District-based Providence Hospital has laid off nearly 40 workers as part of a much wider cost-reduction effort, CEO Amy Freeman confirmed Tuesday, adding another hospital to the recent trend of health care job cuts in the Washington region.
Providence is one of many health care providers struggling after Medicaid contractor D.C. Chartered Health Plan Inc. collapsed in April, leaving doctors and hospitals with upward of $60 million in unpaid bills.
Under control of a government-appointed receiver, Chartered stopped paying claims shortly before it went out of business on April 30 when the receiver realized there would be insufficient funds to pay all bills. While various health reforms are squeezing hospitals on multiple fronts, the Chartered matter is a crisis, Freeman said.
"The real story in the District right now is Chartered, if you want to know the truth," Freeman said. "And it's serious. To not be paid since April for the work we provided is a huge issue, and between all the players, we just have to get this resolved."
According to interim government figures, Providence is owed about $2.5 million. But Freeman said the final count for her system is nearly double that.
"For a place like Providence, on our books we've got a $4.5 million receivable. That has a huge impact on us," she said. "And that's part of the reason we made these changes."
In the past month, Falls Church-based Inova Health System, University of Maryland Medical Center in Baltimore and Howard University Hospital have all confirmed layoffs. The health care industry is facing pressure from Medicare rate cuts, performance-based penalties, new risk-based insurance contracting and mandates to upgrade technology.
Providence's fiscal year ends June 30, and hospital accountants are wrestling with the high uncertainty about the timeline for getting those bills paid, Freeman said. Efforts continue in city circles to close Chartered's books and solve the dilemma.
The nonprofit, 408-bed hospital is owned by St. Louis-based Ascension Health.
© 2013 American City Business Journals, Inc.