by
Loren Bonner, DOTmed News Online Editor | September 25, 2012
From the September 2012 issue of HealthCare Business News magazine
In early August, NRHA organized a march on Washington to pressure Congress to spare two particular Medicare extenders, which are set to expire Oct. 1. They include the Medicare dependent hospital designation and the low-volume hospital adjuster, both created in the 1980s to help cover the costs for low-volume rural hospitals that primarily treat Medicare beneficiaries.
But times have changed, as have members of Congress. Many longtime supporters of the supplemental payments have been replaced, especially in the House of Representatives, with members who are more focused on fixing the deficit, according to hospital advocates. And many of these new members are pushing for assessments of the benefits of each extender.
For example, a bill introduced in the House by U.S. Rep. Tom Reed, R-New York, in June, supports Medicare extenders, but requires the Government Accountability Office to conduct a study on the financial impact of federal rural health funding programs.
A march for rural hospitals
event this summer in
Washington, D.C.
Kidder points out that these programs do not, in fact, cost the Medicare program more money. In April, NRHA analyzed CMS sharedsavings program data and found that Medicare spent 3.7 percent less per rural Medicare beneficiary than for care provided in other areas.
“What we really have at the end of the year is an opportunity to influence Congress to extend these programs an additional one year,” says Kidder.
Other Medicare extenders are up for grabs, as are the two percent Medicare sequestration cuts in January and a decrease in the bad debt reimbursement from 70 percent to 65 percent.
A hard time fitting in
New Medicare payment models under health care reform propose to financially support rural and urban hospitals alike. But rural providers will have a hard time fitting into new, more collaborative models of care, specifically Accountable Care Organizations (ACOs), according to Morgan.
ACOs encourage providers to hold joint responsibility for the health of a patient, giving them financial incentives to cooperate and save money. Providers that achieve this, while also meeting quality targets, are able to keep a share of the savings. But if an ACO is not able to save money, it might have to pay a penalty or eat the costs of investments made to improve care. When the Obama administration originally released its proposed rule on ACOs, rural providers weren’t happy. Complaints about the costs of establishing an ACO led to a concession from the administration to allow rural providers to apply and receive advanced payments in order to help them build the infrastructure for coordinated care.
