State moves to take over Pershing hospital |

State moves to take over Pershing hospital

The state is moving to take over financial operations of Pershing General Hospital in Lovelock, which is in debt and failing financially.

The issue came to the attention of state taxation officials when the hospital fell behind in its contributions to the Public Employee Retirement System.

According to Steve Boline of the hospital, the hospital lost $176,367 in fiscal year 2008. For just the first three months of this fiscal year, he told the Committee on Local Government Finance, the hospital lost another $72,100.

Hospital administrator Matt Rees said they have made staff and other spending cuts that should total $1.66 million over the course of the year. He said the biggest contributor to the loss is the $453,000 the hospital is paying back to Medicare because of overpayments during the past fiscal year.

He said the hospital should get more than $370,000 back from Medicare at the end of this year, which will help move them back toward the black.

“You’ve reduced expenditures,” said committee chairman Marv Leavitt. “But expenditures are still exceeding revenues and it looks like that’s going to continue to happen,” he said.

Rees said unfortunately, as they began cutting spending, the revenue earned from patients began to drop below projections. He said that was further aggravated by mild fall weather which resulted in far fewer patients suffering from the flu.

He said that has begun to turn around with more patients showing up since Thanksgiving.

And he said the impact of most of those spending cuts ” including layoffs ” hasn’t really been felt yet since they were just made a week ago.

The hospital has been ordered to come up with a corrective action plan and present it to the committee, which oversees finances of local governments statewide, by Jan. 5.

Leavitt, of Las Vegas, said the committee should move to hold hearing on “severe financial emergency” proceedings for the hospital as soon as they have that action plan. That is step one in the Department of Taxation taking over financial management of the hospital. Taxation Director Dino Dicianno said a state takeover, however, provides his department and the hospital’s management with the tools to fix the situation because they can then move to temporarily raise property, sales and other taxes in Pershing County to help raise the necessary revenue.

Committee member John Sherman of Washoe County said he is concerned the hospital find a way somehow to maintain the critical services it provides in the Lovelock area. And that requires revenue, he said.

“If you can’t get it out of Medicare or the patients, one avenue is raise revenues and the only way to get at those revenues is to go through this process,” he said.

Committee member Mary Walker of Carson City said things could get even worse for the hospital if the state decides to cut back Medicaid payments as part of its plan to balance the budget. She said Medicaid officials have warned they may run out of money to make payments by March.

Rees said talk of cutting coverage for long-term care would be a huge blow to the hospital.

“We’ve got 19 patients in our nursing home, 17 of which would no longer be being paid for,” he said.

He said the hospital can’t just eliminate staff and shut that home down: “We have to have a safe place to discharge them to.”

They set that hearing for Jan. 13.

– Contact reporter Geoff Dornan at or 687-8750.