- Associated Press - Saturday, July 26, 2014

KENAI, Alaska (AP) - A surgical center recently opened its doors to patients, but not everyone can be treated at the new hospital.

Because Central Peninsula Hospital won’t enter a transfer agreement with the Surgery Center of Kenai, it cannot perform procedures on Medicare and Medicaid patients, the Peninsula Clarion reported (http://bit.ly/1l3Hm2F).

When the center was under construction, it requested agreements with Alaska Regional Hospital in Anchorage, Providence Alaska Medical Center in Anchorage and Central Peninsula Hospital in Kenai, said Harold Gear, the center’s vice president.

“The transfer agreement is just a protocol for how if you have an emergent patient how you will present them to the emergency room,” he said. “It’s just a ‘we’ll do this, you’ll do that’ delineation of responsibilities. It’s not a business agreement; it’s just a hand-shake protocol.”

Within two weeks of making the request, Alaska Regional gave the center an agreement and Providence offered an agreement, Gear said.

“Central Peninsula Hospital ignored us,” Gear said.

Months later, Gear heard back from Central Peninsula. The hospital officially declined.

The Surgery Center of Kenai meets state licensing requirements. But because the U.S. Centers for Medicare and Medicaid Services requires a local transfer agreement to treat those patients, the center needs an agreement with Central Peninsula Hospital, Gear said.

“So we’re being blocked from half of our patients by Central Peninsula’s unwillingness to give us a transfer agreement,” he said.

Central Peninsula Hospital CEO Rick Davis said he doesn’t see any benefits for his organization in a transfer agreement with the surgery center. Davis added while Medicaid and Medicare patients are low-payers, Central Peninsula Hospital is “very happy” to treat them.

“We’re owned by the borough, and the borough has a lease-operating agreement with the board to manage the hospital,” Davis said. “And one of the requirements of that operating lease is that we remain self-sufficient and off the taxpayer rolls - and that’s what we’re trying to do here.”

The surgery center is a Class C minor outpatient facility with a 23-hour maximum patient stay, Gear said.

Even if the surgery center is unable to get a local transfer agreement, the center would have enough business without government-insured patients to be profitable, Gear said. While making a profit is one goal of the center, another is to treat 100 percent of the patient population, he said.

Davis said 26 percent of the hospital’s business is Medicare and 16 percent is Medicaid. About 30 percent of the hospital’s business is insured patients.

“The reality is we would not see many (Medicaid and Medicare) patients leave here,” Davis said. “It would be more the insured folks.”