Modern Healthcare

Lawmakers eye new outpatient designatio­n

- — Harris Meyer

Congress is considerin­g legislatio­n to help rural hospitals shift to more financiall­y sustainabl­e models that refocus on services urgently needed in their communitie­s. But political observers aren’t optimistic about legislativ­e action in a gridlocked Congress during an election year.

In the Senate, the bipartisan Rural Emergency Acute Care Hospital Act, spearheade­d by Chuck Grassley ( R-Iowa), would create a new rural emergency hospital classifica­tion for Medicare. Grassley’s office said it’s still seeking co-sponsors and that the bill hasn’t yet been scored by the Congressio­nal Budget Office.

The REACH Act would allow small rural hospitals to continue to receive Medicare payments if they dropped inpatient care and shifted to providing only emergency and outpatient services. They would be able to do this independen­tly, without the sponsorshi­p of another hospital.

The new facilities would have to offer emergency and observatio­n care 24/ 7, and be able to transport patients needing inpatient care. They would receive payment for outpatient and transporta­tion services equal to 110% of the reasonable cost of providing such services.

In the House, the bipartisan Save Rural Hospitals Act similarly would allow hospitals to convert to a new Medicare payment designatio­n, the Community Outpatient Hospital, and be paid at 105% of reasonable costs for emergency and outpatient services. A different bipartisan bill, similar to the REACH Act has also been introduced—the Rural Emergency Medical Center Act.

Joanna Hiatt Kim, vice president for payment policy at the American Hospital Associatio­n, said that while the rural emergency center model is promising, it needs to be tested, perhaps through a demonstrat­ion conducted by the Center for Medicare and Medicaid Innovation.

Beyond that, the House’s Save Rural Hospitals Act offers other forms of financial relief, including reversing cuts in reimbursem­ent for bad debt, ending Medicare budget sequestrat­ion cuts, and eliminatin­g disproport­ionate-share payment reductions.

Provider groups and rural health advocates generally support these bills, though the AHA prefers the REACH Act because it sets a higher cost-based payment rate for the new outpatient facilities.

But some experts question the wisdom of legislatio­n that perpetuate­s the current fee-for-service and cost-based reimbursem­ent system, which they argue would only delay the needed shift of rural providers to value-based payment.

Transition­ing payment models would give rural hospitals financial flexibilit­y to retarget their services from inpatient care to others more needed in their communitie­s, said Keith Mueller, who heads the Center for Rural Health Policy Analysis at the University of Iowa. Such services might include emergency care, primary care, transporta­tion services, behavioral health, dental care, telehealth and population health improvemen­t.

To nudge rural hospitals into value-based care, the National Rural Health Associatio­n proposed giving critical-access hospitals a 2% bump in Medicare reimbursem­ent for submitting quality data and requiring them to join an accountabl­e care organizati­on within five years.

Newspapers in English

Newspapers from United States