A fair deal for rural hospitals

Virginia’s rural hospitals have a tough job even if they weren’t tormented by funding cuts and threats of more cuts. Their patients are aging, have fewer resources and are typically in poorer health than those served by urban and suburban hospitals. It’s a volatile combination, made more potent with the small pool of people reliant on these crucial providers, that makes for unpredictable financial challenges.

Because rural hospitals also are more dependent on Medicare and Medicaid reinbursements, changes and uncertainties in those programs are buffeting these small medical facilities this year.

“It’s a whole list of different things putting pressure on them,” said U.S. Rep. Morgan Griffith, a Republican whose 9th District is home to most of Virginia’s rural hospitals.

Griffith and a bipartisan group of lawmakers are working to preserve two programs that assist small hospitals and those serving a patient population in which at least 60 percent are covered by Medicare. Both expire this year without congressional action. Additionally, President Obama’s proposed budget includes cuts to a third program for the smallest rural hospitals.

Don Halliwill, Carilion’s chief financial officer, said hospitals in Bedford, Franklin and Tazewell counties could experience cuts estimated at $1.35 million if a program for low-volume hospitals is not extended. Tazewell could lose another $65,000 if a program for concentrated Medicare populations isn’t reauthorized, significant for a hospital with a streamlined staff.

“That’s a nurse,” he said.

All total, those reductions could cost Virginia hospitals $10 million, but it’s the cumulative effect across multiple programs over multiple years that is the real concern. They are already confronting 2 percent across-the-board cuts under the sequester as well as reimbursement reductions under the Affordable Care Act that were made under the assumption that hospitals would benefit from an expansion in Medicaid that may or may not occur in Virginia.

For the short-term, members of Congress must agree to continue programs adopted to halt a wave of rural hospital closures in the 1980s and 1990s. For the longer haul, Congress must institute broader Medicare payment reforms that were not addressed under ACA. The murky and byzantine formulas, all predicated on a zero-sum reimbursement system, pit hospitals with dramatically varied circumstances in a fight for survival that is unfair to the providers as well as the communities and people they serve.

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