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Medicare payment cuts imperil many rural hospitals

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The Great Plains.

Some 30 rural hospitals in Kansas and Kentucky may close soon because of changing reimbursement procedures and declining populations.

One big challenge has been the effects of the  Medicare Prescription Drug, Improvement, and Modernization Act of 2003, in which critical-access hospitals received 101 percent of reasonable costs.  Since  sequestration — a 2 percent across-the-board cut in Medicare provider payments — took effect in April 2013 such hospitals are receiving 99 percent of their allowable costs.

Jodi Schmidt, president of the National Rural Health Association, elaborated on High Plains Public Radio:

“There are some basic things you would expect to have in a hospital, like television sets and telephones, that Medicare does not consider allowable costs. And then there are a number of physician costs outside of the emergency room and other sorts of operational overhead expense that the government doesn’t consider allowable.”



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