For instance, the Medicare ambulance payment add-on for rural hospitals, which was last expanded as part of the 2003 Medicare Modernization Act and is set to expire on Dec. 31, will undergo studies by the GAO and the Medicare Payment Advisory Commission.
“What you're seeing is that people are going to take a serious look at whether you should just continue to extend them always or whether you should have a look at whether the program is working as intended or whether you need to have some type of larger reform in rural healthcare, which is something that gets kicked around a lot,” says Lisa Kidder, vice president for legislative affairs at the American Hospital Association.
Another new line of economic justification for the programs by hospital advocates is that rural hospitals provide comparable care at a lower cost than urban or suburban facilities. An April analysis of CMS shared-savings program data by the NRHA concluded that Medicare spent 3.7% less per rural Medicare beneficiary than for care provided in other areas. The data demonstrate that the rural payment add-ons were not extra money thrown at those providers but rather low-cost ways to ensure access to care for the 62 million Americans living in rural areas of the country.
“The federal investment in rural hospitals benefits both the rural patient and the taxpayer,” according to a June 26 letter from a coalition of hospital advocacy groups to members of Congress, regarding the cost-benefit findings.
Another part of the hospital advocacy push is to emphasize the economic impact of eliminating the supplemental payments.
For instance, the hospital letter noted the serious financial impact that could occur if the Medicare-dependent hospital add-on, which is for small hospitals where at least 60% of inpatient days or discharges are covered by Medicare, is allowed to expire on Sept. 30. The hospitals note that 34% of the 200 rural hospitals receiving the payment already operate at a negative operating margin.
“If Congress allows this designation to expire, the ability of many MDH facilities to continue to provide essential services in the communities they serve will be threatened, resulting in a significant reduction for rural seniors' access to care across the nation,” according to the hospitals' letter.
Part of that economic message is the associated impact of elimination of the payments on Medicare patients. For instance, the impact of the June 30 expiration of a Medicare payment directly to independent labs for hospital pathology work could be much larger than its roughly $90 million annual cost, according to provider advocates.
“As we're starting to hear now, the patients are in danger of starting to lose access to some of the tests” provided by those labs, says Alan Mertz, president of the American Clinical Laboratory Association. “They may lose local access to these tests if the hospitals can't afford to provide them or they can't do them in that hospital setting.”
For their part, hospitals are pushing various pieces of legislation that would maintain some of the Medicare extenders. Those bills include the Craig Thomas Rural Hospital and Provider Equity Act sponsored by Sen. Kent Conrad (D-N.D.) and a bipartisan group of senators from rural states. Also, the Rural Hospital Access Act introduced by Sen. Chuck Schumer (D-N.Y.), which has seven Democratic and three Republican co-sponsors, would extend the Medicare-dependent hospital program and enhanced Medicare low-volume adjustment until Sept. 30, 2013.
That legislation and the fiscal arguments are all part of the push by rural hospitals to contact their congressional representatives and begin a sustained message on the need for the extenders. Hospital advocates hope that the drumbeat results in the addition of another round of extensions for the payment provisions to any general funding package enacted in the lame duck session after the Nov. 6 election.
For individual hospitals, that might mean spelling out to elected officials that they have run out of cost-savings steps to make up for the loss of the payments.
At Labette, previous cost-saving efforts have included the equivalent of a 10% workforce reduction last year and reducing supply costs by 20%.
“We've done the things we can control,” Schmidt says. “Another round of cuts really means we have to start cutting services.”