STARKSBORO, Vt. – On Aug. 15, the Office of the Inspector General of the federal Department of Health and Human Services released a report proposing changes that threaten the participation of New England rural hospitals in the critical-access hospital program, designed to stabilize small rural hospitals and reduce their risk of closure.
Of Maine’s 16 critical-access hospitals, four — Blue Hill Memorial, Waldo County General in Belfast, Sebasticook Valley in Pittsfield and Redington-Fairview General in Skowhegan — are at risk of closure under the inspectors’ proposal. (St. Andrews in Boothbay Harbor, whose critical-access status is also at risk, is already scheduled to be converted by its nonprofit owner into an urgent care and rehabilitation center.)
The critical-access hospital program helps maintain access to care in rural New England by improving the financial viability of critical-access hospitals and the quality of their services.
Critical-access-hospital designation provides qualifying rural hospitals with access to technical-assistance resources and with Medicare reimbursement based on the cost of caring for Medicare beneficiaries. It also revises the requirements critical-access hospitals must meet to participate in Medicare.
The critical-access hospital program was created under the Balanced Budget Act of 1997 in response to rural hospital closures. To qualify for this designation, a hospital must be in a rural area 35 miles from another hospital (15 miles in mountainous areas or with only secondary roads) and meet standards related to bed size, average length of stay and provision of emergency services.
With Centers for Medicare and Medicaid Services approval, states and their governors were allowed to also designate some critical-access hospitals that failed to meet the distance requirements but qualified as “necessary providers.”
The Medicare Modernization Act prohibited designation of new necessary providers effective Jan. 1, 2006, but allowed existing ones to keep their critical-access designation as long as they met all other criteria.
Both the Balanced Budget Act and Medicare Modernization Act recognized that mileage standards alone were insufficient to identify essential providers of service.
The inspectors recommend eliminating the mileage exemption for necessary providers, thereby overriding the authority allowing states to designate necessary providers. This would allow CMS to reassess necessary provider critical-access hospitals using the original mileage requirements and potentially revoke their designation.
Hospitals that lose critical-access status would revert to lower Medicare payment rates that are ill-suited to low-volume rural hospitals. Many would likely close, resulting in reduced access to care for rural residents.
Based on the inspectors’ data, almost half of New England’s critical-access hospitals would be subject to the proposed changes, including the Maine facilities mentioned above.
Critical-access hospitals are safety net providers for rural communities and the hubs of local systems of care.
These hospitals serve a disproportionate share of elderly and low-income individuals, populations more heavily affected by travel barriers. Reduced access due to hospital closures would unduly burden these vulnerable populations.
Critical-access hospitals typically are among the largest employers in their communities. Nationally, the average critical-access hospital employs more than 100 people and provides more than $4 million in direct salary, wages and benefits to their local economies.
Many critical-access hospitals already face financial challenges because of their rural location, workforce shortages, struggling economies, constrained resources and growing burden of providing uncompensated care to uninsured and low-income individuals. Critical-access hospital designation supports them in meeting these challenges while serving their communities.
The New England Rural Health RoundTable works closely with critical-access hospitals by supporting training initiatives, quality and performance improvement programs and networking opportunities. We know their commitment to providing high-quality, cost-effective care.
Faced with the challenges of health care reform, slow recovery of rural economies and a new round of rural-hospital closures, we question the wisdom of overriding state authority to name necessary providers for purposes of critical-access hospital designation.
The critical-access hospital program, while modest compared to other federal programs, is crucial to rural communities as it successfully fulfills its mission of ensuring access to care and protecting the health of rural residents.
Julie Arel is executive director of the New England Rural Health RoundTable in Starksboro, Vt., the official state rural health association for the New England states.