[Senate Hearing 115-702]
[From the U.S. Government Publishing Office]
S. Hrg. 115-702
RURAL HEALTH CARE IN AMERICA:
CHALLENGES AND OPPORTUNITIES
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FINANCE
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
MAY 24, 2018
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Finance
_________
U.S. GOVERNMENT PUBLISHING OFFICE
38-094 PDF WASHINGTON : 2019
--------------------------------------------------------------------------------------
COMMITTEE ON FINANCE
ORRIN G. HATCH, Utah, Chairman
CHUCK GRASSLEY, Iowa RON WYDEN, Oregon
MIKE CRAPO, Idaho DEBBIE STABENOW, Michigan
PAT ROBERTS, Kansas MARIA CANTWELL, Washington
MICHAEL B. ENZI, Wyoming BILL NELSON, Florida
JOHN CORNYN, Texas ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina BENJAMIN L. CARDIN, Maryland
JOHNNY ISAKSON, Georgia SHERROD BROWN, Ohio
ROB PORTMAN, Ohio MICHAEL F. BENNET, Colorado
PATRICK J. TOOMEY, Pennsylvania ROBERT P. CASEY, Jr., Pennsylvania
DEAN HELLER, Nevada MARK R. WARNER, Virginia
TIM SCOTT, South Carolina CLAIRE McCASKILL, Missouri
BILL CASSIDY, Louisiana SHELDON WHITEHOUSE, Rhode Island
A. Jay Khosla, Staff Director
Joshua Sheinkman, Democratic Staff Director
(ii)
C O N T E N T S
----------
OPENING STATEMENTS
Page
Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman,
Committee on Finance........................................... 1
Wyden, Hon. Ron, a U.S. Senator from Oregon...................... 3
WITNESSES
Pink, George H., Ph.D., deputy director, North Carolina Rural
Health Research Program; senior research fellow, Cecil G. Sheps
Center for Health Services Research; and Humana distinguished
professor, Gillings School of Global Public Health, University
of North Carolina, Chapel Hill, NC............................. 7
Mueller, Keith J., Ph.D., interim dean, College of Public Health;
director, RUPRI Center for Rural Health Policy Analysis; and
Gerhard Hartman professor of health management and policy,
University of Iowa, Iowa City, IA.............................. 9
Martin, Konnie, chief executive officer, San Luis Valley Health,
Alamosa, CO.................................................... 10
Thompson, Susan K., M.S., B.S.N., R.N., senior vice president,
integration and optimization, UnityPoint Health; and chief
executive officer, UnityPoint Accountable Care, West Des
Moines, IA..................................................... 12
Murphy, Karen M., Ph.D., R.N., chief innovation officer and
founding director, Glenn Steele Institute of Health Innovation,
Geisinger, Danville, PA........................................ 14
ALPHABETICAL LISTING AND APPENDIX MATERIAL
Hatch, Hon. Orrin G.:
Opening statement............................................ 1
Prepared statement........................................... 43
``Ensuring Access to Emergency Services for Medicare
Beneficiaries in Rural Communities,'' Medicare Payment
Advisory Commission, May 24, 2018.......................... 45
Martin, Konnie:
Testimony.................................................... 10
Prepared statement........................................... 50
Responses to questions from committee members................ 58
Mueller, Keith J., Ph.D.:
Testimony.................................................... 9
Prepared statement........................................... 64
Responses to questions from committee members................ 71
Murphy, Karen M., Ph.D., R.N.:
Testimony.................................................... 14
Prepared statement........................................... 79
Responses to questions from committee members................ 84
Pink, George H., Ph.D.:
Testimony.................................................... 7
Prepared statement........................................... 89
Responses to questions from committee members................ 96
Thompson, Susan K., M.S., B.S.N., R.N.:
Testimony.................................................... 12
Prepared statement........................................... 104
Responses to questions from committee members................ 109
Wyden, Hon. Ron:
Opening statement............................................ 3
Prepared statement........................................... 122
Communications
American Ambulance Association................................... 123
American Clinical Laboratory Association (ACLA).................. 125
American Hospital Association.................................... 128
Association of Air Medical Services (AAMS)....................... 134
Centerstone...................................................... 137
Medicare Dependent Rural Hospital Coalition...................... 144
National Association of Chain Drug Stores (NACDS)................ 147
National Rural Health Association (NRHA)......................... 149
Point of Care Testing Association (POCTA)........................ 156
Rural Referral Center/Sole Community Hospital Coalition.......... 159
RURAL HEALTH CARE IN AMERICA: CHALLENGES AND OPPORTUNITIES
----------
THURSDAY, MAY 24, 2018
U.S. Senate,
Committee on Finance,
Washington, DC.
The hearing was convened, pursuant to notice, at 9:07 a.m.,
in room SD-215, Dirksen Senate Office Building, Hon. Orrin G.
Hatch (chairman of the committee) presiding.
Present: Senators Grassley, Crapo, Roberts, Enzi, Thune,
Burr, Portman, Cassidy, Wyden, Cantwell, Carper, Cardin, Brown,
Bennet, Casey, Warner, McCaskill, and Whitehouse.
Also present: Republican staff: Jay Khosla, Staff Director.
Democratic staff: Joshua Sheinkman, Staff Director.
OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM
UTAH, CHAIRMAN, COMMITTEE ON FINANCE
The Chairman. The hearing will come to order.
I would like to welcome everyone to today's hearing. The
topic today is rural health care, which is a critical issue for
virtually every member of this committee and so many others.
I have long considered it a special mission to create the
same rural payment opportunities that many of our Nation's
urban counterparts enjoy. Representing a western State, I
understand the challenges our rural hospitals and providers
face to deliver high-quality medical care to families in
environments with more limited resources.
In the Senate, rural health-care policy boasts a long
history of collaboration and cooperation on both sides of the
aisle. Take, for example, back in 2003 when we passed the
Medicare Modernization Act. The MMA included a comprehensive
health-care package tailored specifically with rural
communities, hospitals, and providers in mind. The MMA finally
put rural providers on a level playing field with their
neighbors in larger communities.
The law also put into place common-sense Medicare payment
provisions that help isolated and underserved areas of the
country provide access to medical care as close to home as
possible.
However, while the vast majority of rural health payment
policies enacted in the MMA were permanent, some were only
temporary. In the years following, these temporary provisions
have become known as the Medicare extenders. As many of us
know, the problem with extenders is that annual debate over
necessary funding often takes priority over developing a more
robust, strategic plan for the future.
Although some partisan and bipartisan health-care policies
have since altered Medicare payments, many rural and frontier
health-care providers still face significant obstacles
attempting to successfully participate in Medicare's delivery
system reforms and bundled payment arrangements.
And while these changes continue to emphasize new ways to
pay providers, Medicare's existing strategies to preserve
access to health care in rural areas still rely on special
reimbursement programs that either supplement inpatient
hospital payment rates or provide cost-based hospital payments.
Now, these special payment structures may work just fine in
certain parts of the country. But even with the wide range of
special Medicare rural payment programs, some smaller
communities are home to hospitals that still find it hard to
achieve financial stability. The reasons, as we will learn from
the expert witnesses on the panel today, are complex and
multifaceted.
For example, when compared to their urban counterparts, on
average, the 4 million Medicare beneficiaries living in rural
and frontier areas are less affluent, suffer from more chronic
conditions, and face higher mortality rates.
