expecting the new designation to add $2 million to hospital coffers.

One negative aspect of the program is that it doesn't help support any of the costs associated with recruiting and supporting physicians. Smiley dished out praise for Sunnyside area physicians, whom he said do carry a tremendous caseload of Medicare and Medicaid patients.

Smiley once again reassured Rotarians there would be no changes in the daily operating services of the hospital and that it will be..."business as usual."

. Mike Kantman can be contacted at (509) 837-4500, or email him at


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