A Sense of Alarm as Rural Hospitals Keep Closing

The potential health and economic consequences of a trend associated with states that have turned down Medicaid expansion.

Hospitals are often thought of as the hubs of our health care system. But hospital closings are rising, particularly in some communities.

“Options are dwindling for many rural families, and remote communities are hardest hit,” said Katy Kozhimannil, an associate professor and health researcher at the University of Minnesota.

Beyond the potential health consequences for the people living nearby, hospital closings can exact an economic toll, and are associated with some states’ decisions not to expand Medicaid as part of the Affordable Care Act.

Since 2010, nearly 90 rural hospitals have shut their doors. By one estimate, hundreds of other rural hospitals are at risk of doing so.

In its June report to Congress, the Medicare Payment Advisory Commission found that of the 67 rural hospitals that closed since 2013, about one-third were more than 20 miles from the next closest hospital.

study published last year in Health Affairs by researchers from the University of Minnesota found that over half of rural counties now lack obstetric services. Another study, published in Health Services Research, showed that such closures increase the distance pregnant women must travel for delivery.

And another published earlier this year in JAMA found that higher-risk, preterm births are more likely in counties without obstetric units. (Some hospitals close obstetric units without closing the entire hospital.)

Ms. Kozhimannil, a co-author of all three studies, said, “What’s left are maternity care deserts in some of the most vulnerable communities, putting pregnant women and their babies at risk.

In July, after The New York Times wrote about the struggles of rural hospitals, some doctors responded by noting that rising malpractice premiums had made it, as one put it, “economically infeasible nowadays to practice obstetrics in rural areas.”

Many other types of specialists tend to cluster around hospitals. When a hospital leaves a community, so can many of those specialists. Care for mental health and substance use are among those most likely to be in short supply after rural hospital closures.

The closure of trauma centers has also accelerated since 2001, and disproportionately in rural areas, according to a study in Health Affairs. The resulting increased travel time for trauma cases heightens the risk of adverse outcomes, including death.

Another study found that greater travel time to hospitals is associated with higher mortality rates for coronary artery bypass graft patients.

In many communities, hospitals are among the largest employers. They also draw other businesses to an area, including those within health care and others that support it (like laundry and food services, or construction).

A study in Health Services Research found that when a community loses its only hospital, per capita income falls by about 4 percent, and the unemployment increases by 1.6 percentage points.

Not all closures are problematic. Some are in areas with sufficient hospital capacity. Moreover, in many cases hospitals that close offer relatively poorer quality care than nearby ones that remain open. This forces patients into higher-quality facilities and may offset negative effects associated with the additional distance they must travel.

Perhaps for these reasons, one study published in Health Affairs found no effect of hospital closures on mortality for Medicare patients. Because it focused on older patients, the study may have missed adverse effects on those younger than 65. Nevertheless, the study found that hospital closings were associated with reduced readmission rates, which is regarded as a sign of increased quality. So it seems consolidating services at larger hospitals can sometimes help, not harm, patients.

“There are real trade-offs between consolidating expertise at larger centers versus maintaining access in local communities,” said Karen Joynt Maddox, a cardiologist and health researcher with the Washington University School of Medicine in St. Louis and an author of the study. “The problem is that we don’t have a systematic approach to determine which services are critical to provide locally, and which are best kept at referral centers.”

Many factors can underlie the financial decision to close a hospital. Rural populations are shrinking, and the trend of hospital mergers and acquisitions can contribute to closures as services are consolidated.

Another factor: Over the long term, we are using less hospital care as more services are shifted to outpatient settings and as inpatient care is performed more rapidly. In 1960, an average appendectomy required over six days in the hospital; today one to two days is the norm.

Part of the story is political: the decision by many red states not to take advantage of federal funding to expand Medicaid as part of the Affordable Care Act. Some states cited fiscal concerns for their decisions, but ideological opposition to Obamacare was another factor.

In rural areas, lower incomes and higher rates of uninsured people contribute to higher levels of uncompensated hospital care — meaning many people are unable to pay their hospital bills. Uncompensated care became less of a problem in hospitals in states that expanded Medicaid.

