University of Mississippi Medical Center will close two of its Jackson wellness centers by the end of the month in its ongoing struggle to reconcile a $24.5 million budget shortfall.
Last month, UMMC announced an unexpected $35 million reduction in Medicaid funding to the hospital. The cut came after the Division of Medicaid reworked the formula for disproportionate share payments, which reimburse hospitals across the state for the charity care they provide.
After an appeal on the formula’s methodology, Medicaid reduced the $35 million cut by $10.5 million. But UMMC said in a release that departments and units across the state are working to reduce expenses by $24 million by June 30.
“We regret having to close these locations but our need to improve our finances leaves us little choice,” said Kevin Cook, chief executive officer of UMMC’s health system. “We are attempting to minimize impacts on employees and members through this transition.”
UMMC plans to close the Northeast and Downtown Wellness Centers. For fiscal 2017, the two Jackson centers are projected to lose a combined $400,000.
“The Northeast location is in dire need of expensive renovation and upgrades,” according to Marc Rolph, director of public affairs at UMMC.
The Lakeland Drive Wellness Center, which will not close, is also in need of substantial capital improvements to bring it up to the standards UMMC said it requires “supporting the health-care continuum, recognizing that adequate exercise and proper nutrition are cornerstones of good health and disease prevention.”
Those improvements would cost between $6 million-$7 million per facility, according to UMMC. So UMMC plans to use funds from the eventual sale of the Northeast center to remodel the Lakeland Drive location. Short-term improvements, UMMC said, will include moving almost 50 pieces of new, state-of-the-art cardio equipment there from the downtown facility.
A combined 36 staff members at the two centers will remain on the job through March 31 and UMMC said they can apply for openings at the three remaining University Wellness Centers in Madison, Brandon and Lakeland Drive (Flowood).
Membership in the centers won’t change, according to UMMC. Those using the two Jackson locations, located at 100 E. Capitol St. and 46 Northtown Drive, will continue to have full access to the other three centers.