Formula change for baby, mother care concerns hospital

PUNXSUTAWNEY — Serving as the only provider of obstetrical care in the county, Punxsutawney Area Hospital officials are concerned about a decision by the state Department of Public Welfare (DPW) that could threaten the service.

DPW recently changed its formula for reimbursing hospitals for the care of mothers and their babies.

Until May 1, the state paid an average of $5,712 for the mother’s care and $1,155 for the baby’s care for families on medical assistance.

However, the department ended the baby payment for the 60,000-plus normal, medical assistance births as of May 1, leaving hospitals to absorb the expense.

“It is still providing care for mother and baby in a normal delivery,” DPW spokesperson Donna Morgan said. “Instead of billing both and separating those charges, we’ve just combined the charges. We did this after reviewing numerous commercial and private insurers and other Medicaid programs around the country. So we’re restructuring the payment policy similar to other states, to bring us more in line with that.”

Punxsutawney Area Hospital averages around 110 births a year.

Chief Financial Officer Jack Sisk said around 60 percent of those deliveries — 66 deliveries — are covered by medical assistance.

But the reimbursement the hospital receives from the state is lower than the average —$3,400 for mother’s care, and $800 for baby’s care.

And since the baby payment has been eliminated, Sisk estimates the hospital would lose $50,000 if the funding is not restored by the time the state budget is passed.

“This makes it more challenging for small community hospitals to deliver care for mothers and babies because it’s a service line we aren’t making money from in the first place,” Corporate Services Director for Punxsutawney Area Hospital Laurie Klingensmith said. “And now the funding for it that has traditionally been received is being cut even further.”

Sisk said the hospital does not make any money in the OB/GYN service line, and despite the potential financial hit, the hospital is committed to providing the service.

“We believe that this is just a basic service that needs to be provided in every town,” Sisk said. “As a charity, a not-for-profit charitable organization, it’s part of our mission. We want to continue to provide OB/GYN services here in town, and we’re willing to invest the hospital resources to continue to do that, but at some point in time, if you nickel me here and dime me there, it’s tough to continue to meet every service line’s mission continually into the future. There are no guarantees.”

Since 1997, 44 obstetrical units have closed across the state, including Brookville Hospital’s unit.

Statewide, 50 percent of births are paid for by medical assistance.

The funding cut is not only a concern for rural Pennsylvania hospitals, but for the Hospital and Healthsystem Association of Pennsylvania as well, said Roger Baumgarten, director of Media Relations for the association.

However, Senate Bill 1466, the state budget bill, includes the $5.62 million needed to restore the funding that was eliminated.

“We are also working with legislative leaders on language that would assure that the Department of Public Welfare use these funds to restore the normal newborn payments,” Baumgarten said.

But as the Senate budget bill has not yet been passed, Punxsutawney Area Hospital officials have been in touch with state Sen. Joe Scarnati and state Rep. Sam Smith in an effort to show their concern about the policy change.

“The Board of Directors, administration and Expecting You staff at Punxsutawney Area Hospital have supported continuation of maternity and newborn services to our community through this time,” Paula Spack, vice-president of patient care services, said.

“It is our desire that the legislature reverse this ruling so our ability to provide these services in the future is not further compromised,” she said. “The health, safety and well being of mothers and babies in our community is a priority for us.”

DuBois Regional Medical Center did not reply to interview requests.