Low Reimbursements Hurting Hospitals in North Dakota, New Jersey

North Dakota hospitals "are facing a tough battle against rising costs" and shrinking reimbursement rates from Medicare, Medicaid and private insurers, the Associated Press reports. To cope with this problem, several hospitals have been forced to cut programs or reduce staff. North Dakota hospitals, like those in other states, were hurt by cuts incurred when Congress passed the Balanced Budget Act in 1997. Those cuts exacerbated the hospitals' financial problems, as reimbursement rates in North Dakota are lower "for the same procedures than [the rates for] hospitals in other states." Sen. Kent Conrad (D-N.D.) said that treating a patient for pneumonia in North Dakota would bring a hospital $4,200, while New York City hospitals would be reimbursed $8,500 for that same procedure. According to Gary Miller, CEO of Bismarck's St. Alexius Medical Center, the reimbursement rates are based on what hospitals were charging in 1984. "From my standpoint, from day one, some of that data that was used was not well founded. We came out of the chute at a disadvantage." As a result, Bismarck's Medcenter One Hospital is cutting its community service program, and Mercy Medical Center in Williston has been forced to close a satellite clinic. Doug Black, development director at Mercy, said, "A lot of people are going to be shocked to realize that hospitals are struggling. I think it's getting to be a crisis mode across the country" (Associated Press, 12/3).