From the December 2013 issue of HealthCare Business News magazine


For example, the report suggests, the CMS could follow the lead of some states and declare that hospitals in high-poverty areas could be exempt from the distance requirements. Or the government could change the wording to say critical-access hospitals must be at least 35 miles from another hospital that offers the same services.

“The existing location and distance criteria already represent a uniform standard to which all CAHs certified since January 2006 have been subjected,” Tavenner wrote. “We believe a facility's Medicare certification as a CAH versus a [non-critical access] hospital should not be tied to rapidly fluctuating criteria.”


Playing the game

Rural health isn’t just a matter of serving patients on a smaller scale — hospitals in rural areas face unique health care challenges different from those of urban facilities. Rural populations are more likely to be medically underserved, uninsured, sicker, poorer, and older than urban populations.

As a result, rural health proponents call for alternative payment methodologies and incentives to help address these additional problems. Under current fee-for-service reimbursement models, rural facilities suffer an inherent disadvantage given their low patient volumes.

“Unless you’re getting paid to keep people healthy, health care is still the more you do the more you make,” says Febus. Pullman’s demands are especially complex since it serves a diverse population of both Medicare/Medicaid patients and younger students with insurance. “If you were truly 100 percent Medicare/Medicaid — it wouldn’t matter if you had 10 or 1000 patients. You’d be paid 100 percent. But now we have to play both games. It creates some interesting dynamics,” he says.

In fact, the critical-access exemption was originally created to offset the financial challenges created by this payment system. In the 80s and 90s, over 400 rural hospitals closed across the country.

“New members of the House and Senate don’t have the institutional memory because they weren’t there to know why these rural hospitals statuses were created,” says Maggie Elehwany, government affairs and policy vice president of the National Rural Hospital Association. She fears that if the proposed budget cuts go through, the country will see history repeating itself with a new rash of rural hospital closures.

The impact
Because these budget proposals are pending, there’s little way to know for now what the extent of the damage will be for rural facilities. But given that Congress is determined to trim costs across the board, hospital executives realize that it’s a matter of when, not if.

December 2013 Magazine

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