An announcement from Health Management Associates (HMA), owners of Lehigh Regional Medical Center, have informed their 380 employees of the hospital that they will see their benefits cut due to what corporate officials say is in response to cuts in Medicare payments.
Diann Cimrig, LRMC's marketing director, said administration officials told employees on Friday, May 31 and that all employees at the Lehigh hospital are affected.
Locally in Lee and Collier counties, the cuts will affect some 1400 employees at HMA hospitals, where HMA owns two Physicians Hospitals in Collier County and one in Lehigh. The announcement of benefit reductions will affect some 42,000 employees in response to the Medicare cuts in payments to the hospitals HMA owns.
Lehigh Regional Medical Center.
Joanie Jeanette, president and CEO of Lehigh Regional Medical Center, was out of town and Cimrig spoke on behalf of the hospital and Joanette.
"Associates' (employees') response at LRMC was supportive of the decision, since temporary cuts in benefits for all is a far better option than having to reduce staff.
"The lack of a decision by Florida lawmakers regarding Medicaid expansion will be detrimental to our hospital and many other local healthcare providers," Cimrig said.
"Last year Lehigh Regional provided more than $40 million of uncompensated care. Without the Medicaid expansion to assist in the reduction of patients to whom we provide uncompensated care, that number could potentially increase this year,"
The action includes a freeze on vacation accruals until sometime in October, a reduction in HMA's 401(k) retirement benefit matches from 1.5 percent to 1 percent and pushing back all merit raises until Jan. 1 of 2014.
In the announcement made last week, HMA largely blamed the benefits plan on the federal budget cuts which were triggered under the "sequestration" impasse going on in Congress.
In a statement by Scott Campbell, CEO of HMA's Physicians Regional Healthcare System, he said they were deeply disappointed "when our nation's elected officials failed to achieve a balanced budget resulting in sequestration. In the prepared statement, he said that as a result, "hospitals throughout the country, including ours, are seeing reduced payment for services while the cost of care continues to increase."
There have also been complaints about the reductions in Medicare reimbursements to hospitals under Obamacare or its correct name, the 2010 Affordable Care Act.
When cuts were made in this program, it was done to aid in financing an expansion of Medicaid, which had been aimed at reduction of the number of non-paying, uninsured patients who are given hospital treatment.
It has been reported over and over again that Florida and a dozen other states have rejected that Medicaid expansion and the federal dollars that would have likely funded it over the next 10 years. Republicans in the state legislature have led the fight to not accept the federal help.
The owners of LRMC, Health Management Associates, operate 71 hospitals in 15 states as well as the three, one in Lehigh and the other two in Collier County.
No word was given by HMA as to how much it wants to save due to the benefits announcement.
According to Taylor Hamilton, HMA has not said how much it hopes to save due to the Friday announcement.
"We're trying not to have to eliminate positions, Hamilton said. She said that as of the day of the announcement and until Oct. 1, employees who have accrued vacation time have been put on hold.
But vacations that already have been earned will not be affected and employees with planned vacations based on the expectation of vacation time accrued, will still be allowed what she called "a negative balance" of up to 24 hours.
According to reports, the 401(k) cut rescinds a 0.5 percentage point hike that HMA had instituted this year. The corporate headquarters managers are not saying when, or if, that will be reversed and as for raises, merit increases which would have taken place in September are now on hold until the beginning of 2014.