Study could impact hospitals across state
08/28/2013 - The Journal. By Rachel Moelnda.
MARTINSBURG - A recent report from the U.S. Department of Health and Human Services Office of the Inspector General found that nearly two-thirds of Critical Access Hospitals would not qualify for cost-based reimbursement if they were required to re-enroll in Medicare.
There are 19 designated CAHs in West Virginia, and two are located in the Eastern Panhandle: Jefferson Medical Center in Ranson and Valley Health War Memorial Hospital in Berkeley Springs.
CAHs are hospitals with no more than 25 beds with an average length of stay not exceeding 96 hours, according to Tony Gregory, vice president of legislative affairs for the West Virginia Hospital Association - an education and advocacy nonprofit that represents hospitals statewide. CAHs are also designated by their proximity to other medical centers. They must be located in rural areas and be at least 35 miles from another hospital or CAH.
There is an exception to the distance rule, however. Those CAHs that have been certified by the states as necessary providers, or NP CAHs, are exempt. Both JMC and Valley Health are considered necessary providers, according to Gregory.
The only reason a CAH would have to re-enroll in Medicare is if it moved its location and was unable to keep its 75 percent rule, according to Allison Adler, communications director at the West Virginia Department of Health and Human Resources.
"The 75 percent rule means that they must see 75 percent of the same patients and keep 75 percent of the same employees," Adler said.
The Critical Access program is a federal program that was established in 1997 under the Federal Balanced Budget Act, according to the DHHS report.
"(It was) the purpose of recognizing small rural hospitals as essential providers of care for rural populations," Gregory said. "The program aims to ensure access to health care in more remote settings through hospital payments based on actual incurred costs."
CAHs and NP CAHs receive cost reimbursement for services administered.
According to the report, CAHs and NP CAHs were only required to meet the location requirements during their initial certification prior to 2013. The Centers for Medicare and Medicaid Services, which administers the program at the federal level, was not reassessing the location requirements during its routine reassessments of critical access certification, according to the report.
Because of this, many CAHs maintained their status despite no longer meeting the location requirements. As an example, the OIG study said Medicare and its beneficiaries could have saved $449 billion in 2011 if CMS decertified such facilities.
While cutting costs can be viewed as maximizing efficiency, Gregory said losing CAH designation could be detrimental to those in West Virginia.
"It certainly would present some challenges in terms of the ability of those hospitals to maintain the services that they currently provide by not receiving cost-based reimbursements," Gregory said.
The OIG report made four recommendations to DHHS, which include:
(1) seek legislative authority to remove NP CAHs' permanent exemption from the distance requirement, thus allowing CMS to reassess these CAHs
(2) seek legislative authority to revise the CAH Conditions of Participation to include alternative location-related requirements
(3) ensure that it periodically reassesses CAHs for compliance with all location-related requirements
(4) ensure that it applies its uniform definition of "mountainous terrain" to all CAHs. CMS concurred with the first, third and fourth recommendations, but did not concur with the second recommendation.
Federal lawmakers said they are worried about the OIG's recommendations, due to the number of CAHs in West Virginia. Rep. David McKinley, who represents the First Congressional District, issued a press release last week stating his concerns.
"If someone living in a rural area has a heart attack, the first hour is critical to their survival. If a hospital is too far away, the results could be devastating," McKinley said. "People in rural areas depend on Critical Access Hospitals. Before life-or-death decisions like this are made, HHS needs to look at all the facts."
Rep. Shelley Moore Capito, who represents the Second Congressional District, of which the Eastern Panhandle is a part, said implementing OIG recommendations could have "dire implications" for CAHs across the state.
"I am a huge supporter of Critical Access Hospitals, recognize their importance in our rural communities and I am paying close attention to any actions that result from the OIG's recommendations," Capito said in a statement.
The CAH program is officially known as the West Virginia Rural Hospital Flexibility Program and is administered by the state's Division of Rural Health.