The Solution to the Rural Hospital Closure Crisis

By Diane Calmus, JD
Original story posted on: September 16, 2015

Fifty-six rural hospitals have closed since 2010, and 283 rural hospitals are on the brink of closure. 

Since January 2013, more rural hospitals have closed than in the previous 10 years combined, and the rate at which hospitals are closing is increasing.

The Save Rural Hospitals Act, H.R. 3225, recently introduced by U.S. Rep. Sam Graves (R-Mo.) and Rep. Dave Loebsack (D-Iowa), will stop the flood of rural hospital closures, provide needed access to care for rural Americans, and create an innovative delivery model that will ensure emergency access to care for rural patients across the nation. 

Rural healthcare delivery is challenging. Workforce shortages, older and poorer patient populations, geographic barriers, low patient volumes, and large uninsured and under-insured populations are just a few of the barriers. Rural physicians and hospitals work around many of these barriers to provide high-quality personalized care to their communities. 

The Save Rural Hospitals Act protects all rural hospitals, not just those about to close their doors or choosing to convert to a new delivery model. All rural hospitals face decreasing reimbursements from continued cuts in hospital payments. 

To stabilize rural hospitals, the Save Rural Hospitals Act reverses the multitude of cuts that have hit rural hospitals so hard. This includes eliminating Medicare sequestration for rural hospitals; reversing “bad debt” reimbursement cuts (established in the Middle Class Tax Relief and Job Creation Act of 2012); reinstating sole community hospital “hold harmless” payments; eliminating Medicare and Medicaid DSH reductions; permanently extending current low-volume and Medicare-dependent hospital payment levels and rural ambulance and super-rural ambulance payment; extending Medicaid primary care payments for rural hospitals; and providing relief from impending meaningful use penalties.

The bipartisan bill also addresses the harmful regulatory burdens, calling for the elimination of the critical access hospital (CAH) 96-hour condition of payment, the rebase of supervision requirements for outpatient therapy services at CAHs and rural PPS facilities, and modification to the two-midnight rule and RAC audit and appeals processes to relieve burdens placed unfairly on small, rural hospitals and providers.

The 96-hour condition of payment requires physicians at CAHs certify, at the time of admission, that a Medicare patient will not be at the facility for more than 96 hours. From the creation of the CAH designation until late 2013, an annual average of 96-hour stays allowed CAHs flexibility within the regulatory framework set up for the designation. The new policy of strict enforcement of a per-stay, 96-hour cap creates unnecessary red tape and barriers for CAHs throughout rural America. Removing the 96-hour rule would allow for rural patients to receive the care they need in their local communities. Additionally, since it is 2.5 percent less expensive to provide identical Medicare services in a rural setting than in an urban or suburban setting, such a transfer would result in greater Medicare expenditures. 

The legislation also provides vital relief to rural hospitals by eliminating CMS’s rule strictly requiring direct supervision of outpatient therapeutic services. The enforcement of this rule would cause rural facilities to reduce therapy services, threatening access to needed procedures for rural Americans. The bill protects hospitals that are providing quality, responsible care to rural Americans. 

The bill also includes additional grant funds for rural providers, including rural EMS, hospital-based grants to assist rural hospitals with the change to value-based payment models, and grants for population health initiatives. 

In addition to serving to create a new provider model designed to ensure continued access to emergency care across rural America, the Save Rural Hospitals Act is a comprehensive solution protecting all rural hospitals. NRHA understands that a new model alone isn’t enough and applauds Congressmen Graves and Loebsack for their dedication to saving rural Americans’ access to care.

Without congressional intervention, more rural communities across America will see healthcare services cut, layoffs, reduced wages, economic losses, or worse, empty hospitals that no longer provide necessary services to their communities. 

About the Author 

Diane joined the NRHA staff in 2015. She is one of NRHA’s federally registered lobbyists. She previously worked as a legislative assistant to Rep. Kevin Brady, the chair of the Ways and Means Health Subcommittee, where she handled a variety of health care issues with a focus on Medicare policy. She also worked as a health policy fellow at the Heritage Foundation. Diane earned a J.D. from Michigan State University College of Law and bachelor’s degrees in mechanical engineering from Lake Superior State University and psychology from Central Michigan University.

Contact the Author 

dcalmus@NRHArural.org

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