To make matters worse, small rural hospitals continue to be
more heavily dependent on Medicare inpatient payments as part
of their total revenues. At the same time, we are seeing a
steady nationwide shift away from inpatient care to providers
offering more outpatient services, it seems to me.
Many rural hospitals serve as a central hub of community
service and economic development, but some struggle to keep
their facilities operating in the black in order to meet local
demands for a full range of inpatient, outpatient, and
rehabilitation services.
Resolving these issues is no easy task. Clearly, for some
communities, Medicare's special rural payment structures may
stifle innovations that could pave the way for more sustainable
rural health-care delivery systems.
One consistent theme that we will hear from our witnesses
today is the need for flexibility. They are not asking Congress
for a one-size-fits-all Federal policy. They want the
flexibility to design innovative ideas that are tailored to
meet the specific needs of the communities they serve. They
need the Federal Government to support data-driven State and
local innovations that have the promise to achieve results,
increasing access to basic medical care, lowering costs, and
improving patient outcomes.
But the Federal Government cannot tackle this challenge
alone. And while I was pleased to see CMS release its rural
health strategy earlier this month, I believe that this
administration, led by HHS Secretary Azar, still needs to
improve coordination across the agencies within the Department
to help prioritize new rural payment models while also reducing
regulatory burdens on rural and frontier providers.
State and local officials must be aggressive in their
efforts to design transformative policies and programs that
meet their unique rural health-care needs.
And the Federal Government really needs to listen. We
should listen to what these folks have to say and what some of
the solutions really are.
In my view, States should be the breeding ground to test
new ideas. However, it is not sustainable for every small town
to have a full-service hospital with every type of specialty
provider at its disposal. That is why it is so important for
rural communities to work together, share resources, and
develop networks.
The Federal Government must continue to recognize the
important differences between urban and rural health-care
service delivery and respond with targeted, fiscally
responsible solutions.
By pooling our knowledge, expertise, and financial
resources, we can work together to develop targeted payment
policies that ensure appropriate access while also protecting
Medicare beneficiaries and American taxpayers.
Now, I am looking forward to hearing some of those
innovative ideas from our witnesses here today. But before I
turn to our ranking member, Senator Wyden, I want to bring one
important item to the attention of the committee.
The Medicare Payment Advisory Commission, otherwise known
as MedPAC, has submitted a statement for the record, outlining
the commission's latest recommendation aimed at ensuring access
to emergency services for Medicare beneficiaries living in
rural communities.
I encourage all members to review MedPAC's statement, and
ask that it be made part of the official hearing record.
[The statement appears in the appendix on p. 45.]
The Chairman. With that, let me now turn to my partner on
this committee, Senator Wyden, for his opening statement.
[The prepared statement of Chairman Hatch appears in the
appendix.]
OPENING STATEMENT OF HON. RON WYDEN,
A U.S. SENATOR FROM OREGON
Senator Wyden. Thank you very much, Mr. Chairman.
And first, I want to say right out of the gate that I think
it is very doable to produce a bipartisan product here. We did
that with respect to CHRONIC Care, we did that with respect to
10 years for CHIP. We did it, by the way, in the rural area as
related to Medicare extenders, where we were talking about
literally life-and-death matters like ambulances.
So I want to make sure that we understand that, on this
side, we think it is very doable to come up with a bipartisan
product.
Each year, I hold open-to-all town meetings in every rural
Oregon county. And there, I meet with many leaders from the
health-care field. And they tell me there are a few potential
health-care calamities that have them afraid for what is coming
down the pike.
First, many in rural communities feel that there is a
wrecking ball headed their way because the Trump administration
and half of Congress have spent the last 15 months trying to
pull out all the stops to make enormous cuts to Medicaid. The
President's budget, which, of course, is a public document,
indicates that another assault could be coming.
The fact is, Medicaid is a lifeline for rural hospitals and
patients. And those who have been on the front lines will tell
you--those who have been out there for decades--that if you
want to turn rural America into a sacrifice zone where
hospitals shut down and people cannot get the health care they
need, the fastest way to do it is by slashing Medicaid.
Second, people in rural areas today feel that their local
hospitals are already teetering on the brink of closing their
doors. And if the local hospital goes under, that means no more
emergency departments available in a crisis.
Now, this is not a far-off, theoretical problem. Decades
ago, back when getting routine health care more often meant
spending multiple nights in a hospital inpatient bed, rural
hospitals were much more secure. They could afford then to
maintain the emergency department.
But that service may be on the ropes now because rural
hospitals are under such huge financial pressures. Offering a
variety of inpatient services and keeping that emergency room
open is extraordinarily expensive. And at the same time, more
and more Americans are turning to outpatient settings for
chronic care, rehab, and routine surgeries.
Since 2010, 83 rural hospitals have closed their doors, and
hundreds more are in dire straits.
Bottom line: when you live in a big city, like Portland,
Chicago, or Los Angeles, you take it for granted there is
always going to be an emergency department nearby. But rural
Americans who fear their hospital will be the next to close are
left wondering, what is going to happen if their son or
daughter breaks a leg in a high school basketball game?
I heard exactly that kind of concern just a couple of weeks
ago in rural Oregon. Where would the family go if an older
loved one suffered a stroke? Would they get to a hospital in
time if dad suffers a heart attack?
Keeping these hospital emergency departments open is a key
challenge when it comes to rural health care. In my view, it is
step one when you are working to prevent rural America from
turning into that sacrifice zone where people cannot get the
care they need.
And I will just close with this point. I have already
indicated I think we can produce a bipartisan product here. I
mean, a country as wealthy as ours--looks like we spent about
$3.5 trillion last year on health care. For that amount of
money, you could practically send every family of four in
America a check for $40,000 and say, ``Here, get health care.''
It ought to be possible to guarantee that rural Americans
are not on the outside looking in.
Thank you, Mr. Chairman. I am looking forward to working
with our colleagues and getting that bipartisan product.
The Chairman. Well, thank you, Senator.
[The prepared statement of Senator Wyden appears in the
appendix.]
The Chairman. Let me just set the record straight. The
decline in rural hospitals started long before Medicaid
expansion and prior to the Trump administration, of course.
Rather than touting Medicaid expansion or blaming Trump, I hope
we can set politics aside and evaluate whether Medicare and
Medicaid are yielding an appropriate Federal response to States
and communities. That is, after all, the purpose of this
bipartisan hearing.
We cannot just spend more money on Medicaid and expect to
solve every problem. So I look forward to continued discussion
with our expert witnesses about what more can be done to ensure
Federal dollars are being spent judiciously and wisely to help
our rural hospitals and providers. So we need to do that.
Now, I would like to extend a warm welcome to each of our
five witnesses today. I want to thank you all for coming.
Today we will briefly introduce each of you in the order
you are set to testify. First, we will hear from Dr. George H.
Pink, the Humana distinguished professor in the Department of
Health Policy and Management at the Gillings School of Global
Public Health; deputy director of the North Carolina Rural
Health Research Program; and a senior research fellow at the
Cecil G. Sheps Center for Health Services Research, all at the
University of North Carolina at Chapel Hill.
Prior to receiving his Ph.D. in corporate finance, Dr. Pink
spent 10 years in health services management planning and
consulting.
Dr. Pink holds a bachelor's degree in marketing from the
University of Calgary, a master's degree in health
administration from the University of Alberta, and a Ph.D. in
corporate finance from the University of Toronto.
Our second witness, Dr. Keith J. Mueller, will be
introduced by my good friend and fellow committee member,
Senator Grassley.
