Olympic Medical Center says it lost eligibility for critical federal drug discounts because of a poor payer mix. But here’s the problem: its own numbers show Medicaid discharges at 13%—well above the 8% threshold required. Add in leadership resignations, and the real issue isn’t just finances. It’s credibility.
Olympic Medical Center (OMC) has had a turbulent summer. The Centers for Medicare and Medicaid Services (CMS) recently extended its provider contract to September 20, buying the hospital a short reprieve from the threat of losing federal payments.
At the same time, OMC’s leadership team is in flux: Chief Operating Officer Ryan Combs resigned, citing personal reasons, and Chief Financial Officer Lorraine Cannon is also stepping down, citing personal reasons. On Monday, former CEO Darryl Wolfe made his own exit, walking out of the hospital lined with employees applauding him. He, too, resigned for personal reasons.
But the biggest issue facing OMC may not be leadership turnover. It’s credibility.
The 340B threshold
Olympic Medical Center claims it lost eligibility for critical federal drug discounts because of its “payor mix.” For years, OMC has blamed this same mix of privately insured, Medicare, and Medicaid patients for its financial struggles. But now comes the contradiction: the payor mix is apparently too weak to sustain the hospital’s bottom line—yet somehow not “poor enough” to qualify for the federal 340B Drug Pricing Program, which requires that Medicaid cover at least 8% of patients. So what's the real story? According to the Peninsula Daily News, OMC’s own numbers show Medicaid discharges at 13%, well above that threshold. Coupled with a wave of leadership resignations, the issue facing OMC is no longer just about finances. It’s about credibility.
Numbers that don’t add up
Hospital leaders have explained the disqualification by pointing to shifts in payer mix. But the numbers tell a different story. The very same poor payer mix that OMC has long cited as its greatest financial burden should be exactly what makes it eligible for 340B.
Instead, the explanation being offered publicly doesn’t square with the math.
For a hospital already under scrutiny, the contradiction raises serious questions:
Is OMC miscalculating eligibility?
Are they failing to communicate the numbers clearly?
Or is the community simply not being told the full story?
Why it matters
Losing access to 340B isn’t an abstract accounting error. It means higher costs for patients, fewer resources for uncompensated care, and less financial stability for a hospital that the entire community depends on.
With CMS deadlines looming and senior leadership departing, OMC’s first step toward restoring confidence must be straightforward: clear, honest answers about why their numbers don’t add up.
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