From the National Rural Health Association:
Today President Obama called for $6 billion in cuts over 10 years to rural hospitals, claiming that the proposal eliminates “higher than necessary reimbursement.”
Higher than necessary reimbursement? Currently, 41 percent of small rural hospitals, known as critical access hospitals (CAHs), operate at a financial loss. If the President’s proposal to cut billions in Medicare reimbursements hits these facilities, over half of CAHs would lose money. Such devastating cuts will cause rural hospital doors to close, resulting in loss of access to health care and needed rural jobs.
CAHs account for only 5 percent of Medicare hospital inpatient expenditures, yet they provide critical care and jobs – it’s a sound investment not a “higher than necessary reimbursement.”
The President’s proposal included changes to the following:
- Reduce bad debt payments to 25 percent, down from the current 70 percent, for eligible providers. This would save $20 billion over 10 years.
- Beginning in 2013, reduce the IME adjustment by 10 percent, saving $9 billion over 10 years.
- FY 2013, end add-on payments for physicians and hospitals in frontier states.
- Reduce CAH reimbursement to 100 percent of cost, down from the current 101 percent.
- End CAH reimbursement for facilities located 10 miles or less from another hospital.
- Strengthen the Independent Payment Advisory Board with more aggressive goals and additional enforcement tools.
- Limit the use of provider taxes beginning in FY 2015, but not eliminate them entirely. Congress created the special designation of a CAH in 1997 to prevent a flood of rural hospitals closures in the 1980s and 1990s. The CAH program is a safety net program that is working. Despite so many struggling financially, many rural hospitals doors are able to stay open solely because of the CAH program. These hospitals provide vital care for the millions of our nation’s most vulnerable citizens – rural seniors who are on average, poorer and sicker than urban or suburban seniors.
Rural economies depend on rural hospitals for jobs, economic growth and revenue production. Rural hospitals are often the largest or second largest employer in rural America. The average CAH supports more than 100 jobs and provides $5 million in wages, salaries and benefits to the local community.