Transcript
Rural Extenders: Medicare-Dependent Hospitals/Low-Volume Adjustment Background During the 1980s hundreds of rural hospitals closed, and rural Americans lost access to health care. These hospitals struggled to maintain financial stability under Medicare’s fee schedule because of their small size and the large share of Medicare Beneficiaries who made up their patient base. Because of their vital nature in serving the rural Medicare Beneficiary population, Congress enacted various payment modifications over the following decades to help these facilities stay open and guarantee hospital access in rural communitites. Two of those payment modifications are the Medicare-Dependent Hospital (MDH) and the low-volume adjustment. Both are set to expire this year if Congress does not renew them. This is typically done in conjunction with the Sustainable Growth Rate. Medicare Dependent Hospital (MDH) Rural areas can be older, have lower incomes and suffer from higher rates of chronic illness than some of their urban counterparts. This greater dependence on Medicare may make certain rural hospitals more financially vulnerable to prospective payment. To reduce this risk and support small rural hospitals for which Medicare patients make up a significant percentage of inpatient days or discharges, Congress established the MDH Low-Volume Adjustment Hospital (FY 2015) program in 1987. An MDH must have fewer Aurora Medical Center (Hartford) than 100 beds, cannot be a Sole Community Aurora Lakeland Medical Center (Eklhorn) Aurora Medical Center (Oshkosh) Hospital or participate in other alternative Aurora Medical Center (Summit) payment calculations. They must also meet a Aurora Medical Center (Two Rivers) threshold test where at least 60% of their Froedtert St. Josephs Hospital (West Bend) inpatient discharges consist of Medicare UW Health Partners Watertown Beneficiaries. Approximately 200 hospitals, Wheaton Franciscan Healthcare - Franklin including between two to four each year in Divine Savior Healthcare (Portage) Fort HealthCare (Fort Atkinson) Wisconsin, are paid under the Inpatient Monroe Clinic Prospective Payment System (PPS) as an MDH. Sauk Prairie Memorial Hospital Low-Volume Adjustment The low-volume adjustment provides important payments to hospitals that are more than 15 road miles from another comparable hospital and has less than 1,600 discharges of individuals entitled to, or enrolled for, benefits
St. Clare Hospital & Health Services (Baraboo) Mile Bluff Medical Center (Mauston) Beaver Dam Community Hospital Lakeview Medical Center (Rice Lake) Ministry – St Mary’s Hospital (Rhinelander) Riverview Hospital Association (WI Rapids) Ministry – Howard Young Medical (Woodruff)
under Medicare. In recent years, the low-volume adjustment has been improved to better account for the relationship between cost and volume. The result has been to help level the playing field for low-volume providers so as to sustain and improve access to care in rural areas. Key Points Twenty-three percent of the U.S. population lives in rural areas. Rural Americans are typically older, poorer and sicker than their urban counterparts.
Despite a smaller size and patient base, rural hospitals must still provide a full complement of care in order to meet local community needs.
Rural hospitals’ low-patient volumes oftentimes makes it difficult for them to manage high fixed costs, which in turn makes them vulnerable to policy and market changes as well as to Medicare and Medicaid payment cuts.
Certain factors beyond providers’ control can affect the costs of furnishing services. Patient volume is one such factor and is particularly relevant in small and isolated communities. The Congress has recognized the vulnerabilities rural hospitals face and created several programs to assist, including the MDH and low-volume adjustment.
Extending these provisions will continue to provide for a level of economic stability in rural Wisconsin communities and hospitals.
Based upon current data, rural hospitals continue to perform well compared to their larger counterparts including through demonstrated quality, patient satisfaction and operational efficiency for the type of care most relevant to rural communities.
WHA/RWHC Position The Wisconsin Hospital Association and the Rural Wisconsin Health Cooperative support extending the Medicare Dependent Hospital program and the Low-Volume Adjustment in order to help ensure access to care in rural communities. WHA and RWHC support reauthorizing the MDH and LVA policies either in conjunction with the Sustainable Groth Rate or through separate legislation, “The Rural Hospital Access Act”, which has previously been proposed in past Congresses. This legislation regularly receives bipartisan support.
January 2015
