Federal Medicare report unnerves rural hospitals

mlee@macon.comSeptember 22, 2013 

ATLANTA -- Small hospitals in parts of rural Georgia benefit from higher Medicare payments on the grounds that they are a lifeline for otherwise isolated patients. A new federal report recommends a cost-cutting reconsideration of that program, but rural hospitals say it’s a lifeline worth funding.

Medicare pays 101 percent of reasonable costs to Monroe County Hospital in Forsyth, Peach Regional Medical Center in Fort Valley and Sylvan Grove Hospital in Jackson. That’s because they are certified Critical Access Hospitals, so deemed because they are distant from other hospitals and serve rural populations.

Medicare pays other hospitals a set fee for each service, not a sum tied so closely to a hospital’s actual costs. The federal insurance covers senior citizens, as well as some younger people with disabilities.

“It’s the way a lot of us are still alive today,” said Monroe County Hospital CEO Kay Floyd. She said charity and indigent care plus bad debt amount to about 15 to 25 percent of that hospital’s would-be gross revenues.

Nationwide, nearly two of every three Critical Access Hospitals are in a 15-mile radius of another hospital but still get the status because of state power to include them as “necessary providers,” according to a new report by the federal Department of Health and Human Services. By the department’s mapping, that applies to 20 Georgia hospitals including Peach Regional, Monroe County and Sylvan Grove.

Decertifying those relatively close hospitals across the country would have saved Medicare $449 million in 2011, according to the report.

The report recommends that the federal agency that administers Medicare ask Congress to yank state power to waive the distance rule and set up a way to regularly review which hospitals have Critical Access Hospital status.

That agency, the Centers for Medicare and Medicaid Services, concurred with the recommendation, according to the report.

No bill has yet appeared that would make the changes, but President Barack Obama’s budget proposals have included a trim to Critical Access Hospitals, while at least one GOP budget proposal has made larger cuts to rural hospitals, said Maggie Eleh-wany, government affairs and policy vice president with the National Rural Health Association.

“We’ve seen proposals in the past, (though) there’s not one as horrific as this” report, she said. She’s watching congressional budget dealings that she expects to continue through the end of the year.

“A lot of these deals are going to be quick, fast and furious,” Elehwany said. “Staff is going to be scrambling to look for ways to fund things. ... If you want to save money, closing down a rural hospital is not the way to do it.”

Treating a typical elderly Medicare patient in a rural hospital, she said, is cheaper than treatment at a larger urban hospital.

Floyd said the 1 percent margin she gets under the program is by no means making her hospital rich. For one, it does not offset operating overhead, like marketing or putting televisions and telephones into rooms.

“I have three contiguous counties without a hospital,” Floyd said, referring to Crawford, Jones, and Lamar counties.

And she’s still fairly far from other hospitals for anyone who can’t go as the crow flies.

Driving, the closest other hospital is Sylvan Grove at 19 miles, then Macon’s and Griffin’s much larger hospitals, between 20 and 30 miles away.

To contact writer Maggie Lee, email her at mlee@macon.com.

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