HHS OIG: Most Critical Access Hospitals Not Meeting Current Criteria
Nearly two-thirds of critical access hospitals would not meet current standards if required to reapply for certification, according to an HHS Office of Inspector General report released Thursday, Kaiser Health News' "Capsules" reports.
Background on Critical Access Hospitals
By definition, a critical access hospital must have 25 or fewer beds and must be located at least 35 miles from another facility in communities that would otherwise lack adequate access to health care services (Gold, "Capsules," Kaiser Health News, 8/15). These facilities receive Medicare reimbursements at a rate of 101%, while traditional hospitals are reimbursed 93% (Carlson, Modern Healthcare, 8/15).
Until 2006, states were allowed to bypass distance requirements and could define certain hospitals as "necessary providers," even if they were in close proximity to other facilities. Although Congress got rid of this loophole in 2006, hospitals that already had received an exemption were not forced to be recertified ("Capsules," Kaiser Health News, 8/15).
Report Details, Findings
For the report, OIG looked at more than 1,300 critical access hospitals and discovered that 846 were located fewer than 35 miles from another hospital, while 71 were fewer than 10 miles from another facility (Modern Healthcare, 8/15).
The report called on CMS to look at all of the hospitals currently enrolled in the program to ensure facilities that retain their certifications "are those that continue to serve the beneficiaries who would otherwise be unable to reasonably access hospital services" ("Capsules," Kaiser Health News, 8/15).
It also recommended that CMS seek legislative authority from Congress to remove the permanent exemption from all necessary provider facilities (Bunis, CQ HealthBeat, 8/15).
The report found that 88% of the hospitals certified under the 2006 requirements would lose their critical access status if distance rules were applied uniformly. According to Modern Healthcare, losing the additional Medicare payments that come with being a CAH facility could result in the closure of hundreds of facilities (Modern Healthcare, 8/15).
However, the report found that the extra payments to CAH hospitals cost an extra $860,000 per facility, per year. In all, forcing such hospitals to reapply could save the government $1.1 billion annually, the report estimates ("Capsules," Kaiser Health News, 8/15).
Groups Criticize Report
American Hospital Association Vice President for Payment Policy Joanne Hiatt Kim said, "The OIG's recommendation that CMS seek legislative authority to remove and reevaluate certain CAH's special Medicare status is completely inappropriate." She added that the initiative "demonstrates an unfortunate understanding of how health care is delivered in rural America" (CQ HealthBeat, 8/15).
Alan Morgan -- CEO of the National Rural Health Association -- said that cutting off the additional Medicare funding to certain CAHs "would effectively kill rural health care." He said there is a "larger issue" that needs to be discussed, including where a patient seeks treatment if they cannot access a rural hospital (Modern Healthcare, 8/15).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.