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MMH provides documents to firm studying privatization

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MASSENA — Massena Memorial Hospital has begun providing documentation to the legal firm that is doing a study to determine if the agency should privatize.

CEO Charles F. Fahd II said the hospital received a request from the law firm of Hancock Estabrook LLP, Syracuse, to provide the documents as part of its information-gathering process.

“So we provided them as much information from the hospital archive as we had,” Mr. Fahd said.

He said the hospital also provided copies of employment contracts and other leasing contracts currently in force.

The firm also requested copies of contracts the hospital has with both of its collective bargaining units, as well as contracts for purchasing, contracts with professionals and contracts for services such as radiology, pathology and anesthesiology, according to the CEO.

“They also requested information about our Foundation and the current status of that, which is a 501(c)(3) not-for-profit corporation,” Mr. Fahd said.

The study will consist of three phases. Phase one, which is underway, includes the study of all contracts to see if anything would prohibit the hospital from changing its status.

Phase two would be the implementation phase. Following approval from the Massena Town Council, the hospital could start filing the paperwork such as the Certificate of Need to begin the conversion.

The third and final phase would be acquiring the tax-exempt status through the Internal Revenue Service.

MMH officials have said that, facing projected financial hurdles in the future, they need to investigate a public-to-private transition.

Mr. Fahd had said that what was a $124,200 contribution to the state’s pension program in 2002 has jumped to $4.4 million in December 2013, with a projected $4.8 million contribution in December 2014.

However, opponents of the plan say pension costs are expected to go down.

Sean Egan, director of member benefits and community relations at the Civil Service Employees Association headquarters in Albany, said recently that the market drop in 2008-09 forced the state to raise pension costs. But now, Mr. Egan said, the pension system is doing well and contributions are expected to drop.

But Mr. Fahd has said the hospital is projecting is a $10.5 million reduction in Medicare reimbursement over the next 10 years because of the federal Affordable Care Act, a $1.9 million reduction in Medicaid reimbursement over the next 10 years because of sequestration and a $2.7 million reduction in Medicaid reimbursement over the next 10 years because of inpatient coding adjustments.

But Gary Storrs, a Washington, D.C.-based labor economist with the American Federation of State, County and Municipal Employees, said recently that the Affordable Care Act might actually benefit health care facilities, including Massena Memorial Hospital.

“From one perspective, it will provide more paying customers in a sense. The pool of uninsured should go down. That should help solve that problem. It seems like a rational kind of shifting,” Mr. Storrs said.

In addition to the Medicaid and Medicare reimbursement losses and increasing pension costs, Mr. Fahd also has noted that the state Department of Health wants north country hospitals to seek formal affiliations, collaborations, mergers or other sharing agreements to reduce duplicated services such as capital equipment acquisitions and overall health care expenses in the region.

But, as a municipal hospital, Massena Memorial is unable to do that because of the taxpayer money involved.

CSEA members have said that, recognizing the hospital’s financial concerns, they have suggested approximately $5 million worth of money-saving alternatives — suggestions that they claim have been ignored. Among them was to switch health insurance, a move that Mr. Egan said would have saved from $850,000 to $1.6 million.

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