Math errors at 19-bed Nantucket (Mass.) Cottage Hospital, owned by Boston-based Partners HealthCare, may cause hospitals across the state to see steep declines in their Medicare payments, according to the Boston Globe.
Under hospital payment rules, Medicare is required to reimburse employee wages at urban hospitals at the baseline set at rural hospitals in the state. Nantucket Cottage Hospital typically sets the floor for wages at hospitals across Massachusetts because it is the only rural hospital in the state. However, that isn't the case this year.
Consultants hired by Partners made several errors in the data Nantucket Cottage Hospital submitted to Medicare. They reduced the hourly rate by overestimating hours and failed to include enough overtime pay and high-paid physician hours. The mistakes could result in a "steep and extraordinarily serious" decline in Medicare payments to Massachusetts hospitals in the fiscal year that begins in October, according to an email from the Massachusetts Hospital Association obtained by the Globe.
Hospitals would lose a total of about $160 million next year due to the math errors and separate findings made by Medicare auditors about Partners' Nantucket submission, according to the report. Partners' reimbursement would drop by $18 million, while Springfield, Mass.-based Baystate Medical Center and Burlington, Mass.-based Lahey Health System would lose more than $25 million and $20 million, respectively.
That payment reduction could force up to 2,100 layoffs combined at hospitals across the state, according to analysis from the Massachusetts Council of Community Hospitals. The vast majority of those job cuts — 1,800 — would likely occur in community hospitals.
Partners submitted the incorrect data to Medicare in September. System spokesman Rich Copp told the Globe that the Partners identified the errors in mid- to late March and sent corrected numbers April 5, almost two months after the deadline for submitting corrections.
Hospitals have enlisted Rep. Michael Capuano (D-Mass.) and other congressional delegates to help in their appeal to avoid the payment reduction. Rep. Capuano told the Globe that Medicare has allowed other states to amend data after the correction deadline, and he believes it should give Massachusetts the same opportunity.
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