Rural hospitals face funding cliff with $600 million on the road

Rural hospitals that weathered the pandemic are dealing with a funding cliff, in peril of shedding some $600 million in Medicare funding on the finish of this month until Congress intervenes.

Why it issues: With COVID aid now not obtainable, some rural services in components of the nation with older, sicker populations are struggling to remain open and are reducing companies.

Driving the information: The speedy focus is on a pair of Medicare fee packages set to run out on Sept. 30.

  • The Medicare-Dependent and Low Quantity Hospital packages assist fund greater than 700 hospitals in outlying areas, based on Brock Slabach, chief working officer on the Rural Well being Affiliation.
  • The Facilities for Medicare and Medicaid Providers estimates that funds to these hospitals would lower by $600 million if the packages aren’t renewed.
  • Lawmakers led by Reps. Carol Miller (R-W.Va.) and Terri Sewell (D-Ala.) are urgent for a five-year reauthorization, arguing the cuts can be “catastrophic” to small and remoted communities.
  • However any aid measure would seemingly need to hitch a trip on a must-pass invoice, just like the anticipated stopgap funding measure to maintain the federal government operating into the brand new fiscal yr or a year-end spending deal.

Go deeper: The hospitals funded by the packages are sometimes too huge to be categorised as “vital entry hospitals” and qualify for extra favorable Medicare fee insurance policies. They’re additionally too small to profit from Medicare’s potential fee system, which pays fastened quantities for hospital companies.

  • CMS is finalizing a brand new fee mannequin that will encourage small rural services to function 24-hour emergency rooms however supply no different inpatient companies.
  • The plan has drawn criticism for being too inflexible, or an excessive amount of of a chance for services to purchase in. Solely hospitals with fewer than 50 beds qualify.
  • The College of North Carolina Heart for Well being Providers Analysis predicted that simply 68 of the greater than 1,500 hospitals that would convert to this mannequin would choose in.
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What we’re listening to: Some rural services have minimize companies and grappled with destructive margins even earlier than confronting a funding cliff.

  • Monetary losses compelled Ouachita County Medical Heart in southwest Arkansas, to shut certainly one of its rural well being clinics this yr, Peggy Abbott, president of the ability, instructed reporters final week.
  • A hospital a 45-minute drive away closed its obstetrics companies, leaving Ouachita County Medical Heart to take care of a further county’s pregnant sufferers.

The intrigue: The pleas for aid come because the broader hospital trade presses Congress to delay a scheduled 4% Medicare fee minimize attributable to take impact on the finish of the yr.

Our thought bubble: Renewing rural funding packages is the naked minimal ask for services hit more durable by staffing shortages and provide chain issues.

  • However with larger hospital chains seeing enterprise rebound to pre-pandemic ranges, it is unclear how accommodating policymakers can be to the trade.