In a Commonwealth Fund Issue Brief, researchers from Northwestern Kellogg School of Management found that hospitals in Medicaid expansion states saved $6.2 billion in uncompensated care, with the largest reductions in states with the highest proportion of low-income and uninsured patients. Consistent with these findings, the vast majority of recent hospital closings have been in states that have not expanded Medicaid.

In every year since 2011, more hospitals have closed than opened. In 2016, for example, 21 hospitals closed, 15 of them in rural communities. This month, another rural hospital in Kansas announced it was closing, and next week people in Kansas, and in some other states, will vote in elections that could decide whether Medicaid is expanded.

Richard Lindrooth, a professor at the University of Colorado School of Public Health, led a study in Health Affairs on the relationship between Medicaid expansion and hospitals’ financial health. Hospitals in nonexpansion states took a financial hit and were far more likely to close. In the continuing battle within some states about whether or not to expand Medicaid, “hospitals’ futures hang in the balance,” he said.

 

 

GAO: rural hospital closures increasing, South hardest hit

https://www.healthcaredive.com/news/gao-rural-hospital-closures-increasing-south-hardest-hit/538604/

Dive Brief:

  • Hospitals across the U.S. are being battered by financial headwinds, and rural hospitals are vulnerable because they don’t have capital or diversified services to fall back on when the going gets rough. Between 2013 and 2017, 64 rural hospitals closed due to financial distress and changing healthcare dynamics, more than twice the number in the previous five years, a new Government Accountability Office analysis shows.  
  • Rural hospital closures disproportionately occurred in the South, among for-profit hospitals and among organizations with a Medicare-dependent hospital payment designation.
  • One potential lifeline was Medicaid expansion. According to GAO, just 17% of rural hospital closures occurred in states that had expanded Medicaid as of April 2018.

Dive Insight:

Declining inpatient admissions and reimbursement cuts have taken a toll on rural hospitals. Since 2010, 86 rural hospitals have closed, and 44% of those remaining are operating at a loss — up from 40% in 2017.

CMS Administrator Seema Verma released a rural health strategy in May aimed at improving access and quality of care in rural communities. Among its objectives are expanding telemedicine, empowering patients in rural areas to take responsibility for their health and leveraging partnerships to advance rural health goals.

The agency also expanded its Rural Community Hospital Demonstration from 17 to 30 hospitals. The program reimburses hospitals for the actual cost of inpatient services rather than standard Medicare rate, which could be as little as 80% of actual cost.

Such initiatives can be helpful, but if a hospital can’t make ends meet on its Medicare and Medicaid businesses and has only a modicum of privately insured patients, “that’s just not a balance that works financially,” Diane Calmus, government affairs and policy manager at the National Rural Health Association, told Healthcare Dive recently.

In all, 49 rural hospitals closed in the South, or 77% of rural hospital closures from 2013 through 2017, according to GAO. Texas had the most closures with 14, followed by Tennessee with eight and Georgia and Mississippi, each with five. By contrast, there were eight rural hospital closures in the Midwest and four each in the West and Northeast.

GAO also looked at closures by Medicare rural hospital payment designation. Critical access hospitals made up 36% of rural hospital closures, 30% were hospitals receiving Medicare standard inpatient payment, 25% had Medicare-dependent hospital designation and 9% were sole community hospitals.

To aid rural hospitals and ensure access for patients, NRHA has urged CMS to adopt a common sense approach to the “exclusive use” standard and lobbied lawmakers to pass legislation eliminating the 96-hour condition of payment requirement, two policies that are particularly hard on rural providers.

Another bill, the Save Rural Hospitals Act, would reverse reimbursement cuts to rural hospitals, provide other regulatory relief and establish the community outpatient hospital, a new provider type offering 24/7 emergency services plus outpatient and primary care.

 

 

 

 

 

The health of 44M seniors is jeopardized by cuts to Medicare lab services

https://www.acla.com/pama/?utm_source=axios-site-ad&utm_medium=ad&utm_campaign=axios-sponsorship

Image result for medicare lab cuts

The Protecting Access to Medicare Act (PAMA)

Congress passed the Protecting Access to Medicare Act (PAMA) in 2014 to help safeguard Medicare beneficiaries’ access to needed health services, including laboratory tests. Unfortunately, the U.S. Department of Health and Human Services (HHS) has taken a flawed and misguided approach to PAMA implementation. As a result of the Department’s actions, seniors will face an estimated $670 million in cuts to critical lab services this year alone, leaving the health of 57 million Medicare beneficiaries hanging in the balance.

