Dive Brief:
- The American Hospital Association on Monday released a roadmap aimed at alleviating pressures on rural hospitals and increasing access to affordable, high-quality care in the communities they serve.
- While rural hospitals struggle with low patient volumes and geographic isolation, they also face economic uncertainties, growing regulatory burden and the opioid crisis.
- Recommendations include updating Medicare and Medicaid payment rates, creating new value-based care models that improve financial sustainability for rural health providers, relief from outdated regulatory requirements and expanded access to telehealth.
Dive Insight:
Since 2010, 95 rural hospitals have closed due to financial distress and changing healthcare dynamics, according to the North Carolina Rural Health Research Program. A General Accountability Office report found 64 hospitals closed between 2013 and 2017, more than twice the number in the previous five years.
Rural hospitals face many of the same challenges facing all hospitals in today’s changing healthcare environment, such as shrinking inpatient volume, rising costs and reduced reimbursement. But they also suffer from heavy reliance on public coverage programs like Medicaid and the Children’s Health Insurance Program (CHIP) and lack the resources and capacity to deal with new and emerging issues such as the opioid epidemic or cyber threats.
For many rural hospitals, the choice boils down to reducing services to make ends meet or closing their doors completely, leaving residents without a local option for their medical needs.
“Rural hospitals are not just access points for care, they are cornerstones of care for the communities they serve,” AHA President and CEO Rick Pollack said in a statement. “In spite of their unique challenges, providing access to quality care where and when their patients need it will always be the goal of rural hospitals.”
To help rural hospitals survive and thrive, federal policies must be updated and new investments injected into struggling rural communities, according to the report. It points to the following policy priorities:
- Adequate reimbursement that updates Medicare and Medicaid rates to cover the cost of care.
- New value-based payment models that increase financial predictability.
- Regulatory relief from requirements that don’t enhance patient care.
- Wider access to telehealth, coupled with actions that reduce the burden of health IT costs and compliance requirements on rural hospitals.
- Workforce programs to address provider shortages.
- Unsustainably high prescription drug costs and attacks on the 340B program.
For example, the AHA calls for Congress to support new care models, such as an emergency medical center designation, that would let existing facilities limit services to emergency and outpatient care. “In addition to having emergency services provided 24 hours a day, 365 days a year, communities would have the flexibility to align additional outpatient and post-acute services with local needs, and receive enhanced reimbursement,” according to the report.
The concept had bipartisan support in both houses of Congress last year in the Rural Emergency Acute Care Hospital (REACH) Act (S.1130)) and the Rural Emergency Medical Center Act (H.R. 5678). With the new Democratic majority in the House, momentum could build to address these and other healthcare issues.
Other possible care models are being evaluated by the Center for Medicare and Medicaid Innovation, including the Rural Community Hospital Demonstration, which offers cost-based reimbursement for inpatient services for rural hospitals with 25 to 50 beds, according to the report.
The AHA also recommends that lawmakers place a permanent moratorium on enforcement of CMS “direct supervision” requirement for outpatient services provided in critical access hospitals and certain other small, rural hospitals. And it urges Congress to lift the cap on the number of Medicare-funded residency slots to stem provider shortages.
A statutory change is also needed to remove the physician certification requirement from the 96-hour rule, which requires doctors in CAHs to certify that a Medicare beneficiary may be reasonably expected to be discharged or transferred to another hospital within 96 hours of having been admitted.
The group also calls for CMS and private insurers to update covered services and align payment rates with actual costs of providing care, including not adding any new site-neutral payment policies.
CMS also needs to clarify its rules on “co-location” arrangements between hospitals and healthcare professionals and develop more flexible Medicare Conditions of Participation that take into account rural hospitals’ specific circumstances, AHA says.