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Dr. Nagarjuna Yerra said he's moving forward with plans for the $1.3 million center and will reapply for the certificate of need in the fall. The proposed center has been a source of contention between Yerra and Halifax Regional Medical Center.
Yerra and his project adviser, Robert Blake, explained to the Daily Herald that the center can operate without a certificate of need, but will be limited as far as some of the charges that would normally be absorbed by insurance companies.
Yerra and Blake both said they were disappointed by the state's ruling, which Blake noted did not reflect what was going on in the marketplace. Blake said he knew of two recent instances in which local patients had left the Valley for treatment at private clinics because it was cheaper.
Yerra, who already owns a private gastroenterology practice and performs the majority of Halifax Regional's endoscopy procedures, stressed that he would provide first-class care at the clinic and that he planned to continue to work at the hospital and meet its needs also.
“We are not going to compromise on the care of patients,” Yerra said. “Our intention will always be toward providing premier medical care for the people. That's our only goal.”
State reports discrepancies
In its findings from April 13, the Certificate of Need Section reported that Yerra had not provided adequate support for many of his arguments.
Yerra projected the over-50 population in Halifax County to be 20,729; the state Demographic Office projected that number to have been 19,268 in 2006. Yerra's demand formula also was based on 100 percent of people over 50 undergoing endoscopy.
According to the findings, the American Cancer Society's goal is that 75 percent of the over-50 population will have had a recent colo-rectal cancer screening, which includes tests other than endoscopies, such as occult blood stool tests.
Also according to the findings, “The applicant's analysis and projections regarding endoscopy services artificially inflate demand for the proposed services and are unsupported and unreliable.”
The findings further state that Yerra failed to provide the methodology for his assertion that the proposed center would increase the number of endoscopy procedures approximately 17 percent from year 1 to year 2, and 14 percent from year 2 to year 3.
Yerra also had reported that most health plans offered by Blue Cross Blue Shield of North Carolina treat endoscopies performed in a physician's office as part of a physician's office visit.
He argued the patient may only need to pay a specialty physician office co-payment, which could be as low as $30, where patients with high deductible health plans could pay more than $1,000 out of pocket for endoscopies performed in hospitals.
The Certificate of Need Section reported that though some existing licensed ambulatory facilities have negotiated with Blue Cross Blue Shield to bill their endoscopy procedures as being performed in a physician office, Yerra did not provide any evidence in his application that the insurance company would agree to bill the procedures performed in his office in such a manner.
Yerra and Blake said they would follow whatever guidelines are required by the state to make the new clinic meet all standards.
Blake said he felt the state had misinterpreted some parts of the certificate of need application, and they would be clarifying those and resubmitting them.
Local opposition
Hospital officials have worried that a private endoscopy practice would take many paying endoscopy patients away from HRMC, which would still be required to provide the procedure for those patients who cannot pay for it in full.
That could put the hospital, which already has a small operating margin, in the red, they argued.
Nearly 20 community members spoke at a hearing on the matter in January; most were opposed to the new center because of the negative impact it could have on the hospital.
William Mahone, president and CEO of HRMC, prepared a statement after the Division of Facility Services rejected Yerra's certificate of need request last month, saying that the hospital's endoscopy center, which opened more than 20 years ago, operates under capacity.
It went on to say that health care services in rural areas should work together to meet as many patient needs as possible.
“This decision by the Department of Facility Services will help keep Halifax Regional moving forward,” the statement read.
“We are grateful for the support we've received from the community on this issue and we renew our commitment to putting patients first and contributing to the advancement of the region.”
Herald Managing Editor John Moeur contributed to this story.
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