PAMA cuts will be particularly burdensome to the most vulnerable seniors, such as those in skilled nursing facilities, those managing chronic conditions, and seniors living in medically underserved communities. The American Clinical Laboratory Association has raised significant concerns about the impact of Medicare lab cuts on seniors and their access to lifesaving diagnostics and lab services.

Learn more about the harm posed by these cuts on seniors here. Read the lawsuit ACLA has filed against HHS here.

WHAT’S AT STAKE


In 2016, seniors enrolled in Medicare received an average of

16 individual lab tests per year

Test tubes

People

80% of seniors

have at least one chronic disease and 77% have at least two—successful disease monitoring and management requires reliable access to routine testing

House

1 million

seniors are living in assisted living or skilled nursing homes

Hands

3.5 million

homebound seniors
rely on skilled home health care services

Map pin

An estimated

10 million

seniors live in rural areas

LACK OF ACCESS TO LAB TESTS

can result in undiagnosed conditions, lack of treatment for sick patients, and the failure to monitor and treat chronic conditions before they become worse—
resulting in a decline in overall health and longevity.

The PAMA cuts will also have a broad impact on laboratories across the country. Those that will face the brunt of the cuts are the very labs and providers that are uniquely positioned to provide services—like house-calls, 24-hour emergency STAT testing, and in-facility services at skilled nursing facilities—that are particularly important to seniors who are more likely to be homebound, managing multiple chronic conditions, or living in rural areas that are medically underserved.

 

 

 

 

 

Trying to Survive: Community Responses to Uncertainties About Federal Funding for Medicaid and Public Health Programs

https://www.commonwealthfund.org/blog/2018/community-responses-federal-funding?omnicid=EALERT1457501&mid=henrykotula@yahoo.com

Mother and baby at a Federally Qualified Health Center

“We are just trying to survive.”

So says the director of an Ohio federally qualified health center (FQHC) that, like many such clinics nationwide, struggles to meet the demand for a wide range of services, from prenatal and other preventive care to addiction treatment and oral health care.

Along with community hospitals and public health departments, FQHCs — critical providers of health services in many low-income communities — are funded through state and local taxes, federal and state government programs, and private philanthropy. But some FQHCs are experiencing shortfalls in trying to meet their clients’ needs. Threats from Congress to reduce federal Medicaid funding, scale back Medicaid expansion, and decrease funding for public health programs have further compounded the financial uncertainties.

To learn how funding shortfalls are being experienced on the ground, my colleagues and I spoke with hospital administrators, chiefs of emergency departments, directors of county public health departments, and heads of FQHCs and behavioral health clinics. We also interviewed community leaders connected to businesses, law enforcement, local media, religious organizations, and political groups in eight North Carolina, Ohio, Pennsylvania, and Wisconsin counties.

Local Health Funding Inadequate

Nearly all of these community leaders described increasing access to health care as just one of three priorities for their communities. Improving local schools and attracting businesses with good-paying jobs are the other top concerns. As one school superintendent said, “We need to focus on all of these if we are to attract employers and people and remain a desirable place to live.”

But local health needs keep growing. The list is daunting: the decontamination of public water supplies; prenatal and infant care; immunizations; reductions in smoking and obesity; better nutrition; dental care for children and adults; and addressing mental illness, suicide risks, and substance use disorders. “We don’t have the capacity to deal with all who [need help],” says a Wisconsin county public health director. “We need to build infrastructure” — clinics and treatment centers — “and provider network capacity.”

Health departments and community clinics report that local funding has been inadequate for some time. As state and county governments have resisted raising taxes and increasing funds for public health needs and community clinics, grants from local organizations and foundations have helped fill the breach. But private philanthropy only goes so far. “Local foundations do not want to fund long-term staff needs,” one public health director said.