Senator Grassley, if you would like to, you can proceed
right now with your introduction.
Senator Grassley. Okay. Before I do that, since rural
hospitals have been brought up, I would like to point out to my
colleagues and particularly to Senator Wyden, because he
brought it up, I have a bill and it goes by the acronym REACH,
that I think about half the Senate is cosponsoring.
And in fact, you may even be a cosponsor of it.
I hope people will look at that, because that is an
alternative to the possible closing of some rural hospitals.
It is my privilege to welcome another Iowan, Dr. Keith
Mueller. Dr. Mueller is a renowned researcher who is an expert
about rural health care. He is the interim dean of the College
of Public Health and a professor of health management and
policy at the University of Iowa. He directs the RUPRI, which
is an acronym for the Center for Rural Health Policy Analysis
at the University of Iowa.
Dr. Mueller has published more than 220 scholarly articles
and has received national recognition for his rural health-care
research.
Welcome, Dr. Mueller.
The Chairman. Thank you, Senator.
Senator Grassley. Yes.
The Chairman. Next to speak will be Ms. Konnie Martin. She
will be introduced by our friend and colleague, Senator Bennet.
Senator Bennet?
Senator Bennet. Thank you, Mr. Chairman.
And thank you so much for holding this hearing.
Rural communities have long been struggling with the
scarcity of health-care providers and facilities. This has
exacerbated the challenge of responding to the opioid epidemic,
which has hit rural Americans particularly hard.
I am pleased to introduce my fellow Coloradan Konnie
Martin, the chief executive officer of San Luis Valley Health,
an independent nonprofit health system in Alamosa, CO. Ms.
Martin has been working to serve the health-care needs of rural
Coloradans in the San Luis Valley for more than 30 years.
Prior to being named CEO in 2013, Ms. Martin served as San
Luis Valley Health's chief operating officer. She completed
advanced leadership training at the Regional Institute for
Health and Environmental Leadership at the University of
Colorado, also the health-care executive program at the UCLA
Anderson School of Business. She graduated from the University
of Arkansas at Monticello.
Ms. Martin also plays a pivotal role in the local
community. She is the Adams State University Presidential
Search Committee's community liaison and a member of the
Alamosa County Economic Development Corporation.
I look forward to hearing Ms. Martin's testimony.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Bennet.
Now, our fourth witness to speak will be Ms. Susan K.
Thompson, who is also from Iowa and who will also be introduced
by Senator Grassley.
So, Senator Grassley, take it away.
Senator Grassley. Sue, it is my privilege to introduce you
to the committee.
She is a senior vice president of integration and
optimization for UnityPoint. Sue was also the CEO of UnityPoint
Accountable Care, a nurse by training, and she is the first
Iowan to be named to the Medicare Payment Advisory Commission--
as you said, Mr. Chairman, known as MedPAC for short.
Sue's professional achievements and expertise will speak
for themselves. However, I would like to say that a part of her
legacy is sitting behind her today, so I am going to talk about
her family, who are involved in rural health care as well.
Nate Thompson is Sue's son. Nate is the CEO of Story County
Medical Center, a critical access hospital in Nevada, IA.
Ashley Thompson is Sue's daughter-in-law and Nate's wife.
Ashley is a government relations specialist for UnityPoint.
Dr. Katelyn Thompson is Sue's daughter. Dr. Thompson is a
psychiatrist working with the Berryhill Center for Mental
Health, a community mental health center in Fort Dodge, IA.
And Chad Baedke is Sue's son-in-law and Dr. Thompson's
husband. Chad is the director of physician billing operations
for UnityPoint clinics.
So, Sue, it seems to me like your family is as much
involved in rural health care as you are. Welcome to the
committee.
The Chairman. Well, thank you, Senator, for providing that
kind introduction.
Our final witness will be Dr. Karen M. Murphy, who will be
introduced by our good friend and colleague, Senator Casey.
Senator Casey. Thank you, Mr. Chairman.
I am privileged to introduce Dr. Murphy. Dr. Murphy is
chief innovation officer at Geisinger Health System. I know her
from our home town. And she has a long record of service in
health care.
She served our State as Pennsylvania's Secretary of Health.
She was president and CEO of the Moses Taylor Health Care
System, which is just blocks from my home.
Her education is substantial: a doctorate of philosophy and
business administration from Temple's Fox School of Business,
an M.B.A. from Marywood University--my mother and my daughter
and my sisters would want me to mention Marywood--a bachelor of
arts from the University of Scranton, and a nursing diploma.
So, whether it is nursing itself, which was her calling, or
a real commitment to the reform in the health-care delivery
system, in so many ways, Karen has brought a passion and a
degree of excellence to these issues that I think is unmatched.
So, Karen, Dr. Murphy, welcome.
The Chairman. Well, thank you, Senator Casey, for rounding
off our introductions.
I would also like to thank the witnesses for being here
today. And in particular, I thank them for their testimony and
in advance for their patience and their flexibility, as members
will be moving in and out of today's hearings because we have
other markups going on right now.
I have two or three markups going on right now. Personally,
I have to leave to attend a Judiciary Committee markup.
Now, with all of that out of the way, Dr. Pink, we will
begin with your opening remarks.
Dr. Pink?
STATEMENT OF GEORGE H. PINK, Ph.D., DEPUTY DIRECTOR, NORTH
CAROLINA RURAL HEALTH RESEARCH PROGRAM; SENIOR RESEARCH FELLOW,
CECIL G. SHEPS CENTER FOR HEALTH SERVICES RESEARCH; AND HUMANA
DISTINGUISHED PROFESSOR, GILLINGS SCHOOL OF GLOBAL PUBLIC
HEALTH, UNIVERSITY OF NORTH CAROLINA, CHAPEL HILL, NC
Dr. Pink. Chairman Hatch, Ranking Member Wyden, and members
of the committee, thank you very much for the opportunity to
testify today on behalf of my colleagues at the North Carolina
Rural Health Research Program and the Gillings School of Global
Public Health at the University of North Carolina at Chapel
Hill.
We research problems in health care and rural health-care
delivery and are funded primarily by the Federal Office of
Rural Health Policy.
I am here to discuss what we know about rural hospital
closures. And I will start with an all-too-common story.
Coalinga Regional Medical Center in Coalinga, CA is a 24-bed
acute care hospital with 200 employees. On May 1st, it
announced that after 18 months of losses totaling $4.5 million,
it is insolvent and will close all services in June.
The closure will leave residents in the rural Fresno County
city of 17,000 people without an emergency room. The nearest
hospital is Adventist Health in Hanford, which is over 40 miles
away.
Coalinga will be the second hospital in the San Joaquin
Valley to close in the past 6 months. Tulare Regional Medical
Center, a 112-bed hospital, closed 6 months ago.
Across the country, 125 rural hospitals have closed since
2005--83 since 2010.
Why is this happening? For many reasons, but long-term
unprofitability is an important factor. Years of losing money
results in little cash, debt payments that cannot be made,
charity care and bad debt that cannot be covered, older
facilities, and outdated technology.
Why do they lose money? Small rural hospitals serve
patients who are older, sicker, poorer, and more likely to be
un- or under-insured. They staff emergency rooms often in
communities with small populations and low patient volumes.
Combine this with reimbursement reductions, professional
shortages, and many other challenges, and you can see why I
prefer being a professor to a rural hospital executive.
