A Rural Health Reform Shopping List

HealthLeaders Media Staff, September 23, 2009

For healthcare in rural America, there has never been a better time to confront policymaker bias against providers working in Out There Yonder parts of the country.

With key members of the Senate Finance Committee and the Blue Dog Democrats hailing from predominantly rural states, advocates for non-urban regions are more hopeful than ever that they are finally getting their message across.

"There are biases against rural areas out there," acknowledges Maggie Elehwany, vice president for rural affairs and policy for the National Rural Health Association, a national nonprofit, nonpartisan, membership organization with more than 18,000 members that provides leadership on rural health issue. "But this time, we're very fortunate to have members who get rural America. And they really do."

After all, she says, 25% of the nation's population lives in rural America, which takes up 90% of America's land mass.

Elehwany took some time out of her busy week analyzing the hundreds of amendments to the Senate Finance Committee proposal to explain what her group hopes to achieve.

And she didn't waste any time. No health reform bill will be effective, she says, unless it deals with the workforce shortage and the inequitable rural Medicare reimbursements that lead to that workforce shortage.

Here are some essential reform measures that hospitals, physicians, community clinics, and other care providers in rural parts of the country say are needed to correct inequities for providers in low-population areas of the country, Elehwany says.

Critical Access Hospitals (CAH) – Eliminate the requirement that a CAH must be located more than 35 miles from another hospital, but allow them that CAH designation, which provides for higher levels of reimbursement, if they serve a critical need in the community. Also, allow such facilities to go over the 25-bed rule if they have unexpected peaks in patient demand without losing advantageous reimbursement rates.

340B Program – Expand this program so that not just certain types of nonprofit hospitals can purchase prescription drugs at reduced rates. Elehwany says if rural hospitals and clinics can purchase prescription drugs at the same lower rates, it would save them $2.5 billion over the next 10 years.

Payment Cap – A Rural Health Clinic payment cap must be raised from its current $76.84 per patient, a rate set in 1970 that does not come near the cost of reimbursing for the cost of care, to $92.

Ambulance services – Eliminate the requirement that a critical access hospital can only be reimbursed for ambulance services within 35-mile drives, an unrealistic distance in expansive rural areas.

Disproportionate Share – Give parity to rural hospitals by removing a cap that blocks them from receiving more than 12% in disproportionate share add-on payments. Urban hospitals are not subjected to such a cap.

Health Information Technology – Provide the same incentives for rural hospitals to adopt HIT systems as Prospective Payment System (PPS) hospitals. CAHs should have priority access to grant funds offered in the federal stimulus package.

Physician Reimbursement – Provide an additional 5% payment to physicians working in rural areas, with an additional 10% for primary care doctors who practice in shortage areas to help recruit and retain doctors.

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