Mount Nittany Health faces new fees from Affordable Care Act, reports growth

While the federal Affordable Care Act will mean greater access to health coverage for many in the region, Steve Brown predicted one very concrete impact it will have for Mount Nittany Health.

“We’re going to have to pay close to $200,000 next year, as will every hospital,” Brown, president and CEO of Mount Nittany Health, said Monday at his annual State of the Health System Address at the hospital.

Brown said that Mount Nittany will see various new fees, including a $5,000 levy so the government can do research on the effectiveness of hospitals working within the plan.

The system also will pay a $19,500 health insurers fee and a $160,000 transitional reinsurance fee that will go into a pot to protect insurance companies against the risk of winding up with numerous high-risk customers. Mount Nittany will incur additional costs as a large employer and a health care provider.

Brown said Mount Nittany now has 2,120 employees, up from 1,376 in 2009 and second only to Penn State in Centre County.

His report — presented to a gathering of major donors, local business and political leaders, board members and individuals in management at the hospital and within the health system — was largely positive, and the system chief said Mount Nittany is poised to handle the looming expenses.

He pointed to factors such as the system’s A- Standard & Poor’s bond rating.

“We’re well-positioned for whatever comes,” Brown said. “We have a very solid bottom line, a strong operating margin. We have a strong cash reserve and a strong bond rating.

“Independently, we’re in as strong a position as we can possibly be.”

Brown said that Mount Nittany will engage national business and health care management consultants in an attempt to experience revenue growth and control costs.

“We’ll be working with them to identify where we have opportunities,” Brown said.

“It’s always more fun to raise a buck than to cut a buck,” he said.

Brown said Mount Nittany is working to strengthen ties with other health entities, including Geisinger and Penn State Hershey.

Other highlights of the report included:

•  Mount Nittany is working to coordinate electronic medical records among physicians, the hospital and other organizations, and is developing an online portal for patients to access their medical records.

•  Mount Nittany Physician Group has added more than 20 physicians this year, including four in family medicine and numerous specialists.

•  The health system has invested $180 million through capital improvements since 2009, including projects such as the Shaner Cancer Pavilion, the Mount Nittany Health building on Blue Course Drive, the new emergency department, the Sieg Neuroscience Center and the Centre County Children’s Advocacy Center near Bellefonte.

•  Mount Nittany is expanding its medical education relationship with Penn State to start a family medical residency program at University Park in 2015.

•  The system is participating in a national study aimed at reducing readmissions and improving care.

•  The system has seen significant increases in areas such as physicians, admissions, emergency room visits, births and surgeries.

Brown said the system now has 15 locations and serves patients in five counties.