The head of Niagara County’s Social Services Department on Tuesday publicly questioned the connection between the handling of Medicaid applications and the ongoing financial problems at Niagara Falls Memorial Medical Center.

Addressing members of the Niagara County Legislature, Social Services Commissioner Anthony Restaino said the numbers do not support repeated claims made by hospital officials about the impact of county-run Medicaid processing on the health care facility’s bottom line.

Restaino characterized the hospital’s assertion as a “categorical misrepresentation” of the truth, saying the county’s Medicaid system is not directly responsible for the facility’s financial losses and recent job cuts.

“I am not sure what the closing of the behavioral unit has to do with Medicaid,” said Restaino, referring the hospital’s board’s recent cost-cutting move, closure of the Bridges Adolescent and Child Behavioral Services Unit.

According to Restaino, the county has received 450 Medicaid applications from the Niagara Falls hospital during the past two years. Of those, Restaino said, 113 were denied.

Restaino indicated that the hospital’s level of Medicaid reimbursement has been relatively stable during the past three years, saying numbers he received from the state show the hospital received $9.9 million from Medicaid in 2005, $9.1 million in 2006 and $9.6 million last year.

“It is confusing as to how these numbers add up to a multi-million dollar loss,” Restaino said.

Restaino’s comments followed another plea for assistance from the county from Memorial’s President and CEO Joseph Ruffolo, who attended Tuesday’s meeting in support of a series of resolutions aimed at helping the health care facility overcome financial concerns that led to 81 layoffs last week.

Ruffolo told lawmakers the hospital was saddled with $7 million in uncompensated care last year and suffered $2.3 million in losses related to services for children and adults with mental illness. The behavioral health losses included $1.8 million in bad debt the hospital was forced to write off, according to Ruffolo.

“We are the Erie County Medical Center of Niagara County, only without the subsidy,” he said.

Ruffolo refuted Restaino’s statistics, saying state officials agree with the hospital that Medicaid is a genuine concern.

“If there were no issues,” he said, “then I would assume the New York State Department of Social Services would have no recommendations.”

A parent from Niagara Falls took issue with the hospital’s decision to close the Memorial Child Care Center, saying he, too, wondered how operating a day care center had anything to do with losses related to Medicaid patients.

Hospital management announced plans to close the facility, along with a dental clinic as part of a restructuring plan announced last week.

“Why is the child care center being singled out as a cause and solution to the hospital’s financial problems?” said David Glahe, a Niagara Falls school teacher whose 2-year-old daughter attended the center.

Ruffolo said, unfortunately, the child care center and dental clinic had to go because they were not making money and were having a negative impact on the hospital’s overall bottom line.

“We have a number of areas that have been a significant drain on the organization,” Ruffolo said.

Lawmakers approved several components of an aid package proposed by legislators from Niagara Falls. A measure requesting a $3.5 million loan from the county to the hospital was pulled from consideration. Ruffolo said the hospital did not need the county’s money and would prefer more help in processing Medicaid patients.

Legislators did unanimously support a resolution calling on the state Department of Health to provide Memorial with $5 million to cover losses related to the hospital’s mental health units. In addition, the Legislature agreed to:

• Ask the state to consider an increase in the hospital’s $350-per-day reimbursement rate for Medicaid services.

• Call on the state for a thorough review of Medicaid application processing.

• Request that a greater portion of revenue from Seneca Niagara Casino be distributed to the City of Niagara Falls for economic development projects and to assist the hospital in stabilizing its cash flow.

• Ask the state attorney general for an advisory opinion on whether the hospital qualifies for low-cost power traditionally provided by the state to for-profit industries.

A proposal to establish an ad hoc committee that would look at ways to streamline the Medicaid process in Niagara County was referred to the Community Services Committee. Members of the committee are expected to discuss the proposal following a presentation from Ruffolo during a meeting scheduled for Monday.

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