Medicaid Funding Is Critical for FQHCs and Emergency Departments

Threats to Medicaid funding have community providers worried. Medicaid generally provides about half the revenues for FQHCs, enabling them to provide care to all, regardless of ability to pay. FQHC directors fear that changes to eligibility — including requirements that beneficiaries work or volunteer, as proposed under various waivers — could mean that some patients will lose coverage, along with their access to counseling and medications for mental illness or chronic conditions like diabetes. Medicaid cutbacks also could make it harder for FQHCs to find specialists willing to see their uninsured or underinsured patients.

Hospital emergency departments (EDs) also would suffer from cuts to Medicaid. “Medicaid and self-pay [patients are] now 40 percent of our revenue, compared to 20 percent before Medicaid was expanded,” one ED chief told us. While more patients are covered thanks to the expansion, ED revenue from private insurance in these communities is down over the past two years, making hospitals more dependent on public insurance. ED chiefs also say that people with mental illnesses or substance use disorders experiencing crises are already crowding EDs, in part because it’s often easier for Medicaid beneficiaries to get to the hospital than to find primary care providers willing to treat them in a timely manner. If Medicaid funding is cut or eligibility requirements are changed, such problems could become much worse.

Medicaid Changes Already Impacting Providers

Complicating matters is a 2016 rule issued by the Centers for Medicare and Medicaid Services that was intended to improve quality of care and oversight for the growing number of Medicaid beneficiaries enrolled in managed care. Some states are responding to the rule by requiring that FQHCs and other safety-net clinics use more complex coding to file their claims for reimbursement, adding to the administrative burden on clinics. “We used to use just 15 codes to bill for services,” the director of a behavioral health clinic said. “Now there are about 250, and I’ve had to hire more administrative staff.”

Moreover, some clinics have seen longer gaps between the time claims are submitted and reimbursement is received from the state. The resulting cash flow problems hit smaller clinics, which have narrow operating margins, particularly hard. “This [delay] is causing smaller clinics to live in their ‘line of [bank] credit’,” one clinic director said. “Does the state want to deal only with large provider agencies?”

Paralyzed by Unease About the Future

These ongoing changes to Medicaid payment, along with proposed eligibility changes and fears of funding cutbacks, are causing grave concerns among community health leaders. With needs for care growing, they are understandably focused on the present. Otherwise, as one clinic director said, “[we] would be paralyzed by unease about the future.”

In the counties we visited, local independent political groups that have sprung up in response to these and other concerns see the federal government as out of touch with local needs for better health care, better schools, and higher-paying jobs — and with communities’ inability to dig deeper into their pockets to address these needs. For the clinics and hospitals that serve Medicaid patients and their communities, stable Medicaid funding will be critical to meeting their missions.

 

 

CMS terminates Idaho hospital’s Medicare contract

https://www.beckershospitalreview.com/finance/cms-terminates-idaho-hospital-s-medicare-contract-072718.html

Image result for critical access hospital

 

CMS ended its provider agreement with Blackfoot-based Idaho Doctors’ Hospital July 20.

Under rules enacted last September, a healthcare facility must average at least two inpatients per day and an at least two-night average length of stay to be considered an inpatient hospital for Medicare reimbursement. In April, CMS determined Doctors’ Hospital is not primarily engaged in providing care to inpatients and does not meet the new federal requirements for Medicare participation. The agency subsequently sent Doctors’ Hospital a Medicare termination notice.

“To go from being OK just 18 months ago, when we had our last survey, to now being told that we don’t meet the CMS conditions of participation because of new interpretations of the regulations is just difficult to comprehend,” Dave Lowry, administrative manager at Idaho Doctors’ Hospital, told KIFI earlier this month. “Like any business that is regulated by government agencies, we fully expect there to be changes to rules and their interpretations, but this drastic level of change just goes to show how much uncertainty there is in healthcare right now.”

After receiving the termination notice from CMS, Doctors’ Hospital sent letters to all patients affected by the contract termination, a spokesperson told Becker’s Hospital Review.

“We have worked with other area hospitals who provide the same services, and our staff provides this information for any patients who call with questions on where to go for care,” the Doctors’ Hospital spokesperson said.

 

Private equity’s next health care target

https://www.axios.com/private-equity-firm-apollo-buying-lifepoint-health-1532121720-9e9a07eb-3090-4da3-9183-48144da93695.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

A patient sits in a hospital bed with machines nearby.

