Wis. rural hospitals could lose Medicare payments
- Associated Press
- August 25, 2013 - 4:30 PM
MADISON, Wis. — Forty-two of Wisconsin's rural hospitals could lose special Medicare payments under a proposal by a federal agency's fiscal watchdog.
A recent proposal from the Office of Inspector General at the Department of Health and Human Services would strip special payment status from two-thirds of the nation's 1,328 critical access hospitals — those not considered to be in sufficiently remote areas. That includes 42 in Wisconsin, the Wisconsin State Journal reported Sunday (http://bit.ly/14vomoV ).
The move could save $1.1 billion a year and would ensure that hospitals receiving the special payments "serve beneficiaries who would otherwise be unable to reasonably access hospital services," the agency said in a report Aug. 15.
But rural hospital leaders said losing the payments would threaten their ability to provide health care.
"We're going to lose a lot of rural hospitals and we're going to leave a lot of others walking wounded," said Tim Size, executive director of the Sauk City-based Rural Wisconsin Health Cooperative, which represents half of the state's 58 critical access hospitals.
The inspector general's proposal could cut deeper than a more limited plan in the Obama administration's 2014 budget proposal, which would affect eight of Wisconsin's 58 designated rural hospitals. That proposal would eliminate critical access status for the 71 hospitals that are within 10 miles of another hospital, including eight in Wisconsin: in Hudson, Lake Geneva, Osceola, River Falls, Shell Lake, Spooner, St. Croix Falls and Superior.
Rural hospitals are among the top employers in most communities, Size said.
"This is not only a frontal attack on rural health," he said. "It's a frontal attack on the rural economy."
Critical access hospitals, which have a maximum of 25 beds, get 101 percent of their costs from Medicare. That's substantially more than other hospitals get through their payment system, which is based on volume. The difference is about $860,000 each year per rural hospital, plus $485,000 that patients pay in higher out-of-pocket costs, according to the inspector general's report.
But the report said 846 of the country's critical access hospitals aren't at least 35 miles from another hospital or 15 miles away on mountainous or secondary roads, the distances normally required for the special payments. Most of those hospitals, including the 42 in Wisconsin, got their critical access status through state exemptions. Congress stopped the exemptions in 2006, but hospitals already designated were grandfathered.
Congress would have to approve the change.
Boscobel Area Health Care, which had a negative operating margin of 7.3 percent on average from 2009 to 2011, would have a hard time absorbing lower Medicare payments, said CEO David Hartberg.
"We typically take care of sicker, older and poorer populations who will struggle to find access in larger communities," Hartberg said.
© 2013 Star Tribune