Mary Colclazier, the administrator at 25-bed Kiowa County Memorial Hospital, wants to oversee the geriatric psychiatric unit connected to her rural hospital, but restrictions placed on critical-access hospitals prevent her from operating the unit and still receiving reasonable Medicare payments.
The Greensburg, Kan., hospital leases the unit to neighboring Minneola (Kan.) District Hospital, to ensure that it complies with critical-access hospital rules.
Those rules should be relaxed to enable hundreds of rural hospitals to convert to critical-access facilities and benefit from more reasonable Medicare payments, the General Accounting Office recommended in a report released last week.
The number of critical-access hospitals has risen sharply in recent years. There were 681 of them in 2002, up from 36 in 1998, according to the GAO report. Hospitals must have an average daily census of fewer than 15 acute-care patients to qualify for the designation. Because they provide essential services in otherwise medically underserved areas, critical-access hospitals receive more favorable, cost-based Medicare reimbursements than other acute-care hospitals.
The GAO suggested dropping a ban on critical-access status for rural hospitals that operate rehabilitation and psychiatric units-a move that would benefit Kiowa. Hospitals that run these units should be able to be part of the program and receive Medicare payments based on reasonable costs of providing services, rather than receiving fixed amounts under the prospective payment system, the GAO concluded in its 35-page report.
"We would be able to take back the unit and manage it like the past," Colclazier said. "It would be the best of both worlds. We would benefit greatly."
Rural hospitals that operate rehabilitation and psychiatric units and are ineligible for the critical-access program have considered closing their units in order to join the program and receive the Medicare benefits, said Don May, the American Hospital Association's vice president of policy.
"This helps to allow small rural hospitals to meet the acute-care needs and the psychiatric and rehab needs of the community," May said. "It would be a real advantage to keep the psychiatric and rehab needs in the community. It is a choice a lot of small hospitals are thinking about."
Also, the GAO report recommended that the critical-access census limit of 15 acute-care patients per day be adjusted to an annual average of 15 patients to take into account seasonal variations. Critical-access hospitals can maintain up to 25 beds if swing beds are included and no more than 15 beds are used for acute-care patients.
The AHA and the National Rural Health Association applauded the recommendations and said more hospitals would be able to provide services and receive adequate Medicare reimbursement under the GAO's scenario.
"They validated what we have been saying all along," said Alan Morgan, vice president of government affairs at rural association, which represents approximately 800 rural hospitals, including about 200 critical-access hospitals. "We have urged legislative changes to address this."
Morgan's association supports two similar pieces of legislation introduced in the Senate and House, which both address the flexibility of patient census counts and the inclusion of psychiatric and rehabilitation units. Both the House bill-co-sponsored by Reps. Jerry Moran (R-Kan.) and Jim Turner (D-Texas)-and the Senate bill-co-sponsored by Sens. Sam Brownback (R-Kan.) and Ben Nelson (D-Neb.)-are currently under consideration at the committee level.
The GAO recommendations would benefit the community as a whole, Morgan said. "If the hospitals can join the program and they can still maintain psychiatric beds, that is where we should be heading," he said.
Relaxing the census limit to an annual average of 15 patients would accommodate 129 hospitals that exceeded the current limit of 15 patients per day because of seasonal increases, the GAO reported, citing 1999 Medicare claims data (See chart).
The increases in patient census at the hospitals the GAO studied were attributed to the winter flu and pneumonia season. Natural disasters also should be factored in, May said. "Allowing hospitals to have more than 15 probably makes a lot more sense," he said.
Overall, the GAO identified 683 rural hospitals that were currently not critical-access but would be under the recommended changes. In addition to the hospitals that exceeded the daily patient census, 93 hospitals operated inpatient psychiatric or rehabilitation units, which they would have to close to convert to critical-access status under current law. The GAO recommended that Congress make adjustments for the number of unit beds, patients and lengths of stay in such psychiatric and rehabilitation units.