Predictions and Observations

Predictions:

1.  The District will never realize the contribution identified in the presentation.  I cannot say if theis SNF proposal will lose money, but I am 95% sure it is overly optimistic.  The tell is the “sensitivity analysis’ that showed a $39k contribution assuming that the District was reimbursed at free-standing SNF rates.  Mr. Zimmerman is no dummy; he is a skilled businessman.  If it was that easy to make money then he would not be giving up this lucrative business.  That 39k contribution is after the Zimmerman’s are paid their lease and is with lower reimbursement rates than they receive now (since their private pay rates are higher than the Medi-Cal freestanding rate).  Also, the 39k is with higher expenses than the Zimmerman’s currently have.  The District can argue that they are better able to maximize Medicare reimbursement, but, if it was so easy and lucrative then Mr. Zimmerman could hire very expensive expertise to recruit Medicare patients (there is no “distinct part” Medicare) and come out way ahead.  Ergo, the numbers are inflated – 95% certain.

2.  The South Shore Medicare reimbursement rate average is less than $619 per day.  I make that prediction with an estimated 50% chance of being right.  When someone asks for a single number and, instead, the answer given is something slippery like “72% of the South Shore patients are reimbursed at or above $619” then you either do not have a clear understanding of how to answer a question clearly or you are trying to obfuscate the answer.   $619 is not the right number for South Shore – only 50% chance.

3.  AB97 reductions with respect to distinct part will be approved.  This is 99% sure thing.  The standard CMS must use is whether the Medi-Cal rate will cause unequal access for Medi-Cal patients vs. private pay.  Since the distinct part rates exceed private pay rates, CMS would not have a leg to stand on in denying this part of the state plan amendment.  There are other parts of AB97 that certainly may cause CMS to deny portions of the SPA, but this part will be approved.  AB97 is not a all or none thing so even if parts are denied, this part can still take effect.  In fact, that is how the bill was written to allow any parts that were approved to go forward even if CMS denied other parts.  All of Stebbins’s talk about her hope that AB97 changes will be rejected by CMS ignores this part of the equation.  AB97 reductions in distinct part are eventually upheld – 99% chance.

Observations:

1.  There is a certain amount of hubris/risk in relatively tiny Alameda operating the 2nd largest distinct part SNF in the State (that is what my preliminary research shows – please correct me if I’m wrong).    Somebody might see that as inappropriate use of this program and move to amend it to exclude this kind of blatant opportunism. 

2.  I’m sure that Jordan Battani’s interest in expanding SNF options is sincere, but since this proposal adds zero beds to those already available in Alameda, I’m at a loss as to how she thinks this helps.  In fact, by removing private pay beds from circulation, it actually goes against her and Director McCormick’s stated preferences.  I mean, look at the assumptions, most of the private pay patients who are stably housed at Waters Edge will be forced by economic pressure to move – the exact opposite of Battani’s and McCormick’s stated desire. 

3.  The District was ready with a press release trumpeting the vote the Board took, but has no concrete plans for the public forums.

4.  Certain Hospital building might meet 2030 SPC requirements (but not 2002 NPC requirements? hmm) but not without expensive work to shore up or tear down other structures so, in fact, in the broader context, that is not really an accurate statement.  A March 24, 2006 letter from Roy Lobo assigns a SPC-1 rating to the West Wing so I am unclear why Management thinks it is close to SPC-3 unless soil testing submitted this year has changed something (and what about NPC-4?).  Also, the letter dated January 13, 2005 states that the South Wing is declared SPC-3, but that testing needs to be done to confirm that.  I don’t know if the “steel moment resisting frame joints’ have been tested subsequent to that letter. [Both these letters were in the 1/10/11 Board packet..]

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About egorelick

Gadfly. Former City of Alameda Healthcare District Board member.
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