Congress' newly passed farm bill has a holiday present for rural hospitals: debt refinancing.
The bill headed to President Donald Trump's desk includes a provision that would allow rural hospitals to refinance substantial debt through lower-interest loans from the U.S. Department of Agriculture.
Rural hospital lobbyists acknowledge the provision won't change much overnight for the 44% of rural hospitals which operate at a loss. The USDA requires applicants to show levels of financial viability that the really struggling hospitals likely can't currently meet.
However, they see it as a crucial part of their push on Congress or the CMS' Center for Medicare & Medicaid Innovation to allow rural hospitals to get rid of their inpatient departments and allow free-standing emergency departments. They want to create a new "provider type" in the CMS' pay system.
This proposed change could transform finances. And once the hospitals can prove financial feasibility they could try for these lower interest USDA loans.
House and Senate lawmakers have introduced this proposed change in the past two congressional sessions.
"The hope is, if we are able to get these changes happening on the side of CMS, as the rural hospitals' financial position improves, that they will be able to get these loans at better terms," said Diane Calmus of the National Rural Health Association.
The conference agreement between the House and Senate over the farm bill emphasizes that hospitals that want the refinancing must "meet USDA's financial feasibility and adequacy of security requirements."
Congress also emphasized "the necessity that USDA work with rural hospitals to improve their financial health as part of a refinancing agreement."
Danne Howard of the Alabama Hospital Association said the group hasn't thoroughly analyzed how many of its member hospitals—close to half of which are rural—would qualify now.
Sen. Chuck Grassley (R-Iowa), incoming chair of the powerful Senate Finance Committee, this year introduced the bill to make the provider type change in the upper chamber.
Calmus noted that rural health lobbyists have been talking with the House Ways and Means and Senate Finance committees about the change, as well as with the CMS Innovation Center about a possible demonstration project.
Legislation "hasn't made it to the finish line," she acknowledged, "but there's growing consensus that this is the move we need" given that payment systems haven't kept up with changes—such as the fact that simple operational procedures are now done in outpatient stays rather than requiring days of hospitalization.
In May testimony before the Senate Finance Committee, the head of a congressional Medicare advisory panel urged the change. He said lawmakers should authorize stand-alone emergency departments in areas that can't sustain an inpatient hospital.
The Medicare Payment Advisory Commission said in that report it was "concerned that (rural hospital) closures may leave beneficiaries without access to timely emergency care."
Stakeholders have said rural hospitals could start looking more like federally qualified health centers.
Telemedicine and mental health treatmentThe farm bill included another provision rural advocates wanted: prioritizing use of telemedicine through the administration of direct loans and grants for treating addiction and mental and behavioral health issues.
"Stigma is a big problem and in a rural area everyone knows your truck," Calmus of the NRHA said. "If you pull up to a local mental health provider, everyone knows you're there. Telehealth allows people to go around that: you can go into any other treatment room."
She added that where addiction treatment infrastructure is lacking in rural areas, primary-care physicians can jump in to help with the treatment.
Howard of the Alabama Hospital Association agreed the provision will extend her state's limited resources, particularly for the opioid epidemic.
"There's a shortage of mental health treatment centers in our state," she said. "Anything we can do with the treatment of opioid issues will go a long way."