One aspect of the reform law directly focused on rural providers is a provision that extended for another five years the CMS' Rural Community Hospital Demonstration Program, which is for “tweener” hospitals, those that are bigger than the 25-bed limit to be considered critical-access but with fewer than 51 beds. The inpatient-only project reimburses those hospitals using a cost-based structure. The number of participating hospitals has varied over the years—with some converting to critical-access status—but the ACA expanded its scope to include up to 30 hospitals, says Siddhartha Mazumdar, social science research analyst for the CMS. A total of 26 hospitals are signed up for the extended project—eight from the existing project and 18 newcomers, he says.
Normandy Brangan, a social science researcher for the CMS, says one thing learned from an evaluation of the first two years of the original project is that even within tweener hospitals, there was variation in financial stability, infrastructure and clinical needs.
Holy Cross Hospital, Taos, N.M., officials plan to leave that project this year because of a change in its patient profile that leaned more toward Medicare Advantage and made the inpatient PPS a better choice, says Peter Hofstetter, the 45-bed hospital's CEO. “It's going to be a great project, but the numbers moved on us,” he says.
Meanwhile, HHS officials say they are aware that critical-access hospitals are at a greater risk to take a hit from the healthcare reform law's cost-cutting Independent Payment Advisory Board.
At a Senate hearing on the HHS budget in March, HHS Secretary Kathleen Sebelius said such hospitals would be in “precarious territory” beginning in 2014 as a result of a quirk in the law that leaves critical-access hospitals vulnerable years before other hospitals are subject to the board's decisions. Sebelius told Sen. Jerry Moran (R-Kan.) that she was “supportive of taking a look at” proposals to exempt critical-access hospitals from IPAB cuts until 2019, when all hospitals would become subject to its cuts.