CMS throws lifeline to 13 rural hospitals with enhanced reimbursement

For Corey Lively, CEO of Great Plains Regional Medical Center in Oklahoma, being selected for a rural hospital demonstration project is a godsend.

With commercial reimbursement rates plummeting and Medicare and Medicaid continually underpaying for services, Lively was considering scaling back service lines, including cancer treatments, at the 50-bed hospital.

But last week, the CMS admitted Great Plains, along with 12 other hospitals, to the Rural Community Hospital Demonstration Program, which reimburses hospitals for the actual cost of care for inpatient services provided to Medicare beneficiaries rather than standard Medicare rates. Medicare typically pays as little as 80% of inpatient services costs.

The demonstration “allows us to maintain a higher level of services that if we didn’t provide, some would have to travel 110 to 130 miles to receive,” Lively said.

The program started in

2014 and was extended last year under the 21st Century Cures Act for another five years. The new participating hospitals join 17 that were already in the program.

Eligible hospitals have to be located in a rural area, have fewer than 51 acutecare beds, provide 24-hour emergency services and not be designated as a critical-access hospital.

The program expansion comes as Medicare margins are in free fall (See related story, p. 18). In 2015, the aggregate margin hit negative 7.1% across hospitals according to the Medicare Payment Advisory Commission, and it was expected to hit negative 10% this year.

The additional funds drawn through the demonstration have helped Columbus Community Hospital in Nebraska, which has been in the program since the start, keep up with rising costs of technology and medical equipment, according to its CEO, Mike Hansen.

It has also given the hospital the funds necessary to attract new staff. Over the past few years, 120 clinicians, physician assistants, nurses and others have been hired.

“It’s difficult to recruit to small rural towns, but the demonstration has cer- tainly been key in helping to allow us do that,” Hansen said.

Jason Cleckler, CEO of Delta County Memorial Hospital in Colorado, which garnered $800,000 from the program, agreed that the money is key to efforts to recruit and retain staffers. “This program is really important for rural hospitals that are facing difficult challenges when it comes to reimbursement and payer

● mix,” Cleckler said.