Bipartisan senators won quick applause from the hospital lobby after reintroducing a bill late last week to modify and extend certain Medicare payments to rural hospitals.
The Rural Hospital Support Act had been first introduced in the House in 2021 and again in the Senate in 2022 but never got past committee referral.
The latest push from Sens. Bob Casey, D-Pennsylvania, and Chuck Grassley, R-Iowa, again calls for amendments to the Social Security Act “to rebase the calculation of payments for sole community hospitals and Medicare-dependent hospitals, and for other purposes.” Full text of the bill’s latest iteration has not yet been published for the public.
A supportive letter from American Hospital Association (AHA) Senior Vice President of Advocacy and Political Affairs Lisa Kidder Hrobsky published this week, however, outlined the bill’s potential impact on rural hospitals’ finances.
The first of these is an amendment to make permanent the Medicare-Dependent Hospital (MDH) program, which boosts payments to eligible hospitals that have a high share of Medicare patients. The program was slated to expire in late 2022 before being extended to Sept. 30, 2024, as part of the major end-of-year omnibus spending package.
"The network of providers that serves rural Americans is fragile and more dependent on Medicare revenue because of the high percentage of Medicare beneficiaries who live in rural areas,” Hrobsky wrote to the senators. “These payments allow MDHs greater financial stability and leave them better able to serve their communities. Your legislation would make this important program permanent.”
The legislation would similarly lock in the current version of the low-volume Medicare adjustment, which helps providers in smaller communities that don’t see enough patients pay for their service offerings, Hrobsky wrote.
Further, the proposed bill gives MDH and sole community hospitals more flexibility by providing an additional base year to choose from when the hospitals calculate their payment eligibility. Both of those expansions “provides the increased support needed now by many rural hospitals,” Hrobsky said.
“We are pleased to support this legislation and look forward to working with you and your colleagues to achieve its passage,” she wrote.
Rural hospitals have been on the front line of industrywide labor shortages, patient volume interruptions and other financial challenges that cropped up during the pandemic and came to a head in 2022.
Nearly a third are at risk of closure due to expenses outpacing their payments, per the Center for Healthcare Quality & Payment Reform, and experts expect that closures will likely increase in 2023 barring intervention.