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Taos hospital lays off 12 employees

Holy Cross management struggles to plug revenue gap while federal payments pending

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Holy Cross Hospital laid off 12 employees Friday (Jan. 12), including positions in management and among health care professionals, as the hospital wrestles with a hefty gap between revenues and expenses. The employees who were to be laid were notified Thursday (Jan. 11) and the rest of the staff was notified Friday. They had been forewarned in December that layoffs were imminent, but would occur after the Christmas holiday, according to Bill Patten, chief executive officer of Taos Health Systems, which manages the hospital.

Patten said he met with employees in six meetings over two days in December to explain the financial situation and likelihood of, but promised not to lay anyone off until after the Christmas holiday.

Among the staff laid off are the marketing director, the executive secretary, two other secretaries, two medical transcriptionists and a nuclear medicine technician.

Patten said the hospital has struggled with the gap between revenues and expenses for nine months, due to a variety of problems including a delay in payments from Medicaid. The hospital shifted to a new Medicare payment model - Critical Access - in the summer hoping to make up some of the revenues. "We were hoping Critical Access would blunt some of this," Patten said. "It didn't happen as quickly as we would have liked."

In the fall, the hospital pushed off payments to vendors and shifted funds as it could to cover salaries. Patten said Centinel Bank of Taos helped the hospital set up a $2 million line of credit so they could cover salaries. "Of all our priorities, we have to take care of our employees," he said. "That's number one on the list."

But it wasn't enough and the hospital was behind on payments.

Making matters worse, the cost to renew the hospital's malpractice insurance this year increased more than $600,000. In addition, Medicare said it had overpaid the hospital by $691,000 in 2013 and is now requiring the hospital to repay the funds, Patten said. "That's an additional hit on our revenues at the exact same time we could least afford it," Patten said.

Some of the employees laid off have already applied for other jobs at the hospital. Others have a few more weeks before their jobs end.

This is a developing story. Check back at www.taosnews.com for more details.

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