MEDICARE: Rural Hospitals `Big Winners’ with 1% Increase
Rural hospitals will see Medicare inpatient prospective payment rates rise 1% under a federal rule to be implemented Oct. 1 -- partly countering the Balanced Budget Act's negative effect on rural providers, this week's Modern Healthcare reports. The 158 providers designated as "sole community" or disproportionate share hospitals will see even higher rate increases of 2.1%. The rural rate increases stem from "[d]ecisions to equalize reimbursement between some rural hospitals and nearby urban hospitals," which will instead see rate decreases. Payments to the 242 teaching hospitals with more than 100 residents will drop 1.5%, for example, and a HCFA analysis of the rule predicts that overall, "per-case payments to hospitals will drop to $6,747 from $6,779" (Gardner, 8/9 issue).
Despite the prospective patient system windfall, rural hospitals continue to push for relief from the Balanced Budget Act. In Montana, the Billings Gazette reports that Medicare cuts have "had dramatic and detrimental effects on health care" in a state where half of the counties have no obstetric care, nine have no physicians and four "have no health care provider whatsoever." At a meeting Tuesday with Sen. Max Baucus (D-MT) and Dr. Margaret Cary, the regional HHS administrator, and several hospital administrators said further cutbacks could force their institutions to close (Kolman, 8/11). Meanwhile, construction on the new Montana State Hospital, a $26 million psychiatric facility scheduled to open Jan. 1, is six months behind schedule, a delay that costs the state $110,000 every month and "poses peril for the hospital's budget" (Billings Gazette, 8/11).
Too Much Cheese Makes You Sick
Rural health care "quickly becomes a non-partisan issue for those elected from areas such as western Wisconsin," Reps. Jim Nussle (R-IA) and Ron Kind (D-WI) told attendees at a Dubuque luncheon hosted by the Tri-State Health Care Coalition. Nussle, the chair of the 160-member House Rural Health Coalition, said, "Rural health care is very personal to those of us from this part of the country. A Republican and a Democrat are with you today, and we totally agree on rural health care issues." The coalition supports a national health insurance premium rate that reflects nationwide average costs, equal access to health-care services for rural residents, abandoning "one-size-fits-all" policy making, and repealing portions of the Balanced Budget Act of 1997, which has been particularly hard on rural providers, Nussle said. He urged Iowans to use this weekend's straw poll as a forum to discuss rural health care with presidential candidates. "If you don't ask candidates how they are going to address rural care, you will have let a tremendous opportunity go by," he said (Bragg, Dubuque Telegraph-Herald, 8/11).
West Virginia, Too
Hospitals are also "slicing services" in West Virginia, where the BBA is expected to reduce federal reimbursements by $550 million, according to West Virginia Hospital Association President Steven Summer. Long term care services such as home health and skilled nursing have been particularly hard hit: In Raleigh County, for example, the number of home health agencies has dropped from 13 to two. "The irony is, these services focus on the elderly, the segment of West Virginia's population that is growing," the Charleston Daily Mail reports. Hospital administrators predict that outpatient care will be next on the chopping block (Cox, 8/11).