August 19, 2013—A Department of Health and Human Services (HHS) Office of Inspector General (OIG) report recommending a nearly two-thirds cut in the number of critical access hospitals (CAHs) would “kill rural health care,” the National Rural Health Association (NRHA) says.[ms-protect-content id=”2799″]
About 870 of the nation’s 1,329 CAHs participate in the 340B drug discount program.
In an Aug. 14 study, OIG concluded that if all CAHs had to re-apply for the designation, 849 would not meet requirements. To obtain CAH certification, a hospital must be located in a rural area and must be located a certain driving distance from other hospitals. Up until 2006, states could permanently exempt rural hospitals from the distance requirement by granting them a “necessary provider” (NP) designation. About 75 percent of all CAHs have such exemptions.
As a cost-saving measure, OIG recommends that HHS seek legislative authority to strip hospitals of their NP status, thus allowing them to reassess the hospitals’ eligibility. In its recent federal budget proposals, the Obama administration has recommended eliminating the CAH designation for hospitals located less than 10 miles from another hospital, which would remove approximately 70 hospitals from the program. Under current rules, they must be located either more than a 35-mile drive from the nearest hospital or CAH or a 15-mile drive in areas with mountainous terrain or only secondary roads.
Medicare reimburses CAHs’ costs at a more favorable rate than other types of hospitals. In addition, CAHs have been eligible for 340B discounts since the passage of the Affordable Care Act in 2010. During a webinar earlier this month, the Health Resources and Services Administration (HRSA) reported that 867 CAHs have enrolled in 340B.
“The recommendations in this report … threaten to eviscerate the progress made in rural health care over the past 16 years” when the CAH program was created, the NRHA said on its Rural Health Voices blog. Shutting down as many CAHs as the study envisions would “create huge voids in access to health care in rural America” and would cost, not save, money for taxpayers, the group says.[/ms-protect-content]