What happens after a closure? Some convert to another type
of health-care facility, but more than one-half no longer
provide any health-care services. They are parking lots, empty
buildings, and apartments.
Patients travel an average of 12\1/2\ miles more to the
next-closest hospital, but many travel 25 miles or more. For
the old, poor, and disabled who cannot afford or do not have
access to such transportation, these distances can be very real
barriers to obtaining needed care.
Who is most affected? We have investigated communities
served by rural hospitals at high risk of financial distress,
because they may be the next facilities to close. These
communities have significantly higher percentages of people who
are black, unemployed, lacking a high school education, and who
report being obese and having fair-to-poor health. In other
words, vulnerable people.
If the hospitals that serve these communities reduce
services or ultimately close, already-vulnerable people will be
at increased risk.
What can be done? We can try to improve what we have by
exploring ways to better target Medicare payments at rural
hospitals in greatest need and where closure would have the
greatest adverse consequences on the communities.
Preferably, we should develop something new. At meetings
around the country, the most common frustration I hear is the
lack of a model to replace a distressed or closed hospital. We
have acute care, inpatient hospitals with emergency rooms on
one end, and we have primary care clinics on the other end. We
need something in between.
There is no shortage of innovative ideas. Eight to 10 new
rural models have been proposed by various organizations. The
profound challenges facing providers that serve rural
communities are not going away. We need to step up the pace of
innovation, faster evaluation and implementation of new models,
and development of the Medicare policies and regulations that
will allow and sustain them.
Thank you again for the opportunity to discuss these issues
with you today, particularly because, during the past 35 years,
some of the most innovative and effective developments in rural
health policy have emerged from the Senate Finance Committee.
The Chairman. Well, thank you so much.
[The prepared statement of Dr. Pink appears in the
appendix.]
The Chairman. We appreciate having you here, and we
appreciate your expertise.
Dr. Mueller, we will turn to you now.
STATEMENT OF KEITH J. MUELLER, Ph.D., INTERIM DEAN, COLLEGE OF
PUBLIC HEALTH; DIRECTOR, RUPRI CENTER FOR RURAL HEALTH POLICY
ANALYSIS; AND GERHARD HARTMAN PROFESSOR OF HEALTH MANAGEMENT
AND POLICY, UNIVERSITY OF IOWA, IOWA CITY, IA
Dr. Mueller. Chairman Hatch, Ranking Member Wyden, members
of the Finance Committee, thank you for this opportunity to
share my perspectives on key issues in rural health and related
policy considerations.
While some things have changed in the 30 years I have been
conducting rural health research and policy analysis, the
underlying dynamics remain much the same. But we have new
tools, both in health-care delivery and through public policy,
to help us continue our quest to establish a high-performance
health system in rural America.
We have had an interesting ride in policy debates and
developments over that time, including weathering the aftermath
of creating prospective hospital payment in the 1990s,
considering health-care reform in those years, major changes in
Medicare payment and benefits, changes through the Patient
Protection and Affordable Care Act, and now a renewed and
welcome discussion of what we should be doing to best serve the
needs of rural residents.
I have benefited from exchanges with this committee and
others throughout, starting with a conversation Senator Roberts
and I had when I testified as part of the RUPRI Health Panel,
which I now chair, to the House Committee on Agriculture in
1993.
We provided analysis of five reform proposals, including
the Health Security Act, by assessing their impacts on key
rural considerations.
Senator Roberts may remember--and it looks like he does--
sharing an appreciation for the straightforward analysis that
we provided, which helped give me the confidence to continue
bringing forward the best we can offer from policy analysis.
Of course, then-Representative Roberts may not have liked
the thumbs-up, thumbs-down table of our conclusions that my
local newspaper provided displayed during the hearing.
The RUPRI Health Panel launched in 1992 to bring rural
dimensions front and center in policy discussions. We provided
analysis during development and implementation of major
national policies, including the Balanced Budget Act of 1997,
the MMA that Senator Hatch referred to in 2003, and, of course
PPACA in 2010.
We provided feedback to this committee and others during
policy formation and followed up with analysis of rural impacts
of new policies, including calling attention to unintended
consequences of the BBA in 1997 before that term was as
ubiquitous as it is now.
I have come to appreciate the nexus of what we do in the
research community with the concerns and needs of our
colleagues developing health-care services.
As president of the National Rural Health Association in
1996, I represented the needs of rural providers in policy
discussions.
One of my funded projects in the early 1990s was working
with providers in Nebraska and Iowa to develop a template for a
provider-sponsored Medicare+Choice plan. Much of my research
now involves visits to rural health-care organizations to
understand the implications of Medicare and other policies on
what they do.
My engagement and that of the RUPRI Center, the RUPRI
Health Panel, the Rural Telehealth Research Center based in
Iowa, and collaboration with others covers a host of specific
topics of interest to this committee, including Medicare
Advantage, rural ACOs, rural pharmacy, implications of changes
in health-care delivery and organization, delivery system
reform initiatives, the evolution of the marketplace in health
insurance coverage, and the role of telehealth.
My written testimony includes specific research findings on
some of those topics, along with policy considerations.
I would like to share some important questions to consider
for the future of the Medicare ACO program.
Are there benefits other than savings related to changes in
delivery models that help achieve the triple aim of patient
experience, better health, and lower costs?
Should there continue to be different tracks?
Should variations of advance payment, perhaps as grants,
continue to be available?
Finally, what is the next iteration of payment reform that
builds from the experiences of ACOs? Perhaps global budgeting,
which we will hear about later.
I now offer the RUPRI Health Panel's five rural
considerations for policies designed to encourage delivery
system reform. One, organize rural health systems to create
integrated care. Two, build rural system capacity to support
integrated care. Three, facilitate rural participation in
value-based payments. Four, align Medicare payment and
performance assessment policies with Medicaid and commercial
payers. And five, develop rural-appropriate payment systems.
In general, policies should be sensitive to the rural
practice environment, including population density, distance to
providers, and the need for infrastructure investment.
New models can build on the strengths of the rural system,
notably primary care.
Thank you for this opportunity, and I look forward to your
questions.
The Chairman. Well, thank you.
[The prepared statement of Dr. Mueller appears in the
appendix.]
The Chairman. We appreciate having your testimony here
today.
So we will go to Ms. Martin now at this point.
STATEMENT OF KONNIE MARTIN, CHIEF EXECUTIVE OFFICER, SAN LUIS
VALLEY HEALTH, ALAMOSA, CO
Ms. Martin. Thank you for the opportunity today to share
our health-care story.
I am the CEO of a small health-care system located in the
San Luis Valley, which is a rural, agriculture-based community
in southern Colorado. We serve six counties, an area roughly
the size of Massachusetts, and are the safety net for our
nearly 50,000 residents.
Two of our counties are the poorest in Colorado. Nearly 70
percent of our patients are covered by Medicare or Medicaid,
with less than 20 percent having commercial insurance.
With this challenging payer mix, we have a constant
struggle to remain financially viable. SLV Health and the rural
hospitals around the country are appreciative of this
committee's commitment to rural communities, and we are hopeful
that meaningful help is on the way.
Our system is comprised of a 49-bed sole community hospital
and a 17-bed critical access hospital. We operate five rural
health clinics, two of which are provider-based. This past
year, we provided 2,500 hospital visits, 58,000 outpatient
services, and over 65,000 clinic visits.
We are a level-three trauma center and the only facility
that delivers babies, provides surgery, or has any type of
specialty care for 120 miles in any direction.
