SAN PABLO -- A new legal opinion suggests that Doctors Medical Center could be licensed to become a satellite emergency department under the county's jurisdiction, offering a possible avenue to preserve services at the foundering hospital that is at risk of closure.

The legal position paper recently received by county officials argues that the state's Department of Public Health has the authority to approve the conversion of the hospital to a satellite emergency department of the county, an option that could also increase reimbursement rates and free up county dollars to help close the hospital's budget gap.

The legal opinion, along with a bill introduced last week by Assemblywoman Nancy Skinner, D-Berkeley, that would designate DMC as a public hospital so that it could collect higher reimbursement rates, provides fresh hope that a plan can be crafted to avoid total closure of the hospital, which is drowning in red ink.

"Having a state bill which identifies some additional funding is helpful but not a full solution, and a legal opinion isn't actual state approval, so it's best to say there is continued hard work to be done," said Contra Costa County Supervisor John Gioia, of Richmond.

If the emergency department is absorbed as a satellite facility in the county system, patients would still have to be taken to other hospitals in the area if they need specialized care, as in the case of trauma and heart attacks. But a satellite emergency department has advantages over a freestanding unit because it could include better reimbursement rates under the county license and county subsidies. A satellite facility could also benefit from better integration with the resources of the county medical system.

"A satellite and a freestanding (emergency department) are pretty similar in some ways operationally," said Dr. Joseph Barger, director of Contra Costa Emergency Medical Services. "While there could be an advantage of having an associated medical staff of another entity, there would still be the challenge of making sure that patients who need additional care can be promptly and efficiently transported elsewhere."

DMC runs an $18 million annual deficit, driven mostly by a payer mix that is about 80 percent Medicare and Medi-Cal patients, and only 11 percent privately insured, according to 2013 statistics. DMC is managed and funded by the West Contra Costa Healthcare District, which comprises about 250,000 West County residents but does not get subsidies from the county government.

Skinner's bill, AB 39, has until Sunday to pass. In an email statement Monday, Skinner made particular note of DMC's nonemergency facilities. "Doctors Medical Center has, among other things, an outstanding cardio unit and dialysis center," she wrote.

Gioia and West Contra Costa Healthcare District Chairman Eric Zell said the hospital's future rests on dual tracks of action, and whatever is successful will help determine the outcome. Zell said earlier this week that if Skinner's bill became law, the new money it would free up could be a "part of a puzzle of funding" that saves the hospital as a full-service facility, an option largely written off just days before.

An Aug. 21 paper written by Hooper, Lundy & Bookman P.C., a San Francisco law firm that specializes in health care issues, concluded that DMC can be granted license to operate as a satellite emergency department of the county system by a decision from the California Department of Public Health.

"We do not believe that a standby emergency department must be located in a 'hospital building' that provides basic and inpatient services," the report concluded.

DMC and county officials met with state health department representatives in early August to discuss a satellite emergency department, according to the paper, but state officials argued that a satellite emergency department must be within a facility that provides inpatient services as well in order to get the proper licensing.

According to the paper, 89 percent of the 40,000 patients who go to DMC's emergency room annually don't need additional inpatient care, meaning only about 4,000 annually would likely require transport to another facility.

Nurses unions and community advocates have pushed hard against the satellite emergency department idea, arguing that the loss of basic health care and inpatient services at the hospital is unacceptable, particularly in a poor area of the county with a high proportion of elderly residents. About $9 million in annual parcel taxes voters passed in 2004 and 2011 to fund the hospital would still be collected if DMC is scaled down to a satellite emergency department.

While maintaining a full-service hospital is still an option, Gioia and Zell said, the satellite emergency idea significantly reduces the gaping budget gap and makes it more likely that the county and the other area hospitals could chip in to fill it. The other hospitals are eager to avoid the deluge of hospital visits should DMC close completely. A satellite emergency department could cut the gap from about $18 million to about $9 million, Gioia said.

"There could be willingness," Gioia said. "The other hospitals have said in our discussions that they are open to discussing funding of a different model that is sustainable, and the county has never said it is not willing to contribute to DMC; it just doesn't have $18 million annually."

Reposted from the Contra Costa Times