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Will the 'Save Rural Hospitals Act' save rural hospitals?

by Lisa Chamoff, Contributing Reporter | December 06, 2015
From the December 2015 issue of HealthCare Business News magazine

“We’re proud of the things that we’re doing despite the fact that we’re facing all these cuts,” Raffoul says.

But even in spite of the gains White Memorial has made in the last 20 to 30 years, there is always the worry that the amount of the cuts, and the speed at which they are being implemented, will propel the facility back into uncertainty. “We are thankful we have been able to survive these cuts,” Raffoul says. “I can tell you that looking forward, unless some of these initiatives are frozen or taken off the table, we will be put in the same spot in the next few years.”

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Continued rural closures
Rural hospitals face many of the same challenges as facilities in large metropolitan areas — DSH and other cuts to reimbursements also impact rural facilities — though limited access to public transportation and a population that tends to skew older, and that is less financially secure because of losses in manufacturing jobs, also hurt. A lower population also hurts rural facilities, even with the transition from volume-to-value-based reimbursement, says Joann Anderson, president and CEO of Southeastern Health, a nonprofit health system in Lumberton, N.C., that runs a 452-bed facility with acute care, intensive care and psychiatric services.

Compared to an urban facility that may treat 100 patients for a similar issue, a rural hospital with one bad outcome is more likely to be penalized, Anderson says. “The way the value is being measured is the percentage of patients with expected outcomes,” Anderson says. “That scale is difficult for us.”

The picture for rural hospitals is similar to last year, with hospitals closing at a rapid pace. Some say this is due to a number of states blocking the Medicaid expansion offered under the Affordable Care Act, though many agree that other factors have combined to make it a particularly tough climate. The North Carolina Rural Health Research Program has estimated 57 rural hospital closures from January 2010 to the present nationwide.

Maggie Elehwany, vice president of government affairs and policy at the National Rural Health Association, says the situation has only gotten worse in the last year, and estimates there are more than 280 hospitals on the verge of closure. “What we are seeing is finally a greater recognition of the problem,” Elehwany says. In July, U.S. Rep. Sam Graves, R-Missouri, introduced the Save Rural Hospitals Act.

The legislation would essentially remove the cuts and penalties that hit rural hospitals particularly hard — among other things, it would eliminate Medicare sequestration cuts for rural hospitals, eliminate rural Medicare and Medicaid DSH reductions and delay the application of penalties for failure to achieve meaningful use with electronic health records. It would also eliminate the requirement for doctors to certify that a Medicare patient will be discharged or transferred to another hospital within 96 hours, which is a condition of payment.

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