Monday, September 02, 2013

Critical Access and Politics

The Balanced Budget Act (BBA) of 1997 authorized States to establish a State Medicare Rural Hospital Flexibility Program (Flex Program) under which certain facilities participating in Medicare can become CAHs [Critical Access Hospitals.

Quoting the US Department of Health and Human Services, “Some of the requirements for CAH certification include having no more than 25 inpatient beds; maintaining an annual average length of stay of no more than 96 hours for acute inpatient care; offering 24-hour, 7-day-a-week emergency care; and being located in a rural area, at least 35 miles drive away from any other hospital or CAH (fewer in some circumstances)…. Certification allows CAHs to receive cost-based reimbursement from Medicare, instead of standard fixed reimbursement rates.”

The ostensible purpose of this program was to save hospitals in remote, thinly populated areas that were too small to survive under regular Medicare reimbursement rates.

As originally conceived, relatively few CAHs would be certified, but in government programs it is hard to avoid politics, so the program included a loophole which allowed state governors to certify hospitals without regard to the distance criteria.  The possibility of becoming eligible for cost-based reimbursement proved irresistible and so there are now over 1300 CAH’s and the cost to Medicare has passed $2 billion per year.

Now Medicare wants to clamp down, particularly on those hospitals that do not satisfy the criterion of being located within 35 miles of another hospital.  The Obama administration’s 2014 budget wants to decertify the 70 CAHs that are within 10 miles of another hospital, saving $40 million.

I can hear the screams from here.



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