Hospital threatens to axe Tricare

Members of the military and their dependents may some day find their health insurance is not accepted at Whidbey General Hospital.

A strongly-worded letter from the Whidbey General Hospital administration to Tricare will place the proverbial ball in the military health care provider’s court.

Reimbursements well below hospital costs from Tricare, the Department of Defense’s health care program for members of the uniformed services, their families and survivors, has backed the hospital into a financial corner.

Meetings with Tricare representatives have thus far bore no fruit, prompting the drafting and subsequent mailing of the letter, which was approved by the hospital board Monday night.

“They recognize the problem,” said Scott Rhine, hospital chief executive officer, at the meeting. “The question remains what means they have to address it.”

Whidbey General became a “critical access hospital” at the end of 2005 in order to increase government-sponsored reimbursements. The designation was designed specifically to provide cost-based reimbursement for Medicare patients in smaller, rural hospitals.

The other major government payer on Whidbey is Tricare. If the military provider’s reimbursement methodology is not changed to reflect the hospital’s status, the contract will be terminated.

“Because of the large number of Tricare patients seen, relative to our small patient base, Tricare must increase reimbursement if the hospital is to continue to provide services to the military and dependent populations,” the letter reads. “Please believe we want to be supportive of our military forces and their families. We appreciate their service to our country and to our community. At the same time, we cannot afford to jeopardize health care services to other residents of Whidbey Island.”

Doug Bishop, Whidbey General’s chief financial officer, said Tricare reimburses the hospital only 39 cents for every dollar, compared to Medicaid’s 56 cents. And to exacerbate the problem, 7 percent of the hospital’s business is accounted for by military patients using Tricare.

“That’s a sizable chunk to be hit with,” Bishop said.

The letter was crafted to convey the gravity of the situation without formally canceling the contract, Rhine told the board.

“We need to let them know that it is a concern to the hospital and to our long-term viability,” he said.

Chief of Staff Dr. Chris Bibby said the changes to allow higher reimbursements will ultimately have to be made by Congress, a task he likened to moving a buffalo by pulling its tail.

The hospital administration will wait for a response to the letter before taking any direct action. Rhine said 60 days is generally the amount of time alloted for a reply.

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