Low-volume rural hospitals that are not the sole providers in their communities should not be eligible for special payment adjustments from Medicare, Mark Miller executive director of the Medicare Payment Advisory Committee, testified in House Ways and Means Committee’s Health Subcommittee meeting Wednesday.
Thus he reopened the debate about which rural hospitals should receive special federal funds to stay open—and whether some would be better served by finding another lifeline, such as merging with other, larger hospital in their regions.
Modern Healthcare reports that “The CMS in recent years has made a number of Medicare payment adjustments to help rural hospitals improve their operating margins. Those changes have worked. The 860 rural hospitals that are paid on the inpatient prospective payment system have higher Medicare margins than their urban counterparts, Miller said, according to documents posted on the committee’s Web site.
“But not all of these facilities should qualify for the same assistance; special adjustments should be reserved for isolated hospitals, he added. Nine percent of hospitals designated as sole community providers, as well as 16 percent of designated critical-access hospitals, are actually located within 15 miles of another hospital, he said.”’“These providers are not necessary for access, and it may be inappropriate to give a low-volume adjustment to two competing low-volume hospitals that are five or 10 miles from each other,’ Miller said. ‘Such a policy may also encourage two nearby hospitals to merge, increasing patient volumes.”’