On Aug. 15, the Office of the Inspector General for the Department of Health and Human Services (OIG) released a report entitled “Most Critical Access Hospitals Would Not Meet the Location Requirements If Required to Re-Enroll in Medicare.”
If the recommendations in the report were carried out, it could cause nearly two-thirds of the approximately 1,300 critical access hospitals (CAH), like Sleepy Eye Medical Center (SEMC), to lose their CAH status due to their locations with respect to other hospitals.
“The gist of the report is not to be taken lightly,” explained SEMC Administrator Kevin Sellheim. “However, it doesn’t mean that we close–it means that we could potentially have to redesign how we offer services.”
According to Sellheim, CAH status was created to ensure access to hospital services for beneficiaries in rural areas that are typically underserved for health care services. The Medicare program, in turn, reimburses CAHs at cost instead of under the prospective payment systems for ordinary acute care hospitals.
To be designated as a CAH, a hospital must meet multiple conditions of participation, which includes being located in a rural area and be designated as a Necessary Provider.
The report also estimated that the Centers for Medicare and Medicade Services (CMS) could save over $450 million in 2011, if it decertified CAHs that are located 15 miles from the nearest hospital.
“It is questionable what real savings would be realized by eliminating CAHs,” Sellheim said. “Eliminating access to health care in rural communities would strain other facilities that have to service patients. In some cases patients may delay care due to reduced access to healthcare facilities and ultimately cost the system more to treat as their health conditions go unchecked.”
Congressional proponents of the report maintain that these hospitals provide important jobs in rural areas and benefit other local healthcare providers.
Additionally, the CAH program was never designed as a cost saving program, but instead was created to preserve access to health care for rural populations living in medically underserved areas.
Sellheim added what the OIG report does not compare is CAH costs with hospitals that are not CAHs, nor does it consider other costs associated with hospital closures, such as increased travel costs for patients and lost jobs.
A typical CAH has 141 employees and generates $6.8 million in wages. For every job at a CAH, these hospitals create an additional .38 jobs in their communities–generating an added $1.6 million in economic impact.
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“One thing to keep in mind is that this report doesn’t address all of the things that could potentially happen if rural hospitals were forced eventually to close,” Sellheim said. “We will continue to work with our congressional representatives to ensure our message is heard in Washington so that healthcare services in rural communities such as ours are preserved.”