LifePoint Health owns hospitals in mostly rural areas.

For-profit hospital system LifePoint Health is nearing a deal to sell itself to private equity firm Apollo Global Management for $6 billion, including debt, Reuters reports. Apollo acquired a separate hospital chain — RegionalCare Hospital Partners, which is now known as RCCH HealthCare Partners — in 2015.

Why it matters: Private equity is craving health care deals right now, and this buyout would further consolidate the hospital industry, which is attempting to turn around a pattern of stagnant admissions.

Reuters reported Friday that private equity firm Apollo Global Management was considering buying LifePoint Health in a deal valued at $6 billion, which included debt. Axios’ Bob Herman breaks down the proposed deal…

Thought bubble, per Bob: Private equity has its hands all over the health care industry these days. But it’s a little surprising to hear such a large price tag for a company that owns mostly rural hospitals, which have struggled with fewer admissions and have relied more on the lower-paying Medicare and Medicaid programs.

The bottom line: Gary Taylor, an analyst with J.P. Morgan Securities, wrote this to hospital investors over the weekend, “We certainly do not expect another superior offer for a low-growth, challenged rural hospital company.”

Just how bleak is the financial outlook for rural hospitals?

https://www.healthcarefinancenews.com/news/just-how-bleak-financial-outlook-rural-hospitals?mkt_tok=eyJpIjoiWm1abU9EWXhZMlppT0dSbSIsInQiOiJtQm1aMUNkVFBZWmNoUlpQMHRkOHBJcHlEMTg1MDRCa2xPR3h0bXJLWDVjSG1pZU5kZmx5ejNDbWFxMTRHVWR4N0FrQzA4cGgzXC9IdlpLMlBHcFBWemhOWTc3SHR0QUJjdXcxcHk2TTRBZFZxTk55Sis5NVJ2TnRyWFpyaHVWcVMifQ%3D%3D

Nearly half are operating with negative margins, according to new research, which says a high rate of uninsured patients is among the reasons.

With healthcare services being concentrated more and more among major health systems and larger providers, rural hospitals are struggling.

A new study from Chartis Group and iVantage Health Analytics sheds light on the scope of the problem. About 41 percent of rural hospitals faced negative operating margins in 2016, the report found.

If those hospitals were located in a state that elected not to expand Medicaid under the Affordable Care Act, those margins were generally worse than those of their peers, suggesting that such expansion had a mitigating effect on financial pressures.

Due to those financial pressures, 80 rural hospitals closed from 2010 to 2016, indicating that the rural health safety net has seen better days.

One of the key factors behind this was a high rate of uninsured patients, and a payer mix heavy on public insurers with lower claims reimbursement rates. More patients are seeking care outside rural areas, which isn’t helping, and many areas see a dearth of employer-sponsored health coverage due to lower employment rates. Many markets are also besieged by a shortage of primary care providers, and tighter payer-negotiated reimbursement rates.

Demographics aren’t helping rural hospitals, either. Patients in rural markets are generally more socioeconomically disadvantaged, with many patients over 65 years old and suffering from multiple health disparities, which lead to higher general healthcare costs.

To make matters worse, there’s a shortage of physicians in rural communities as well, with only about 39.8 physicians per 100,000 people. By contrast, the ratio in non-rural areas is 53.3 physicians per 100,000 people.

All this comes at a time when the shift from fee-for-service payment models to value-based reimbursement is in full swing, putting pressure on all hospitals to reduce costs — which is especially problematic for rural hospitals given that their demographic and staffing challenges have a tendency to drive costs up, not down.

The researchers pointed to the Graves-Loebsack Save Rural Hospital Act as a possible means of mitigating the problem. The bill, introduced by the House in 2015, would create a payment structure whereby 105 percent of “reasonable” costs would be reimbursed; 100 percent of bad debt would be reimbursed; and rural hospitals would be exempt from 2 percent of sequestration of payments.

The authors suggested revisiting the bill, which would also establish the Community Outpatient Hospital Program, a measure aimed at preserving emergency and outpatient care for rural markets. It would also recoup $5.4 billion in lost Medicare reimbursement among rural hospitals over 10 years.