We serve veterans, farm workers, college students,
tourists, and our own friends and families. We are a resilient
and creative team of health-care providers.
We are the largest employer in our region, with a staff of
over 800. Many of them have lived in the community their entire
lives, and their families for generations.
As for me, I moved to the valley in 1985, and I began my
health-care career in an entry-level IT position, back when the
personal computer was new technology, and have worked my way
into the current CEO role.
Our staff struggles with the cost of meeting regulatory
requirements, which are often different and sometimes
conflicting across payers. Our system must report on dozens of
measures for the Medicare quality and pay-for-performance
programs. However, our private insurers ask us to report yet
more, sometimes on the same topic, but using a different
definition. This complex and confusing data reporting takes
time away from what really matters, which is delivering on our
health-care mission.
Recruiting and retaining a qualified workforce is another
challenge for rural providers. We have been fortunate to form
partnerships with local and State schools that help develop and
maintain our workforce. Specifically, we have multiple grow-
your-own programs, from paramedic training to hosting medical
students, internships, and mentoring those who are pursuing a
health-care M.B.A.
We collaborate with the local community health center to
host a rural residency training track program. We are set to
have the first two physicians complete this training in June of
2019.
We do have our workforce success stories to celebrate as
well, with two family medicine physicians in our system who
returned to their childhood homes to care for friends and
neighbors, and we have a physician who came during college to
serve as a volunteer in a local shelter, and today he is a
surgeon in our organization.
Rural communities pride themselves on hard work and taking
care of their own. However, Federal payment systems and
delivery models must recognize the unique circumstances of
providing care in a rural community, and they must be updated
to meet the reality and challenges of how health care is
delivered today and into the future.
About 10 years ago, the critical access hospital that is
part of our system now, approached us for help. Nearing closure
and in dire financial condition, we entered into a partnership
to provide management services and financial support.
In 2013, this critical access hospital fully merged into
the system that is today San Luis Valley Health. This type of
arrangement prevented a hospital closure, but such partnerships
are not available to many rural hospitals. We see the result,
with hospital closures across the country, and today, 12 rural
hospitals in Colorado are operating in the red.
Therefore, I am here today to ask for your support and
consideration for new financial models that consider our needs,
including the creation of a 24/7 rural emergency medical center
designation, such as the American Hospital Association has
recommended and Senator Grassley has championed.
And I ask you to provide appropriate resources,
flexibility, and ongoing dialogue with those of us in rural
America who stand ready to innovate, work hard, and meet the
current challenges of caring for our friends and neighbors.
In a country as great as ours, where you live should not
determine if you live.
Thank you.
The Chairman. Thank you so much.
[The prepared statement of Ms. Martin appears in the
appendix.]
The Chairman. Ms. Thompson, we will turn to you now.
STATEMENT OF SUSAN K. THOMPSON, M.S., B.S.N., R.N., SENIOR VICE
PRESIDENT, INTEGRATION AND OPTIMIZATION, UNITYPOINT HEALTH; AND
CHIEF EXECUTIVE OFFICER, UNITYPOINT ACCOUNTABLE CARE, WEST DES
MOINES, IA
Ms. Thompson. Thank you and good morning. Thank you for
this great opportunity to address the committee on several of
the challenges facing health care in rural America and to offer
up some ideas for potential solutions.
Now, I would be remiss if I did not take this opportunity
to publicly thank our Senator from Iowa. Senator Grassley has
made access to quality health care in rural regions of our
country a relentless priority.
Thank you, Senator, for everything you do for Iowa and for
our country.
Before assuming my job at the corporate office of
UnityPoint Health, I was the CEO of a small health system
affiliated with UnityPoint in Fort Dodge, IA. Trinity Regional
Medical Center is a 49-bed hospital, including a group of
physician clinics and home-care services that over the years
have held the designations of a 200-bed PPS hospital, a sole
community hospital, a rural health clinic, and most recently, a
tweener as it participates in the rural demonstration program.
Trinity has formal management agreements with five critical
access hospitals and close referral relationships with sister
UnityPoint metropolitan markets, including Des Moines. But
possibly the most unique experience Trinity has participated in
to date has been as a Medicare Accountable Care Organization,
an ACO.
Classified as a Pioneer ACO, Trinity took responsibility
for improving the quality and lowering the total cost of care
for approximately 10,000 Medicare beneficiaries attributed to
them in this rural northwest Iowa community. They did this
successfully and continue to do so as a next-generation ACO.
It is through this work that challenges facing rural health
communities, hospitals, and providers have become so palpably
clear to us.
The first challenge to highlight is the dichotomy in
incentives that exists between those who operate under total-
cost-of-care programs, like ACOs, Medicare Advantage plans, and
bundled payment programs, and their rural counterparts, who
operate under fee-for-service, cost-based reimbursement
methods.
While the former looks to keep members healthy and out of
the hospital, the latter is rewarded when hospital beds are
full of Medicare patients. If the two groups worked in
isolation of each other, this might work. But they do not. They
are intrinsically woven together.
The beneficiaries attributed to the Trinity Pioneer ACO
move in and out of the rural facilities in the region.
When regarding value-based payment models, the rural groups
would ask, ``Where do we fit in?'' And to date, the answer to
that question has been, ``You do not.''
The policy approach has been to exempt them from value-
based policy altogether. We submit that this approach is not
working and needs to change. Rural health care can fit into
value-based payment models.
So you wonder, is UnityPoint Health advocating that cost-
based reimbursement be deconstructed? And to that, we answer
``no.'' We are requesting it be renovated.
This brings me to the second challenge I must highlight,
and this challenge is the greatest: access to health-care
services in rural areas.
Bringing quality care to rural Americans comes at a cost,
and the cost is distinct from the actual provision of the
medical service. These additional, unique costs relate to the
time and the distance from major service centers, lack of
comprehensive community services, and health-care workforce
dead zones.
We propose that the renovation of health-care delivery in
rural areas include a value-based component tied to quality
medical outcomes and expenditures and that a separate and
distinct payment structure be developed for the portion of
cost-based reimbursement that pays for the costs associated
with access in rural areas.
While our written testimony goes into greater detail about
how such a system could be structured, I offer you some playful
dos and just one do not as we design this type of system.
The dos: Do encourage the CMS Innovation Center to develop
pilots that test Medicare Advantage programs designed to work
in rural markets like Iowa. We see great potential for Medicare
Advantage to bring the benefits of population health methods to
rural areas.
Do design ACO benchmarks to accommodate for the additional
cost of bringing access to rural markets.
And do support bills, like the REACH Act, that allow rural
hospitals to transition to new designations designed to meet
modern needs.
And do continue to allow telehealth practice to extend the
reach of our in-person providers.
And with the utmost respect, just one do not. Do not
embrace a policy that allows freestanding ambulatory surgery
centers to establish residence in rural markets and cherry-pick
patients by procedure, further straining the viability of
community hospitals.
I challenge you to find one for-profit, freestanding ASC
that has an emergency room.
In closing, health-care entities are the backbone of many
of our rural communities. We need our rural health-care
delivery systems to be viable. We need them to make the
transition to rural health-care access centers we know they can
become.
Thank you for this opportunity to share these views.
The Chairman. Thank you.
[The prepared statement of Ms. Thompson appears in the
appendix.]
The Chairman. Dr. Murphy, we will turn to you. You will be
our final witness.
