Skip to main content

Rural Healthcare Advocates Rip MedPAC's Claims on Access, Reimbursement

 |  By John Commins  
   June 27, 2012

Advocates for rural healthcare providers are objecting to a Medicare Payment Advisory Commission report this month that says that access to rural healthcare services is "similar" to access in urban areas and that reimbursement for that care is "adequate."

"MedPAC's report simply doesn't match reality," Lance Keilers, CEO of Ballinger (TX) Hospital and 2012 National Rural Healthcare Association president, said in a media release. "This report lacks validity. It's not what I see every day in rural America."

Maggie Elehwany, NRHA's government affairs and policy vice president, says the MedPAC report to Congress waves two red flags in the faces of rural providers.

"The first is the assertion that access to care really is no longer a crisis in rural America. MedPAC for the first time ever made that inference and we take strong objection to that," Elehwany tells HealthLeaders Media. "In the rural counties in this country 77% are considered health professional shortage areas. For much of America just making their way to a physician still remains a challenge."

Elehwany says MedPAC contradicts itself on its claims of access.

"MedPAC says based on their interviews with different beneficiaries and some of their data, that because the number of encounters that a senior beneficiary has with a provider is relatively similar between a rural and an urban area, then that must not be an access problem," she says.

"But in the following sentence they state the reason that this is fairly similar is because rural patients have to travel to urban centers. To us that is so frustrating. That is the definition of an access problem if you are forced to travel to urban areas to get healthcare."

The second red flag flaps at MedPAC's suggestion that reimbursements to rural providers are on par with urban providers, if not better. Rural providers interpret those comments as a threat to the status of the 200 or so Medicare Designated Hospitals in this country with 100 beds or fewer that get a slightly higher reimbursement because 60% or more of their patients are Medicare beneficiaries.  

In letters this week to the chairs and ranking members of the House and Senate "money committees" 23 advocacy groups, including NRHA and 11 state hospital associations, call for the extension of the Medicare Dependent Hospital designation, which will expire on Oct. 1 if Congress fails to act.

In addition, the letter warns that "hundreds more rural facilities will be severely harmed due to the October 1 expiration of the rural current 'low-volume' adjustment" for rural hospitals that incur higher incremental Medicare costs due to a low-volume of Medicare patients.

"When Congress shifted to the prospective payment system years ago, hundreds of rural hospitals closed. The system did not work for them," Elehwany says. "Congress intervened because rural patients were losing critical access points for healthcare. They created special hospital designations and they worked."

Elehwany says it's important to remember that senior populations in rural areas are quite vulnerable. "They are poor and have a higher percentage of chronic diseases than their urban counterparts and they are overall a sicker population," she says. "So these hospitals are treating these vulnerable individuals and no facility makes money on Medicare reimbursements. It's not like Costco where you can make up for it because you have this huge volume of other patients you are treating."

Elehwany believes that MedPAC's analysis is shortsighted and incomplete.
"When MedPAC says these rural payments aren't specifically targeted, or some are doing better than urban hospitals they don't do the math and take the next step and figure out what would happen to these small rural hospitals if they lost these payments," she says. "We believe these hospitals will be forced to limit services and cut staff and some will have to close their door."

Also, Elehwany says rural hospitals face still another threat to Medicare reimbursements if the 2% cuts mandated by sequestration take effect in January. Averting those cuts would also require election-year action from a gridlocked Congress.  

"That 2% across-the-board cut through sequestration disproportionately harms rural providers," Elehwany says. "A large urban facility with a $200 million budget can probably find ways to tighten their belt and cut 2% somewhere. If you're a small rural hospital with maybe a $5 million budget, 2% is a very significant margin, which means you will probably have to cut services. More than 40% of rural hospitals are already operating in the red. Further cuts to Medicare may put some of those over and cause doors to close." 

Rural healthcare advocates understand the powerful constituent clout that rural hospitals carry with each member of Congress. Senators and Congressmen don't want hospitals in their districts to close because it represents a trifecta of negativity; lost jobs, lost economic activity, and lost access to healthcare.

With that in mind rural healthcare advocates are urging anyone who cares about the topic to head to Capitol Hill on July 30-31 to make their concerns known to their member of Congress.

"Let them know how important these payments are, what they mean to keeping the doors in these rural hospitals in their districts open," Elehwany says. 

The event comes immediately before the August recess and Elehwany says rural health advocates should use the face time at the Capitol to invite their respective members of Congress to the hospitals in their home districts "and show them the great work they are doing, show them the patients they treat and the narrow financial margins they are working under."

Even with the gridlock made worse during an election year, Elehwany believes that rural hospitals can make a strong and bipartisan argument for self preservation. "The climate on Capitol Hill is very different this year," she says. "Every program has to be justified and we are fine with that. We feel we can do that."

And despite the feisty rhetoric Elehwany says rural healthcare providers have no desire to pick a fight with MedPAC.

"We are trying to tell Congress that this report is incomplete," she says. "The rest of the story is that rural hospitals may be doing a little better than the days when everybody was closing but if you took those Medicare payments away and took that MDH status away we are going to go back to those days. We believe the program created by Congress is doing exactly what it was intended to do, which is keep these hospital doors open."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

Tagged Under:


Get the latest on healthcare leadership in your inbox.