The Commonwealth Healthcare Corp.'s proposed emergency regulation that would adjust the fees at the public hospital was described by a local health insurance company as significantly higher than what is being charged in Guam hospitals and other medical facilities in several U.S. states.
NetCare Life & Insurance plan administrator Jerry Crisostomo indicated this to corporation CEO Juan N. Babauta in a recent letter, which also served as the company's comment on the proposed emergency regulation.
It was last August when the corporation approved the emergency regulation which intends to enforce up to over a 300-percent increase in major hospital fees and services. The regulation is now seeking comments from the public and would take effect 120 days after publication in the Commonwealth Register.
“The announced emergency rates surpass those currently charged at facilities such as the Guam Memorial Hospital, Good Samaritan Hospital in Los Angeles, and many other hospitals in our provider networks. For example, the old CHC rate for a semi-private room per day was $303.75 and has now been increased to $1,090 per day compared to a GMH room and board rate at $519.56 per day. This represents a 359-percent increase,” stated Crisostomo.
The announcement, he added, did not also allow for public comments and it is a surprise to many in the business community especially to insurance firms as the third party payers. The new fees, if implemented, will not affect government programs such as Medicare or Medicaid and will only impact the population insured through private payers.
Crisostomo said the high rates will lead to higher health insurance premiums, resulting in higher uninsured individuals. The business community, he said, cannot afford additional increases especially since another wage increase must be implemented. It was on Sept. 25 when another 50-cent increase in minimum wage was enforced in the Commonwealth.
Crisostomo was among the health insurance officials who met with Babauta last month. For the plan administrator, the rate increases may necessitate health plans to change CHC from an in-network provider to an out-of-network provider resulting in higher cost share by members.
“In turn, this may cause members to seek off-island care rather than at CHC resulting in CHC losing, rather than gaining, revenues from commercial payors,” he said, adding that while they recognize the precarious financial situation facing CHC, there are other solutions that will yield additional revenues to CHC but lessen the crippling effect that the new rates have to an already distressed business community.
Crisostomo had recommended two options that he believes would effectuate a more reasonable revenue enhancement program for CHC.
The plan administrator asked that the corporation immediately replace the announce fee increase with a 20-percent across-the-board hike and plan for minimal adjustments in future years based on true hospital rate-setting calculations.
If this is found not feasible, “We ask that CHC either provides a 50 percent relief as a discount from the newly enacted fees or apply the new room rates on a per-diem basis which means that no other ancillary charges will apply other than the daily room rates.”