STATEMENT OF KAREN M. MURPHY, Ph.D., R.N., CHIEF INNOVATION
OFFICER AND FOUNDING DIRECTOR, GLENN STEELE INSTITUTE OF HEALTH
INNOVATION, GEISINGER, DANVILLE, PA
Dr. Murphy. Chairman Hatch, Ranking Member Wyden, and
members of the committee, thank you for inviting me to testify
today about rural hospitals.
In addition to my clinical background, which you have
already heard, I spent 2 years at CMMI before assuming my role
as Secretary of Health, working on the State innovation models
initiative.
Today I would like to share the development of an
innovative payment and delivery model that was developed when I
served as Secretary of Health in Pennsylvania.
I began my tenure as Secretary of Health assessing the
status of the health-care delivery systems in Pennsylvania. I
was struck by the financial instability of the rural hospitals.
In research, I found that the situation in Pennsylvania was
being replicated across the country.
Pennsylvania has the third-largest rural population in the
United States. Sixty-seven of our 169 hospitals in Pennsylvania
are in rural communities. More than 58 percent of those
hospitals in rural areas have mounting financial pressure
resulting in break-even or negative operating margins.
We began to look for a solution.
After having worked on the Maryland all-payer model while
at CMMI and seeing the impressive results, we decided to design
a similar model for rural hospitals in Pennsylvania.
We worked collaboratively with CMMI on designing the model.
I would also like to acknowledge Senator Casey and his office's
support as we designed this model.
The design period was launched in January of 2017. The
objective of the model was to provide a path to improving
health and health-care delivery in rural communities.
The model changes the way participating hospitals will be
reimbursed. The model replaces the current fee-for-service
system with a multi-payer global budget based on the hospital's
historic net revenue.
Like Maryland, the payment model in Pennsylvania is
designed to include all payers. However, it was necessary to
develop a new methodology, since Maryland has the authority to
establish hospital rates and Pennsylvania does not.
The model moves rural hospitals from focusing inpatient-
centric health-care services to a greater focus on outpatient-
centric health-care services, with an emphasis on population
health and care management.
It replaces the current fee-for-service system, with little
emphasis on quality and safety, to a payment model that
includes direct incentives to improve quality and safety and
eliminate subscale service lines.
Rural hospitals are encouraged to move from traditional
models delivered directly on-site to innovative care models
that are enabled by technology, such as telehealth, video
conferencing, and remote monitoring. The vision is that rural
hospitals will invest in care coordination, such as reaching
out to patients who frequently use the emergency room services
and connecting them with a provider.
It also includes population health and preventative care
services, such as chronic disease prevention programs and
behavioral health initiatives, including those targeting
substance abuse disorder, with the expansion of medical homes
to include medication-assisted treatment programs.
Participating hospitals will have the ability to invest in
social services that address community issues that lead to
detrimental health outcomes.
Based on the global budget, participating hospitals are
expected to develop a transformation plan that could outline an
innovative approach to improving health and health-care
delivery for the communities they serve.
They are encouraged to work with community agencies, such
as United Way, area agencies on aging, and drug and alcohol
treatment centers, to develop services based on their community
needs.
To provide participating hospitals with transformation
support, Pennsylvania plans to create a Rural Health Redesign
Center.
CMS has entered a cooperative agreement with Pennsylvania
to provide up to $25 million over 5 years to support the Rural
Health Redesign Center. This will provide a way to deploy
capabilities to support all participating hospitals.
Pennsylvania is planning to engage six hospitals in the
initial performance year, gradually expanding to 30 rural
hospitals in Pennsylvania.
At Geisinger, we are a participant in the initial phase.
Dr. David Feinberg, Geisinger's CEO, has been a staunch
supporter of the initiative since its inception, as it builds
on our vision for building a health-care delivery system that
focuses on improving health and value-creation for each
community we serve.
We are looking forward to working with the State on this
very important initiative.
The financial challenges of rural hospitals today are the
result of a changing health-care industry. They may not be able
to offer the same services that they did in the past, but it is
possible that they can be leveraged to improve the health of
those residing in rural communities.
Next week, I will be speaking at the Global Budgeting
Summit at Johns Hopkins University. Twenty-six States have
registered to participate. The Federal Government has the
opportunity to engage additional States in the Pennsylvania
rural health model. Implementing across diverse States would
give us the opportunity to evolve this innovative payment and
delivery model.
Thank you for your interest in aiding rural hospitals. I
too believe rural communities deserve access to health care,
and we must continue to work to identify innovative approaches
that are a pathway to that goal.
The Chairman. Well, thank you so much.
[The prepared statement of Dr. Murphy appears in the
appendix.]
The Chairman. I think this testimony has been very
interesting today.
Let me just start with you, Ms. Martin.
In your testimony, you referenced times when your hospital
system has been on the verge of financial crisis in the past.
How did you leverage resources and streamline service delivery
or operation lines to stay financially viable? And can you talk
about what you think an appropriate Medicare margin should be
for small, nonprofit, rural hospitals like yours?
Ms. Martin. Thank you, Senator.
I think it is interesting when you talk about margins for
rural hospitals. I think any margin would be helpful to so many
rural hospitals.
I think for my system, located in the rural part of
Colorado, if we can be in a margin area of 3 to 5 percent, we
consider that a very successful year.
And so I think different areas have different needs. So
much depends on your infrastructure and what you need to
replace as far as equipment and facilities go. So I think for
our system and from my perspective, that is the margin that we
are trying to achieve. But so many times, we are under 1
percent or sometimes in the negative.
I think what we did initially over these past few years is
put our two systems of care together, the critical access
hospital and our sole community hospital. And we used the
economies of scale. You know, we have one CEO for that rural
system of care, we have one finance department, we share a lot
of services between our two organizations, and that makes it
cost-effective to run the different departments.
You know, we have a person who is an expert in laboratory
or a person who is expert in imaging, and they help a larger
organization when you can divide them across a couple of
communities.
The other thing we do is, we are just very frugal. I think
in rural America, we are very thoughtful about what we buy. We
do not provide services that our community does not need,
because we do not have that luxury. We have to match our
services to the needs of our community.
We have built our primary care base over these past few
years, and that has made a substantial difference with keeping
our care close to home. And we have added specialty services
that are the highest need for our patients and our community.
For instance, we have added oncology services in the past 3
years. We started out with a model where we brought a
specialist a day or two a month, and we have built that to
where we could have a full-time provider.
I think part of our challenge is, with one single
specialist in a rural community, you know, you have to have the
connections to have coverage and support for that individual.
So those have been some of our strategies. We are not a
lucrative health system at all.
The Chairman. Well, thank you.
Let me go to you, Dr. Murphy.
First, let me say that there is a lot of excitement around
the Pennsylvania rural health model. It clearly holds great
promise. And I am personally pleased to see CMS working with
States to design innovative rural health-care payment
strategies.
Is there any concern under Pennsylvania's new multi-payer
global budget payment method that rural hospitals might lose
incentives to be efficient in providing health-care services?
And secondly, how do you think your State's rural hospitals
will figure out ways to lower costs and improve health outcomes
if they already know what they are going to get paid for
procedures under the global budget?
Dr. Murphy. Well, thank you, Senator. And I think the
challenge--which is why I recommend that CMMI look to expand
the test--is to determine if we can successfully transform
rural hospitals in a way that is efficient and improves
population health as well as health-care delivery services.
There is a monitoring component within the global budget
methodology--the model is being evaluated from day one--that
will determine the appropriateness of the services and the
possibility for unintended consequences to occur. So that is
built in within the test of the model.
