Cuts put BMC, health centers in dire straits

A budget shortfall for the Boston Medical Center could cause drastic problems for the hospital and its affiliated health centers, including two in Dorchester, unless solutions, and hard-to-find funding, are found before the Oct. 1 start of the hospital’s fiscal year.

State Senator Jack Hart (D – South Boston) said that he will take legislative action to prevent cuts to BMC and the health centers, going so far as to say he would attempt to mount a veto override if Governor Deval Patrick does not agree to restore the funding.

“If the administration does not fix this, then I will seek a remedy in the Legislature,” Hart said.

Bill Walczak, head of the BMC-affiliated Codman Square Health Center, said that the slashed budget would be “absolutely catastrophic” for BMC and could force the hospital into hundreds of lay-offs and cut services.

The lack of funding leaves Codman Square Health Center with $2.8 million less than expected, said Walczak. He isn’t sure what will happen on Oct. 1, saying that he could eliminate whole departments and still not balance a close-to-$3 million gap in his $18 million total budget. The Dorchester House health center, along with BMC affiliate centers in East and South Boston, are in similar budgetary positions.

“We cannot afford to have a health center in our neighborhood lose 30 percent of its revenue,” said State Representative Martin Walsh (D – Savin Hill.)

When the state’s healthcare reform bill was passed in 2006, a special provision in the legislation granted Boston Medical Center and other institutions considered “safety net hospitals” an enhanced reimbursement rate from the state. Since the safety net hospitals deal with more uninsured and low-income patients, the enhanced funds were seen as a way to prevent financial harm to the hospitals. The law called for the funds to be paid to BMC for a three-year transitional period while more permanent means of financing were put in place.

“There was a recognition that the safety net institutions… had particular needs that weren’t going to be met by the legislation,” said Walczak.

Funding for the safety net health hospitals and health centers became a victim of the state budget deficit and the nation’s contracting economy last year, leaving the health centers with the choice of either drastically cutting services or finding some other means of extracting the needed funds from the cash-strapped Commonwealth.

A replacement for the transitional plan never came about and now the state, faced with a budget deficit in the billions, has made no provision to maintain funding levels to the hospital.

As a result, BMC has lost over $200 million in funding and reimbursements, according to Frank Doyle, executive director of Boston HealthNet, the system of health centers affiliated with BMC. The removal of the state funds, said Doyle, puts BMC in the untenable position of being reimbursed only 64 cents for each dollar of care provided to the hospitals’ core clientele of poor and uninsured patients.

BMC has filed a lawsuit against Dr. JudyAnn Bigby, the state’s secretary of health and human services, claiming that the state is in violation of an agreement to adequately fund the medical center and its affiliates.

In a response to a Boston Globe article on the lawsuit, Bigby said that “the administration is greatly disappointed that BMC, which has received $1.5 billion in state funding in the past year, has chosen this path. At a time when everyone funded and served by state government is being asked to do more with less, BMC has been treated no differently.” Bigby maintains that the administration broke no laws by allowing the transition provision to run out.

Sen. Hart said that prior to healthcare reform in the state, legislators could fight for earmarks to fund the safety net institutions. The reform law took away that option, leaving local lawmakers without recourse if funding is cut.

“I’m concerned about the attitude in the administration about BMC and the health centers,” said Hart, adding that he is “not certain that [the Patrick Administration] understands the value,” of the safety net system.

Walsh is supportive of the lawsuit and legislative attempts to restore the funds, saying that he is for “doing everything we can to make sure money gets put back into the budget,” for BMC. “I don’t know if they want to, but they have to,” he added.