Push­ing back

Pro­posed Medi­care cuts to ru­ral hos­pi­tals draw fire

Modern Healthcare - - THE WEEK IN HEALTHCARE - Paul Barr

Ru­ral hos­pi­tals are set to launch an ad­vo­cacy cam­paign on Capi­tol Hill aimed at lim­it­ing pos­si­ble fed­eral fund­ing cuts by ar­gu­ing that ru­ral care gen­er­ally is as good as ur­ban care and over­all costs Medi­care less.

The move comes as a num­ber of spe­cial Medi­care ru­ral pay­ments and pro­grams are set to ex­pire be­fore year-end and as ru­ral providers find them­selves in­creas­ingly a po­ten­tial tar­get of fed­eral pol­i­cy­mak­ers look­ing to trim spend­ing.

Ru­ral hos­pi­tals also would re­ceive sharper Medi­care cuts than their ur­ban coun­ter­parts un­der a re­cent pro­posed Medi­care in­pa­tient prospec­tive pay­ment sys­tem. And still loom­ing in the back­ground is the likely 2% cut in Medi­care re­im­burse­ment be­gin­ning in 2013

VIDEO that would re­sult from the pro­vi­sions of last year’s Bud­get Con­trol Act that kick in, known as se­ques­tra­tion.

There is a per­cep­tion in Washington that spe­cial Medi­care pay­ments and pro­grams de­signed for ru­ral hos­pi­tals are driv­ing Medi­care spend­ing growth and of­fer an area for cut­ting in a cli­mate when Congress is ea­ger to trim where it can, said Brock Slabach, se­nior vice pres­i­dent for mem­ber ser­vices at the Na­tional Ru­ral Health As­so­ci­a­tion, Kansas City, Mo., which is lead­ing the ad­vo­cacy push.

But a new Nrha-com­mis­sioned re­port found Medi­care av­er­age spend­ing per ben­e­fi­ciary to be 3.7% less costly in ru­ral set­tings than in ur­ban set­tings, data that in­dus­try of­fi­cials say will bol­ster their case with Congress. The re­port, pre­pared for the NRHA by ivan­tage Health An­a­lyt­ics, also found per-capita Medi­care in­pa­tient hospi­tal ser­vice spend­ing for ru­ral ben­e­fi­cia­ries to be 2% less than for ur­ban ben­e­fi­cia­ries and per-capita physi­cian ser­vice pay­ments to be 18% less for ru­ral ben­e­fi­cia­ries, though Medi­care out­pa­tient ser­vices spend­ing in ru­ral ar­eas was 14% higher.

“To then pe­nal­ize ru­ral providers by tak­ing away or lim­it­ing spe­cial pay­ment pro­vi­sions, that seems to be the wrong pol­icy ac­tion to take,” Slabach said.

He said the lower spend­ing did not come at the ex­pense of qual­ity care. The re­port’s au­thors found that nei­ther ur­ban nor ru­ral providers could be con­sid­ered a clear win­ner when look­ing at CMS Hospi­tal Com­pare Process of Care mea­sures. There also was no per­for­mance dif­fer­ence in out­comes mea­sures re­lated to 30-day read­mis­sion rates for heart at­tacks, heart fail­ure and pneu­mo­nia, though ur­ban hos­pi­tals out­per­formed in those three ar­eas con­cern­ing 30-day all-cause mor­tal­ity rates.

Among the ar­eas that are sub­ject to elim­i­na­tion if not ex­tended by Congress is the Medi­care-de­pen­dent hospi­tal des­ig­na­tion, which of­fers in­creased in­pa­tient re­im­burse­ment

to ru­ral hos­pi­tals with fewer than 100 beds and that have more than 60% of in­pa­tient dis­charges cov­ered by Medi­care. That pro­vi­sion is slated to end Oct. 1, ac­cord­ing to the NRHA.

That pro­gram has been in ex­is­tence for years, Slabach said, and would not re­quire ex­tra out­lays to keep it in place. Nev­er­the­less, the CMS is pre­par­ing for the end of the pro­gram by help­ing hos­pi­tals in that pro­gram that qual­ify for what is called the sole com­mu­nity hospi­tal des­ig­na­tion, which of­fers a dif­fer­ent set of bonus pay­ments.

Also ex­pir­ing Oct. 1 is a ru­ral pro­gram cre­ated by the Pa­tient Pro­tec­tion and Af­ford­able Care Act that in­creased Medi­care pay­ments for hos­pi­tals con­sid­ered to be low-vol­ume and lo­cated at least 15 miles from an­other hospi­tal, Slabach said.

The ru­ral sec­tor’s ad­vo­cacy ef­fort will be fo­cused on the Se­nate side of the aisle, where the ru­ral hospi­tal sec­tor his­tor­i­cally has done well, said David Lee, man­ager of gov­ern­ment af­fairs and pol­icy man­ager for the NRHA. The plan is for the ru­ral Medi­care ex­ten­ders to be at­tached to leg­is­la­tion that pre­vents ex­pected cuts to physi­cian re­im­burse­ment.

The NRHA also would op­pose what ap­pears to be a dif­fer­ence in ru­ral re­im­burse­ment in the new Medi­care In­pa­tient Prospec­tive Pay­ment Sys­tem rule, Slabach said in an e-mail. An ini­tial read of the more than 1,300page doc­u­ment in­di­cates that the rule calls for ru­ral hos­pi­tals on av­er­age to re­ceive a 0.5% cut while hos­pi­tals in large ur­ban ar­eas will re­ceive a 1.2% in­crease on av­er­age and other ur­ban providers will ex­pe­ri­ence a pos­i­tive 0.9% up­date, he said.

Mean­while, crit­i­cal-ac­cess hos­pi­tals, while not gen­er­ally vul­ner­a­ble to the threat of ex­pir­ing Medi­care pro­vi­sions, are in line to re­ceive the se­ques­tra­tion-linked cuts at year-end and have been bandied about in dif­fer­ent pro­pos­als as a pro­gram that is ripe for cut­ting, in­clud­ing one from the Obama ad­min­is­tra­tion. The presi- dent’s pro­posed bud­get for 2013 re­leased in Fe­bru­ary in­cluded the sug­ges­tion to re­duce crit­i­cal-ac­cess hos­pi­tals’ Medi­care re­im­burse­ment to 100% of rea­son­able costs from its cur­rent 101% of costs, and to pro­hibit crit­i­cal-ac­cess hospi­tal des­ig­na­tion for fa­cil­i­ties within 10 miles from the near­est ru­ral hos­pi­tals.

“Our hos­pi­tals are very wor­ried,” said Pat Schou, ex­ec­u­tive di­rec­tor of the not-for­profit Illi­nois Crit­i­cal Ac­cess Hospi­tal Net­work, Prince­ton, Ill., which has about 50 mem­bers in the state. The threat of a se­ques­tra­tion cut is caus­ing CAH hos­pi­tals to try to pre­pare for that 2% drop in Medi­care rev­enue, she said. “The hos­pi­tals have been run­ning their num­bers and mak­ing ad­just­ments and try­ing to plan.”

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