The American Hospital Association on Thursday criticized a Department of Health & Human Services' Office of Inspector General report that recommends dramatic changes to the critical access hospital (CAH) program.
The report urges the Centers for Medicare & Medicaid Services to seek legislative authority to remove the permanent exemption from the distance requirement for necessary provider CAHs and revise the CAH Conditions of Participation to include alternative location-related requirements.
The government created CAH certification to ensure rural beneficiaries had access to hospital services. Medicare reimburses CAHs at 101 percent of their reasonable costs instead of rates set by prospective payment systems. Hospitals can receive CAH certification if they meet regulatory requirements, such as being located at least a certain driving distance from other hospitals and being located in rural areas.
The 35-page OIG study plotted the locations of CAHs and other hospitals onto digital maps to determine whether CAHs would meet the location requirements if they were required to re-enroll in Medicare. The OIG also used 2011 claims data to calculate the potential savings to Medicare if CMS were to decertify CAHs that wouldn't meet the location requirements.
The OIG found nearly two-thirds of CAHs would not meet the location requirements if required to re-enroll. The vast majority of these CAHs would not meet the distance requirement. It concludes Medicare could have saved as much as $449 million if it had the authority to decertify CAHs that were 15 or fewer miles from their nearest hospitals in 2011.
But Joanna Hiatt Kim, AHA vice president of payment policy, says the recommendations are "completely inappropriate and demonstrates an unfortunate lack of understanding of how healthcare is delivered in rural America."
"If the recommendation were implemented," Kim said, "many of these facilities may be forced to close and patients could lose their access to essential medical services."