Sentara RMH restructuring doctor compensation, closes two rural clinics

Responding to an anticipated decline in revenue, Sentara RMH is moving to reduce the amount it pays some doctors there.

By Jeremiah Knupp, senior contributor

Doctors at Harrisonburg’s hospital could be facing pay cuts in 2020 as a result of Sentara Healthcare restructuring its compensation program for physicians at its hospitals. Doctors at the hospital are paid according to rates set in contracts between Sentara and provider groups.

A representative for Sentara confirmed in a statement to The Citizen that the company is restructuring the reimbursements through what it calls a “simplified and flexible Provider Compensation Plan.” 

“With reimbursement increasingly being based on population management, risk sharing and cost effective care, and the expectation that considerably less revenue will be realized in the near and long-term future,” the statement continued, “it is necessary to evolve our provider compensation models so that we can continue to provide and sustain quality healthcare in the communities we serve.”

The statement said Sentara values its providers  and is “thankful for their commitment and dedication to our patients.” 

The reimbursement rate cuts in the new contracts could exceed 25 percent in some cases, according to sources familiar with the negotiations but who were not authorized to speak about them. 

This comes as other news outlets have reported that both Sentara and its subsidiary insurance provider, Optima Health, have seen record earnings in recent years. Sentara has also recently announced plans to increase its minimum wage to $15 per hour by January 2022.

But Jennifer Downs, Sentara’s director of marketing and communications for the Blue Ridge region, said the organization expects future revenues to fall due to declining commercial insurance reimbursement and more patients covered by Medicare.

“Our goal is to position Sentara to withstand external forces by focusing on our core services and mission requirements and by being good financial stewards,” Downs wrote in an email.

Messages seeking comment from multiple doctors and provider groups at RMH about potential pay cuts were not returned.

Two rural clinics closed in late December

Friday, Dec. 27 marked the final day of operation for two Sentara health centers. Mirroring a wider trend toward reduced medical services in rural areas across the state, Sentara has permanently closed clinics in Luray and New Market.

“While we regret to have to make this decision, challenges in recruiting physicians to these areas, as well as various economic issues, have limited our ability to effectively meet the healthcare needs of the communities,” Downs wrote. “As a not-for-profit organization, it is critical that we are good stewards of our resources so we can continue to fulfill our mission.”

The clinic staff and a physician who saw patients there would be transferred to other Sentara locations. The Norfolk-based healthcare company, which bought Rockingham Memorial Hospital in 2010, still operates clinics in Mount Jackson, Timberville, Broadway, Elkton and Bridgewater. Although Downs did not say how many patients were served in New Market and Luray, she said the number of visits at both locations had been declining over the years. Patients with appointments scheduled after the Luray and New Market clinics had the option of rescheduling them at other Sentara locations.

The Page Valley area is also served by the Page Memorial Hospital in Luray, which is run by Valley Health, based in Winchester. Valley Health also runs Shenandoah Memorial Hospital in Woodstock and operates a clinic in New Market.

“Recruitment and retention of physicians in rural communities is a very difficult issue,” said Beth O’ Connor, executive director of the Virginia Rural Health Association, a non-profit organization that works on rural healthcare issues in the state. “To recruit a new person who may not be familiar with Virginia or may not be familiar with rural practice, it is a tough way to go. It’s a concern nationwide. There are still other options for health care clinics [in these areas], but absolutely, any time you close an access point the long-term outcomes are going to become worse, not better.”

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