But I think the goal here--the difference is there is a
transformation plan that goes along with the global budget with
monitoring metrics throughout the life of the global budget. So
the hospital is going to be very tightly monitored as we go
through implementing the global budget.
I can assure you that certainly Medicare would be concerned
about that, as would all the other commercial payers.
So I believe the model is robust in the way that it will
measure for those unintended consequences.
The Chairman. Well, thank you.
Let me turn to Senator Wyden.
Senator Wyden. Thank you very much, Mr. Chairman.
I think this has been a terrific panel.
And next week when I have open-to-everybody town meetings
in Prineville, Paisley, and Joseph, OR, I am going to remember
what you said, Ms. Martin, that where you live should not
determine if you live.
And I can just tell you, I looked around the room and
practically the whole place got whiplash when you said that,
because that really sort of sums up the challenge.
Colleagues, let me give you my sense of where we are in
terms of the bipartisan possibilities going forward. We had the
Bipartisan Budget Act, we got 5 years additional funding for
several important programs for rural communities, extending the
Medicare-dependent hospital program, increasing payment for
low-volume hospitals, and, as I touched on earlier, the
ambulance add-ons. So that at least gives us some measure of
predictability for the next 5 years.
But it seems to me we have really got some heavy lifting to
do in the next 5 years. I think we understand that this
calamity did not arrive on us in 15 minutes; we are not going
to solve it in 15 minutes.
So what I would like to do for purposes of going forward in
a bipartisan way here under the efforts of colleagues on both
sides is, I would like to just go down the row and have each of
you give me what would be your top priority for Medicare as it
relates to longer-term stability for rural providers and
particularly for rural seniors in our country. Because we know
that we have a disproportionate number of seniors in rural
communities.
So right down the row: top priority for Medicare for this
long-term stability that we have a chance to work on, because
we have at least a little predictability for the next 5 years.
So just go right down the row.
Dr. Pink. Thank you, Senator. We have talked to people in
communities where rural hospitals have closed, and almost
always the first thing we hear is the disappearance of the
emergency department, the emergency room.
So I would say my top priority is maintaining access to
emergency care.
Senator Wyden. Good.
Dr. Mueller?
Dr. Mueller. I would say mine would be building that
integrated system that I talked about that would include non-
hospital-based services, particularly both post-acute care
after a hospitalization and care for the elderly with chronic
conditions, which was, in part, addressed by the CHRONIC Care
Act. And we need to move forward with some of the innovations
that are coming out of that.
Senator Wyden. Good.
Ms. Martin?
Ms. Martin. The flexibility to develop a model in each
rural community that meets their needs so that they can keep
emergency care and can keep services.
Senator Wyden. That is a very good point. What would be
your top priority for flexibility? Because we are all
interested in that.
Ms. Martin. Right. I think it would be to allow critical
access hospitals to develop, to merge into a different model,
which would limit their need to have inpatient beds and to be
able to be emergency departments and do outpatient care and
keep the financials healthy in that model.
Senator Wyden. Good.
Ms. Thompson?
Ms. Thompson. Top priority would be recognition of the
difficulty in acquiring and retaining providers to rural
communities.
Senator Wyden. So if you could wave your wand, what would
we pursue, because that is enormously important. What would we
do by way of provider policy?
Ms. Thompson. Rural health care and rural communities
create an environment that is unique in this country. The
community cares for each other. And I think the opportunities
that are before us that have been demonstrated in some of our
ACO models create not only an integration of hospitals and
physicians, but in all components of health care across the
continuum, this kind of an environment that is motivating, that
is inspiring, and I think, quite frankly, could create a
platform for transforming health care for the country.
Senator Wyden. Let us do this, because I want to give Dr.
Murphy the chance to wrap up this round.
I would like to--and the chairman is always very gracious
about this--let us keep the record open for you all to give us
as many concrete ideas for getting more providers to rural
America, because this is enormously important. And we have
tried loans, and we have tried this and that.
And look, we all understand that year after year we are
faced with this question of whether there is going to be
anybody to keep the lights on. In other words, you have
buildings and light, but you have to have people who can run
them.
Dr. Murphy, your one priority for Medicare as we kind of
use this period where we have 5 years to kind of really push
hard for the longer term?
Dr. Murphy. Expand the test for global budgets to different
States.
Senator Wyden. Very good.
Mr. Chairman, thank you. Only 7 seconds over.
The Chairman. Okay.
Senator Roberts?
Senator Roberts. Thank you, Mr. Chairman. I am very
grateful that we are holding this hearing on rural health care
in America. It is long overdue that Congress tries to focus on
the unique needs, as espoused by all the witnesses, of people
in rural areas, the health-care challenges faced by these
constituents.
I have the privilege of serving as the co-chair of the
Senate Rural Health Care Caucus, along with the ever-
enthusiastic and helpful co-chairman, Senator Heidi Heitkamp of
North Dakota. We have very similar problems or challenges--we
do not have problems, we have challenges.
We have long said that rural residents deserve the same
quality health care as their urban counterparts. I think every
witness has gone over that. There is no reason why rural
communities should be left behind as other areas continue to
advance their health-care systems.
Dr. Mueller, thank you so much for reminding everybody that
I was here in 1993, as you were. [Laughter.]
And that indicates that this has really been a long-term
battle. I can remember clear back when it was not HHS, it was
HEW, Secretary Joe Califano.
I think you remember the time that, all of a sudden there
was a regulation that came out that said that, before any rural
hospital could receive a Medicare reimbursement, three doctors
had to review all of the patients that came in and the
procedures. And the team of three doctors had to do this every
24 hours. That was ludicrous. I do not know who came up with
that.
But then I decided it would be a good thing to be for that,
because maybe one of the doctors would stay if in fact they
were inspecting the hospital. But it has been a long-term
effort.
I want to focus--by the way, we have 86 critical access
hospitals in Kansas. And I hope that when we renovate--I think
Ms. Thompson said we should renovate, we should not eliminate.
We are on first base or second base, you know, trying to
hold on. I do not want to get picked off by all of a sudden
saying ``no'' to the critical access or moving to some other
thing without really knowing where we are going.
I want to really concentrate on the workforce situation.
And I would like you all to comment on that.
Recruiting, training, and retaining staff are some of the
biggest challenges we have. An example in some areas--our
physician assistants, our nurse practitioners may be the only
primary care providers available.
We have to drive quite a few miles to get to that hospital,
like you have in Alamosa, Ms. Martin.
In Wyoming, they have to travel a couple hundred miles
maybe to do that.
So let us go down the panel and say--the one thing that I
am really interested in is the Federal regulations that come
between the provider and the patient. I am talking about the
96-hour rule, I am talking about the face-to-face regulations,
things that just do not--it just takes a terrible amount of
time and expense.
And if you could really focus on that, what suggestion
could you make? And we will start with Dr. Pink.
Dr. Pink. Senator, I would defer that question to my
colleagues who have much more expertise on that than I do, if
that would be all right.
Senator Roberts. That would be fine.
Dr. Mueller?
Dr. Mueller. Two suggestions. One is looking at Medicare
conditions and participation and what is required for
supervision. The kind of thing you alluded to from the Califano
years still exists today.
And second, whatever we can do to open up even more the use
of telehealth services to support the local rural health-care
professionals. And we have some of that, as I mentioned
earlier, in the CHRONIC Care Act to work with.
