Some hospitals fear losing their right to participate in the Medicare program due to poor quality of care or a string of safety mishaps. But others fear losing their Medicare revenue stream because the federal government no longer considers the facilities to be actual hospitals.
Ozarks Community Hospital health system based in Springfield, Missouri, lost its ability to participate in Medicare specifically because it lost its designation as an actual hospital, according to Becker's Hospital CFO. Although the facility intends to appeal the decision, Medicare's action may force it to close its inpatient unit, surgery and emergency departments by the end of this week.
Paul Taylor, Ozarks' chief executive officer, told Becker's Hospital CFO that a number of factors have led to a “forced evolution” of the hospital. Among them: a lack of expansion of Medicare eligibility in Missouri under the Affordable Care Act, payment clawbacks by recovery audit contractors and conflicting regulations from the Centers for Medicare & Medicaid Services.
As a result, Ozarks has tried to shift more healthcare services to the outpatient and primary care side. That move led to CMS claiming it no longer fits the federal designation for a hospital. And it's something smaller facilities better consider, Taylor told the publication.
"That's the warning to the other health systems," Taylor told Becker's, adding that another rural hospital CEO called him up in tears worried that her facility might be next.
Rural hospitals and healthcare systems are already under considerable financial pressure. A report issued by iVantage Health Analytics last year concluded that 13 percent of rural hospitals nationwide are financially vulnerable. As many as 200 are in danger of immediate closure. In states such as Georgia, many rural hospitals are in immediate danger of going out of business, even without scrutiny from the feds.
- read the Becker's Hospital CFO article