MASSENA — The U.S. Department of Health and Human Services has denied Massena Memorial Hospital a change in status that could have resulted in $3.5 million in annual savings.
Hospital officials announced Monday that they had been informed that their application for Critical Access Hospital status was denied.
They said the $3.5 million in annual savings was “an essential component” of the hospital’s turnaround plan. The hospital had a net loss of $408,997 in November, bringing its year-to-date net losses to $8.3 million. The hospital finished 2018 with a net loss of $5.6 million.
“We are deeply disappointed by this decision, strongly disagree with it and will appeal through any and all possible avenues,” hospital officials said in a statement. “This decision does not change our commitment to this community and, despite the $3.5 million annual financial hit, we will continue to move forward providing the people of Massena with access to quality health care for years to come.”
The Board of Managers had unanimously agreed on April 8 to move forward with filing a certificate of need to become a Critical Access Hospital.
Critical access is a designation given to eligible rural hospitals by the Centers for Medicare and Medicaid Services. It was created in response to a string of rural hospital closures during the 1980s and early 1990s. The designation is designed to reduce the financial vulnerability of rural hospitals and improve access to health care by keeping essential services in rural communities.
Eligible hospitals must have 25 or fewer acute care inpatient beds; be more than 35 miles from another hospital, although exceptions may apply; maintain an annual average length of stay of 96 hours or less for acute care patients; and provide 24/7 emergency care.
The denial comes as the hospital is preparing to officially become a new corporation called Massena Hospital, under the ownership of St. Lawrence Health System. That is scheduled to take place Jan. 1. Voters had approved the sale to St. Lawrence Health System, 1,963 to 174 in November.
Massena Memorial Hospital is still slated to receive a $20 million grant from the state Department of Health. The hospital’s Board of Managers and Massena Town Council had voted on July 30 to accept the $20 million grant and authorize an asset transfer agreement between Massena Memorial Hospital and St. Lawrence Health System.
The funding is from New York state’s Health Care Facility Transformation Program and will be disbursed after Massena Memorial Hospital has become part of St. Lawrence Health System. Chief Executive Officer David Bender said last week that the grant funding was still working its way through state approvals.
“We have every hope that we will be receiving the money toward the end of the year,” he said.
St. Lawrence Health System, which took over day-to-day management of Massena Memorial Hospital in June, has also agreed to provide $8 million toward the hospital’s operation.