OCH CEO blames layoffs on federal government

Amid the closure of its inpatient center and the pending closure of emergency services and outpatient surgery facilities on July 29, Ozarks Community Hospital announced July 18 it would lay off 200 employees.

During a July 21 media Q&A session held at the hospital’s North National Avenue business park, CEO Paul Taylor said the losses would reduce OCH’s local employees to around 300 and its systemwide count between 650 and 700.

Hospital officials said OCH would seek to retain some of those employees by moving them into positions at its 17 clinics, which will remain open. Taylor added 20 companies would take part in a job fair scheduled for July 22 at the hospital and was optimistic staff – including some 60 registered nurses from OCH’s outpatient surgery department – would be hired.

“There’s a nursing shortage in this area – I’ll be shocked if every one of my nurses doesn’t have a job by the end of the day,” Taylor said. “Now, that’s going to be less true for maybe some of the non-nursing folks, and hopefully they’ll find jobs.”

In a memo to employees, Taylor blamed the Centers for Medicare & Medicaid Services for terminating its Medicare agreement, leading to the closures and layoffs. The termination will go into effect Aug. 1. Taylor said CMS made no allegations of substandard care at the hospital. Rather, it took umbrage with low inpatient volumes, the result of the hospital choosing to provide primary care to at-risk patients.

Inpatient visits as of July 6 last year totaled 10, compared to outpatient visits of 43,667, according to Springfield Business Journal list research. Net patient revenue in 2014 for the health system was $55.2 million, roughly flat from 2013, according to list data.

According to the Social Security Act, a hospital must be primarily engaged in providing services to inpatients, maintain clinical records on all patients and have bylaws in place for staff and physicians, among other rules.

“CMS is picking on us because we decided, as a hospital, that we could provide primary care for at-risk patients,” he wrote, noting he would appeal the decision. “Everyone in health care understands that primary care for at-risk patients is the largest unmet need we have in this nation. We did the right thing and nothing CMS says is going to change that fact.”

In a letter dated July 15 and released to the media July 20, Sen. Claire McCaskill, D-Mo., urged CMS to allow operations to continue, pending a final decision on the hospital’s appeal.

“I am writing to ask that as the appeal is being considered, CMS delay the termination of Medicare payments and allow OCH to maintain its current Medicare provider agreements status until a final determination is reached,” McCaskill wrote. “This will allow the community of Springfield to continue to receive the care it needs while CMS reviews OCH’s case.”

During the Q&A session, Taylor said while he was optimistic the CMS decision would be reversed, he was unsure whether hospital services closed as a result would again be made available.

“I believe we’re going to win on appeal,” Taylor said. “We’re so desperately poor it’s hard enough to keep the hospital open. I don’t really know if we’re going to have the resources to reopen it.”

In the meantime, Taylor said the health care system isn’t closing its doors. The Springfield hospital now serves as an outpatient clinic for OCH’s Gravette, Ark.-based critical access hospital. He said OCH had 250,000 primary care encounters in 2015 and he estimates that number will reach 300,000 in two years.

“We’re going to keep doing it all, until somebody comes up with another rule that we can’t somehow satisfy – but we’re going to stay open and we’re going to keep providing good care,” Taylor said.

He added OCH would continue to grow its clinical programs, despite a 40 percent decline in Medicare revenue caused by the hospital closure, which can no longer provide overhead support to other departments. Its Medicaid medical home program has roughly 2,000 patients.

“We’re the biggest in the state – they haven’t seen anything yet,” Taylor said. “We’re going to have 5,000 or 6,000 people in the program in a few years. We’ll just keep growing the clinics.”

According to a Facebook post by the hospital, OCH’s clinics in Springfield, Nixa, Sparta, Rogersville, Marshfield, Mount Vernon and Bolivar, as well as those in Carthage, Noel and Gravette, Ark., remain open and facilities are accepting insurance including Medicare and Medicaid.

Web Producer Geoff Pickle contributed.