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Complaints from rural hospitals; Ariz. facility to shut


Officials of rural hospitals have denounced at a congressional hearing  the  “96-hour rule” rule, which requires physicians at critical-access hospitals to certify that Medicare and Medicaid patients may reasonably expect to be discharged or transferred to another hospital within 96 hours of admission. They also dislike a new proposed direct-supervision policy.

Dr. Daniel Derksen, director of the Arizona Center for Rural Health, told the House Ways and Means Committee’s Health Subcommittee that physicians  might  need to change patients’ treatment after lab testing, and that can change their estimated length of stay.

And it was argued that  critical-access hospitals should continue to be exempt from a policy that requires supervising clinicians to be physically on-site when Medicare patients  are receiving outpatient therapeutic services, such as infusions or vaccinations. Given the remoteness of some rural hospitals, officials argued, it’s not always possible to have  supervising clinicians present.
Further, the panel was told that graduate medical-education slots need to be more fairly allocated to help rural areas recruit providers.

Hospitals boost construction


Construction work at Massachusetts General Hospital.

Modern Healthcare reports on what might surprise some folks given the challenges facing hospitals — a upsurge in building.

“Most of the focus has been on outpatient services as healthcare increasingly shifts to lower-cost-care settings. Health systems and hospital chains also are opening freestanding emergency departments to bring in additional volume. But even on the inpatient side, there’s a greater emphasis on service line planning as hospitals seek to become more competitive in high-margin specialties.”

“I’m not aware of any market where there’s not activity,” Dick Miller, president of Earl Swensson Associates, a Nashville-based architecture firm, told Modern Healthcare “It’s definitely picking up. There’s a lot of activity and a lot of it’s focused on outpatient” and specialty services.

There are signs that the Supreme Court’s 6-3 decision on Affordable Care Act subsidies  has accelerated building plans by removing a lot of uncertainty about future federal funds being available for hospitals through the ACA’s Medicaid expansion.
Projects, of course,  depend on local needs.” For instance, said  the publication,  “Rural hospitals, which serve an aging population, are adding skilled nursing and geri-pysch facilities, he said. In the suburbs, there’s demand for freestanding emergency departments to serve patients who don’t want to make the trek into the city for urgent care.”

Medicare payment cuts imperil many rural hospitals



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.”



Rural hospitals’ lucrative rehab business


The Associated Press reports that federal investigators have found that a law lets rural hospitals bill Medicare for rehabilitation services for seniors at higher rates than nursing homes and other facilities and cost billions of dollars in extra government spending.

Yet more reasons why Medicare spending is out of control.

Most patients could have been moved to a skilled-nursing facility within 35 miles of the hospital at about one-fourth the cost, the U.S. Department of Health and Human Services’ inspector general said.

The AP reported that hospitals ”juggling tough balance sheets have come to view such ‘swing-bed’ patients as lucrative, fueling a steady rise in the number of people getting such care and costing Medicare an additional $4.1 billion over six years.”

”Legislation passed by Congress in 1997 created the designation of ‘critical-access hospitals’ to help small facilities in remote areas survive. Rather than paying set rates for services as throughout the rest of the Medicare system, the federal government reimburses the hospitals for 101 percent of their costs. They also often receive state funding and grants.”

Congress, as now, was controlled by Republicans in 1997. Many represent rural areas in the South and West with many such “critical-access hospitals.”

The AP said that Alan Morgan,  chief executive of the National Rural Health Association, agreed  that Medicare could save money by modifying the system. But he told the AP that  dozens of rural hospitals have closed in the past five years, and nearly 300 others are very financially fragile. The Obama administration has already proposed  cutting all reimbursements  to critical-access hospitals, which  Morgan said would further accelerate the closures.

”Some hospitals received critical access designation under old rules and were grandfathered in. A previous report from the inspector general’s office found the vast majority would not meet the requirements if forced to requalify,” the news service reported.



How can small hospitals stay independent?




In this era of  hospital partnering and consolidation, is there an argument for smaller and rural hospitals to go it alone and remain independent?

Or, as this article  by Beth A. Nelson,  a consultant in the healthcare practice of the executive-search firm Witt/Kieffer,  in Hospitals & Health Networks, asks: “If not, is there a degree of creative partnering that affords local facilities independence and control, yet also access to broader services and lower costs?”

In talking with chief executives at some independent hospitals, she found various strategies for keeping as much independence as possible and the rationales for doing so.

Tim Putnam, president and CEO of Margaret Mary Health, a critical access hospital in Batesville, Ind., noted the central civic threat involved in small and rural hospitals being gobbled up by systems:

“When independent hospitals join larger systems, the mission to the local community first and foremost goes away”.

John Solheim, CEO of Cuyuna Regional Medical Center,  in Crosby, Minn.,  told her that independent hospitals tend to be nimble and can adapt easily to local needs, something that’s difficult  with a big system.

Steven Long, FACHE, president and CEO of Hancock Regional Hospital, in Greenfield, Ind., said that citizens look at the local hospital as ”their hospital and maintain a strong sense of ownership and commitment to it,” H&HN said.

Still,  the decision whether to remain independent ”usually comes down to finances,”  the article noted. {In place of “usually” we’d use the words “virtually always”.}

In any event,  the article says, ”The trick to staying local and ‘going it alone’ is often through configuring creative but limited partnerships with larger systems.”







Rural hospitals push innovation


Read/hear/see how  some rural hospitals are adapting to healthcare reform and new reimbursement/risk models with innovation — and how their states are pushing risk-based reforms.

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