After five years of haggling at the federal level, an experimental project designed to create federal models for alternative rural hospitals is getting off the ground.
New licensing categories for "Each/Peach" facilities have come to fruition for eight hospitals in Kansas, South Dakota and West Virginia.
Under the program, a rural primary-care hospital (or Peach), which serves as a small inpatient facility, will get cost-based Medicare reimbursement. A nearby larger hospital, known as an Essential Access Community Hospital (or Each), receives patients transferred from rural primary-care hospitals.
The approach is intended to provide limited healthcare services to small communities and leave acute care to larger hospitals.
"We chose to pursue certification to ensure that we would be able to keep our doors open for acute inpatient care," said Kris Ochs, administrator at 18-bed Grisell Memorial Hospital in Ransom, Kan., which was certified as a "Peach." The "Each" that's related to Grisell is 133-bed Hays (Kan.) Medical Center, which will be reimbursed as a sole community hospital by Medicare.
Other facilities that have been certified are 32-bed Faulk County Memorial Hospital (Peach) in Faulkton, S.D., and 96-bed Queen of Peace Hospital (Each) in Mitchell, S.D.; 20-bed Broaddus Hospital (Peach), Philippi, W.Va., and 114-bed Davis Memorial Hospital (Each) in Elkins, W.Va.; and 35-bed Webster County Memorial Hospital (Peach) in Webster Springs, W.Va., and 291-bed United Hospital Center (Each) in Clarksburg, W.Va.
Under the program, "Peaches" will receive cost-based reimbursement rather than Medicare's standard rates per case, which are set prospectively. "Eaches" are reimbursed as sole-community hospitals, which in most cases get higher Medicare payments in return for agreeing to accept "Peaches' " patients. "Eaches" must have at least 75 beds.
The project, approved by Congress in 1989, was in the planning and development stages for the last five years before regulations became effective in June 1993, HCFA said. In 1991, HHS awarded $9.8 million to seven states to begin the pilot project.
Congress altered its criteria last year for "Each/Peach" designations so more rural hospitals would become interested. For example, new legislation passed last year altered a 72-hour cap on inpatient stays at the facilities to a 72-hour average, making the program more attractive for rural primary-care hospitals (May 10, 1993. p. 17).
More rural hospitals are expected to be certified later this year, HCFA said. They will come from the seven authorized project states, which are California, Colorado, Kansas, New York, North Carolina, South Dakota and West Virginia.