Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Ryan Daniels with William Blair.
Ryan Daniels - William Blair
I wanted to dive into the charity care issue a little bit more if I could. From your comments it seems like in Colorado and California maybe the state budgets have actually forced some of the state run facilities to be shut down or some of the beds to be reduced, is that what you were indicating in your commentary?
Joey Jacobs
Yes, it is. What happened in the third quarter for us in Sacramento County was it is really county/state funds. The Sacramento County has a 100 bed psychiatric hospital for charity/indigent patients for that county and starting at the end of June 1st of July they started diverting patients away and then closed 50 beds of the 100 beds leaving the med-surg emergency rooms and the three free standing psych hospitals in the area as the place for these patients to migrate to. For example in the third quarter of ’08 for our facilities in this market we recorded under $100,000.00 in charity and this time we recorded just about $1.7 million in the third quarter. Now we believe it is going to be moderating in the fourth quarter and we have an action plan. There are some things we can be doing at our two facilities there to mitigate this impact to the Company.
We have also begun dialogue with the county officials about reimbursement and getting reimbursement, so there is an action plan there where we can moderate the level of this charity care. We always took some charity care in those facilities, but all of this occurred in the third quarter for us in Sacramento County and so similar to Colorado it started a little bit earlier, maybe at the beginning of the second quarter there, and we have already taken actions at our facility there. We think the charity level will be going down going forward, trending down.
So, they make up about 75% of the increase in the charity care from third quarter ’09 over third quarter ’08.
Ryan Daniels - William Blair
Okay that is really helpful color. Just to be perfectly clear, when you are talking about charity care they will come to your facility and because you are a freestanding site, unlike an acute care hospital with a psych unit you actually do not get paid anything from the state for those patients?
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