In an effort to relieve rural
hospitals’ eternal battle with insufficient funding, the Center for Medicare
and Medicaid Services (CMS) is expanding its alternative reimbursement plan for
another 5 years for Medicare-covered treatment costs for rural hospitals. Already
starved of in-demand and expensive physicians such as specialized surgeons,
radiologists, and anesthesiologists, many hospitals are struggling to provide optimal care with
their available resources under their shoestring budgets or deficient incomes
caused by insufficient reimbursement from both Medicare and private insurers.
Larger, urban hospitals can
sometimes rely on extra reimbursement from private insurers to cover occasional
discrepancies between treatment costs and governmental payments. However for
rural hospitals that provide care to lower-income, small populations, there is
a lack of a competitive market for insurance that drives down prices and raises
reimbursements. These hospitals then grow dependent on full Medicare
reimbursement to meet operating costs, and if these costs are not met by
revenue streams, private and governmental, these hospitals, the only source of
care for millions of rural Americans, are forced to close—as evidenced by the
78 closures since 2010.
In response to this closure
epidemic, CMS is inviting qualifying rural hospitals to apply to join its
payment plan designed specifically for mid-sized rural hospitals—the Rural
Community Hospital Demonstration. Under this reimbursement plan, the hospitals
will receive reimbursement for inpatient treatments costs for Medicare-covered
patients after the patient is
discharged from the hospital as long as the procedure was completed at a
reasonable speed and cost. The current standard method for Medicare payment is
that each year hospitals are required to estimate treatment costs for different
procedures and illnesses and submit them to CMS. Then based on those early
predictions, CMS reimburses the hospitals for the treatments they performed for
Medicare patients. Because of rising healthcare costs, outdated technology in
these hospitals, and naturally arising treatment complications, these annual
predictions are sometimes insufficient to cover costs, which can be devastating
to a small hospital’s budget.
That is why the CMS is
campaigning for rural hospitals to join its alternative plan. To qualify, the
hospitals must have 51 beds or less but also be larger than a Critical Access
Hospital. Also, they must provide 24-hour emergency care, and be situated in a
designated rural area. Applications for hospitals to switch plans close May 17th
with priority given to hospitals in states with the lowest 20 population
densities. With more hospitals ensuring that their budgets are always met by joining
this plan, more rural Americans will continue to receive the care that they
need.
