Charleston Area Medical Center will cut its budget by more than $20 million for the 2013 fiscal year because of a drop in Medicare payments and the expiration of a federal reimbursement program.
Larry Hudson, the hospital system's chief financial officer, presented the budget at a Board of Trustees meeting Wednesday.
He said the hospital typically sees a $5 million increase in Medicare reimbursements each year. Next year, those reimbursements will decrease by $254,000.
The next fiscal year also will bring an end to the Upper Payment Limit program.
That 24-month program allows the hospital to pay a small tax on its net income. The state takes that money and sends it to the feds, who send back $4 for every dollar CAMC is taxed.
Because the program works retroactively, CAMC will receive 18 months worth of Upper Payment Limit dollars this year, about $15 million.
The hospital system will receive only six months of payments in 2013, at $4.5 million.
Hudson there is a chance the state may extend Upper Payment Limits, however.
He said he's heard state lawmakers like the program, which brought $100 million into the state last year.
"It's good for the economy," Hudson said.
Board members unanimously approved the budget on Wednesday, so the hospital will submit its budget to the state Health Care Authority on Nov. 2.