CAH cuts short-sighted, put rural access at risk

First, full disclosure: I was raised a city girl--well, I grew up in the suburbs of Boston in eastern Massachusetts where I still live today--and am fortunate to have access to some of the finest hospitals in the country. If I want or need a second opinion of a medical diagnosis, I have a relatively short drive (30 or 45 minutes depending on the traffic) to the Longwood Medical area in Boston.

And though there are rural areas in the western part of the state, I have no direct experience with what it is like to drive hours for a medical appointment or services.

Yet, as a longtime healthcare reporter and editor, I have an understanding of the challenges facing patients and healthcare organizations in rural America. So my heart sank a bit this week when I read in FierceHealthcare that the 25-bed Charlton Memorial Hospital will close its doors today, the third rural hospital in Georgia to close this year. The closure--a trend affecting small community hospitals across the country--may force elderly residents and those living below the poverty line to travel long distances for healthcare, MSN Money reported.

The announcement comes in the wake of a Department of Health & Human Services' Office of Inspector General report earlier this month that Medicare could save millions by re-evaluating critical access hospital (CAH) certification. Essentially, the OIG wants the Centers for Medicare & Medicaid Services to have the right to change the requirements so they can "recertify" CHAs--which would mean nearly two-thirds of the existing CAHs would lose that designation.

Congress created the CAH program in 1997 as part of the Federal Balanced Budget Act after hundreds of rural hospitals across the country closed. To make sure Americans who lived in these remote areas could still access healthcare, hospitals with 25 or fewer beds could receive CAH certification if they met certain requirements, such as being located at least 35 miles from the nearest hospital or a 15-mile drive in areas with mountainous terrain on only secondary roads.

CAHs are paid more than acute care hospitals. The program calls for the government to reimburse them for most inpatient and outpatient services at 101 percent of reasonable costs. The National Rural Health Association (NRHA) said the plan worked: rural Americans had reliable access to local healthcare and it stopped the closures of hospitals in those areas.

But over the years the program expanded and states were allowed to waive the distance requirement and designate small hospitals as "necessary providers" of critical access hospitals. Kaiser Health News reported the program grew so quickly that now nearly one in four acute care hospitals receive the extra payments. Congress eliminated the loophole in 2006 but grandfathered hospitals that already received the exemption.

Based on the OIG's report, most CAHS would not meet the location requirements if required to re-enroll in the program. The study projected that the government would have saved as much as $449 million in 2011 if it decertified CAHS that were 15 or fewer miles from the nearest hospital.

Those are pretty compelling numbers.

But the cost could be greater than the savings. According to the National Rural Health Association blog, the action would essentially "kill rural healthcare." Alan Morgan, CEO of the NRHA told Rural Health Voices that "If the full report were implemented, it would result in shutting down up to 70 percent of a state's rural hospitals." 

Even federal lawmakers are worried about the OIG recommendations. After the report was issued, First District Congressman Rep. David McKinley (R-WV) urged HHS to examine all the facts before they made a decision that could make the difference between life or death. "If someone living in a rural area has a heart attack," he said, "the first hour is critical to their survival. If a hospital is too far away, the results could be devastating."

And the OIG recommendation isn't the only factor putting rural health in jeopardy. The fact that so many states have refused to expand Medicaid as part of healthcare reform has also put rural healthcare in crisis, Tim McBride, an economist with the Rural Policy Research Institute's Center for Rural Health Policy Analysis, told a Milwaukee conference on rural health this week.

Perhaps there is room for compromise so the government can tighten its purse strings while citizens in rural America continue to have access to services. A KSN report gives some hope for that, stating that CMS generally supports the OIG recommendation but also is in favor of President Barack Obama's more limited proposal to eliminate critical access status only for hospitals less than 10 miles from another hospital and to cut the reimbursement to 100 percent of reasonable costs. - - Ilene (@FierceHealth)


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