Board OKs Hike in County Hospital Charges

By City News Service:

The Board of Supervisors this week authorized Riverside County Regional Medical Center CEO Zareh Sarrafian to hike rates on a wide range of services and supplies provided by the Moreno Valley hospital.

“We have to make sure the rates we’re charging are within the industry norm and make adjustments accordingly,” Sarrafian said before the board’s vote.

“Some of our rates will be raised because they’re below-market,” Sarrafian said. “Other rates are above-market.”

The hospital director was granted authority to apply an 8 percent increase in charges for procedures and accommodations. He said most of the adjustments will be made to items tied to emergency room treatment and will largely impact patients with private health insurance, not Medi-Cal or Medicare beneficiaries

Last month, county CEO Jay Orr said that adjustments were needed to RCRMC’s rate structure because of how much the hospital’s costs have gone up.

“We buy drugs, medical supplies and contract out to a vast number of doctors, so we need to keep up with the costs of doing business at the hospital,” Orr said.

According to Sarrafian, the last change to the hospital’s master rate schedule occurred in mid-2013, which Supervisor John Benoit said put the hospital unacceptably behind the cost curve.

“We should be reviewing costs annually,” Benoit said. “We don’t want to overcharge, but we do want to make sure we’re competitive.”

Sarrafian assured the board that he would be conducting yearly rate structure reviews going forward.

Huron Consulting Inc., the Chicago-based firm hired to conduct a top-to- bottom review of RCRMC’s operations in order to identify savings and revenue growth opportunities, found that area hospitals, including Loma Linda University Medical Center and Arrowhead Regional Medical Center, had raised rates an average of 10.35 percent annually over the last two years in response to inflationary pressures.

By increasing rates roughly 8 percent now, RCRMC will realize an additional $2.8 million in revenue over the next year, Huron estimated.

The hospital is struggling to overcome a multi-year structural deficit that’s expected to be $30 million by the end of the current fiscal year.

The board’s vote was 4-0. Supervisor John Tavaglione was absent from the meeting.