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Budget proposal by lawmakers would annually cost local hospital more than $5 million

"I've been in this business a long time and I have not seen this type of approach. There is nothing comparable," Sunnyside Community Hospital CEO Jon Smiley says of a legislative proposal that would slash Medicaid payments to rural hospitals.

The impact to Sunnyside Community Hospital would be a loss of nearly $5.3 million each year.

Known as House Bill 2130, the legislation proposed by Rep. Ross Hunter (D-Bellevue) and Eileen Cody (D-Seattle) would reduce the state's Medicaid payments to 38 critical access hospitals in underserved areas.

Payments to critical access hospitals under Washington's medical assistance programs are based on allowable costs. Larger urban private hospitals, such as those in Seattle and Bellevue, are reimbursed under a system that pays fewer costs.

The bill proposed by Hunter and Cody would reimburse rural hospitals at the lower rate received by larger hospitals.

Smiley says it's too soon to tell what that loss would mean to the hospital and its staff.

"It's concerning because we have such a large Medicaid base, but until I find out (whether the cuts will be approved) it's kind of hard to write a budget," he said.

Smiley said he is now working on the hospital's 2012 budget and will present it to the hospital board next week.

"We'll put something together, then we might have to modify it during the year," he said. If the cuts pass as presented, Smiley said it would represent about 10 percent of the hospital's gross revenue.

The hospital and its clinics serve 400 to 500 patients a day, Smiley says. He pledged that service will continue if the cuts are enacted.

"It would be devastating," he said of the cuts. "But the hospital would still be here."

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