Access to Acute Hospital Care

 Kentucky Hospital Association Defends Access to Acute Hospital

Care in Small, Rural Communities

 Louisville, KY (November 22, 2013)— The Kentucky Hospital Association (KHA) hosted a press conference yesterday to speak out against the August 15 report by the Office of Inspector General (OIG) of the U.S. Department for Health and Human Services. The OIG report recommended that the Centers for Medicare & Medicaid Services (CMS) decertify up to two-thirds of the nation’s Critical Access Hospitals (CAHs) that do not meet a regulatory requirement of distance to another hospital – criteria these hospitals were not required to meet when they entered the program. 

 The OIG report found that nearly two-thirds of CAHs would not meet the location requirement if required to re-enroll.  KHA vehemently disagrees with the OIG recommendation, and currently, CMS does not have the authority to decertify most of these CAHs, as most are legally exempt from the distance requirement.  Prior to its expiration in 2006, states could exempt CAHs from the distance requirement by designating them as “necessary provider” (NP) CAHs.  NP CAHs were required to meet strict criteria on rurality and other factors measuring community needs for health care services.  If CMS obtained legislative authority to remove NP CAHs’ permanent exemption from the location requirements, many Kentucky CAHs would be stripped of their CAH certification, which was created to ensure rural beneficiaries have access to hospital services.

 Kentucky is the ninth most rural state in the county, with approximately 44 percent of Kentucky’s citizens living in rural areas, according to the U.S. Census Bureau 2012 Statistical Abstract.  Additionally, only 35 of Kentucky’s 120 counties are classified as urban by the U.S. Department of Agriculture’s Rural/Urban Continuum Codes. 

 Many of Kentucky’s critical access hospitals converted to CAH status under the NP CAH provision.  Since that time there has been no new growth of CAHs in Kentucky and very little nationally.  Kentucky has 29 CAHs, representing almost one-third of the state’s acute care hospitals as shown here http://www.kyha.com/wp-content/uploads/2013/11/KentuckyCriticalAccessHospitals.pdf

 The CAH federal designation has helped 28 Kentucky counties maintain their small, rural hospitals, thus saving countless lives through the provision of acute care, outpatient and emergency services for nearby rural residents.  Additionally, jobs have been saved and the economic stability of these small communities has remained intact.  In many communities, the local hospital is the largest private employer and the wages and salaries hospitals pay their employees has a ripple effect as it moves through the larger local economy, supporting other businesses and jobs, as well as generating a tax revenue for the state.  Susan Staling, chief executive officer of Marcum & Wallace Memorial Hospital stated, “The value of critical access hospitals extends beyond the care we provide.  The 29 CAHs in Kentucky provide more than 6,000 jobs and generate an estimated $28 million in state and local annual tax revenue.”

 At the time the OIG report was released recommending CMS seek authority to strip these communities of their CAH, KHA was working with other rural stakeholder groups, including the Community and Economic Development Initiative of Kentucky (CEDIK), to compile a comprehensive study on the value of critical access hospitals to the commonwealth.  The results of the study were released yesterday, November 21 – National Rural Health Day.  The study measured the value of CAHs in the areas of quality, patient satisfaction, economic impact, cost of care and access to comprehensive health care services by rural Kentuckians.  The study was released to educate the public and policy makers on the CAH program and demonstrate how its value far outweighs the resources that support it.  The study finds that Kentucky’s CAHs provide high quality care valued by rural Kentuckians who rely on these nearby hospitals for access to a full range of health care services and providers — essential because many rural Kentuckians do not have the financial means, including transportation, to afford the cost to access care at regional health care centers.   A copy of the study is available at http://www.kyha.com/wp-content/uploads/2013/11/ValueofCriticalAccessHospitals.pdf

 Michael T. Rust, president of the KHA, said “Kentucky’s 29 critical access hospitals represent almost one-third of the state’s acute care hospitals and receive Medicare and Medicaid reimbursement on a reasonable cost basis, which is defined as 101 percent of the cost of care provided (not charges).  Even though there are 1,330 CAHs nationally, together they receive only two percent of total Medicare payments.  The CAH payment has helped ensure continued access to essential acute care services in rural areas, where 44 percent of Kentuckians reside.”    

 Fran Feltner, DNP, Director of the University of Kentucky College of Medicine Center of Excellence in Rural Health added, “These rural, safety-net hospitals not only strive to cure, but also to prevent disease and improve health—regardless of a patient’s ability to pay.  They are the hub of rural health care and are responsible for recruiting and incentivizing physicians, both primary care and specialty, to work in rural Kentucky.”

 Charles Lovell, KHA Board Chair and chief executive officer of Caldwell Medical Center, a critical access hospital in Princeton, stated the OIG report is shortsighted adding that cuts to the CAH payment program would cause many small, rural hospitals to close.  “The OIG report seeks to eradicate rural health care by shutting down many of the nation’s rural hospitals.  This is outrageous and we are here today to defend access to nearby appropriate medical care for all Kentuckians — not just those in urban areas.”

 If you were not able to attend but would like to view the event, a video of the press conference can be accessed at http://www.kyha.com/wp-content/uploads/2013/11/KHAPressConference112113.wmv.

Photos from the event are available on KHA’s Flickr page: http://www.flickr.com/photos/109516774@N02/sets/72157637944842034

For a copy of the OIG Report, please visit:

http://www.kyha.com/wp-content/uploads/2013/11/OIGReportonCAHProgram.pdf

 About the Kentucky Hospital Association

The Kentucky Hospital Association was established in 1929 and is a not-for-profit organization of which all Kentucky hospitals are members. The Association represents and facilitates collaborative efforts among Kentucky hospitals and is the source for strategic information about the constantly changing health care environment. KHA is a membership-driven organization that provides proactive leadership to create an environment in which Kentucky hospitals are successful in serving their communities. For more information, go to www.kyha.com