Senator Roberts. You mentioned telemedicine.
And I am not trying to interrupt, Ms. Martin.
But there were three unique places where telemedicine was
to start out. This is back in the 1980s. One was in New Mexico
with an Indian reservation, another was an island in Maine, and
then the third one was Cimarron, KS between Garden City and
Dodge.
And they were selected. We were about to announce that, and
then all of a sudden they called up and said, ``Do not announce
that, we found a doctor.'' After all that hard work, I was very
upset that they had found a doctor. And sure enough, the doctor
came.
And they were not like your doctors, the two that came
back. Six months, that doctor was gone. And in the meantime, we
lost the opportunity for the telemedicine.
Now we have it back, and it is just, you know, very
typical.
Now, you have two doctors who came back because they
believed in their community and they wanted to live in a
community where they could raise their family and all the good
things that have been referred to by Ms. Thompson.
But on the Federal regulations side, which one would you
pick?
Ms. Martin. I think I would pick aligning quality measures
so that, as we measure value in rural communities it is with
measures that are relevant to who we are and what we provide.
Right now, we report so many different measures to so many
different agencies. And they are not meaningful always in
moving us ahead with our quality. For instance, some of the
things we report on, the volume that we do, is so small that
one single fallout appears to make us look like we have a
lesser quality than maybe our urban counterparts, and that is
just simply not true. So I think that is a very important
point.
And then the point with meaningful use. You know, the
evolution of meaningful use has certainly improved the use of
technology in the health-care industry, but the pace at which
the change is happening and the expense that it takes rural
facilities to keep up--I worry about those kind of measures
really getting between the doctors and their patients.
Senator Roberts. Ms. Thompson?
Ms. Thompson. Yes, consistent with my concerns around
access for providers, I would strongly recommend continuing to
expand the use of telemedicine.
Senator Roberts. Dr. Murphy?
Dr. Murphy. I think the two I would give--I think the
relaxation of Medicare regulations in terms of allowing rural
hospitals to maybe execute more innovative strategies in
recruiting physicians. So we have some rules that prohibit
that.
And secondly, I think the relaxation or the acceleration of
the ability of the Medicare program to waive certain
requirements for rural hospitals on their overall management.
And CMMI does--
Senator Roberts [presiding]. I thank you all for your
testimony.
Senator Enzi?
Senator Enzi. Thank you. And I appreciate that this hearing
is being held, and I appreciate the great talent that we have
put together to do it.
I come from the least-populated State in the Nation. Our
biggest city is 60,000. And all of our towns are at least 40
miles apart. We only have 19 towns where the population exceeds
the elevation.
I have one county that is the size of Delaware. And the
city--and you get to be a first-class city when you hit 2,500
people, and they just did--is 2,500 for the whole county. So we
just tried to keep a hospital open there, which usually means
having a physician assistant. So this is a critical hearing for
us.
And I will begin my questions with Ms. Thompson.
The way Medicare pays rural hospitals, including critical
access and sole community, like we have in Wyoming, is closely
related to inpatient services. As medical providers have
started to shift towards providing more and more services on an
outpatient basis, is the inpatient metric still the most
appropriate measure for hospital costs?
Ms. Thompson. I think that is a great point. I am not
certain that it is.
You know, when we began our work in the Pioneer ACO, the
entire question around utilization of inpatient services was
very much at hand, because that is very much what drives the
predominance of spend and what calculated the PMPM. And in the
contract with the Federal Government in the ACO, we essentially
made a promise that we were going to reduce that total cost of
care while improving quality to the Medicare beneficiaries.
As a result of a lot of focus, work, and investment in
reducing spend, we reduced inpatient utilization, and a lot of
these services moved to outpatient. And what I think is more
important in terms of the takeaway for this hearing is not that
we reduced the spend or that we improved the quality--both
quite important and both predominant components of the
agreement in terms of the ACO.
What we learned--and what I believe is so important as we
rethink policy around rural health care--is how strong and how
absolutely woven together a rural community is in commitment to
caring for its patients.
And in that lies some secret sauce in terms of how we
rethink, not just payment for hospitals or how we think about
inpatient or payment for physicians or payment for home care--
which is typically how we think about policy development--but
rather, how we look at an organized system of care of a defined
community, whether it is a rural hospital with six counties
they are serving, and create an accountability and motivate a
community to want to come together, whether in a global payment
model or in some model that gets us out of this siloed way of
thinking about how we organize payment structure in rural
America.
And in that way of thinking, I believe we will transform
not only how we pay for care, but how care is delivered and how
we recreate an entirely new health-care system.
That, to me, is the most important thing.
Senator Enzi. I am running out of time.
Ms. Thompson. I am sorry.
Senator Enzi. Thank you very much.
For Dr. Murphy: Medicare used to allow States to decide
whether to designate hospitals as critical access. I understand
we have prohibited State-based designations because of concerns
they were overutilized, but we allowed hospitals that had
already earned that State-based designation to keep it.
In cases where the critical access designation may have
been overutilized, how do hospitals compare to the CMS
definition of a critical access hospital?
Dr. Murphy. So I think the definition of critical access
hospitals, Senators, and their impact on whether a hospital is
a CA or a non-CA, is probably outdated to even think about.
Because the problems suffered by rural hospitals today are
really because the health-care industry has changed.
And critical access hospitals, whether they are designated
or not, they still have the same--all rural hospitals have the
same problem. They have few resources to deliver any type of a
substantial inpatient care. They are devoting all their
resources to inpatient care for a very small number of
patients.
The critical access hospital designation was definitely a
plus for hospitals 2 decades ago, but I think what we are faced
with today is that any type of assistance to hospitals that
exists in a fee-for-service environment, regardless of where it
is tied, is going to lead us to the same place, sitting here 2
years from now, if we do not take a look at an innovative
payment model.
Senator Enzi. Thank you.
And I have some more questions, and if we have a second
round, I will do those. Otherwise, I will submit them.
I appreciate all the expertise that we have here. My time
is expired.
Senator Roberts. Senator Cassidy?
Senator Cassidy. Now, folks, I am a physician, and I have
worked in a hospital for the uninsured and often interfaced
with my colleagues who are in an emergency room at some
understaffed critical access hospital, but so understaffed that
they frankly had to send all their patients to the hospital
where I worked.
And so a lot of what I will say now will reflect that
perspective.
Let me first go here. I am interested in the Medicare wage
index in which hospitals with a higher cost structure get more.
If you will, the more get more.
Now it seems as if under current law, based upon your
geographic area, rural hospitals in my State cannot compete
with the urban hospital because of Medicare policy, which tells
the urban hospital, ``We are going to give you more.''
And so, obviously, if you are a nurse and you have to
decide where to work, you tend to go where you would earn more.
The cost of wages--the current policy does not have a floor
or ceiling in place for an adjustment in which the cost of
wages is considered when reimbursing providers. And so, as I
just said, urban hospitals get more, rural less.
I guess I could ask many of you this question. But, Dr.
Pink, does the lack of a ceiling or floor for the Medicare wage
index frankly give a perverse incentive for the urban hospitals
to keep increasing wages to make it harder for a rural hospital
in Louisiana or Iowa or Tennessee to compete and to be able to
keep that nurse who lives close to home, home?
Dr. Pink. Senator, we have done some research on the
various rural designations that Congress has created, and there
are some of these designations where the wage index does play a
key role.
For example, in one study we completed last year, we found
that many of the sole community hospitals in the country--it is
an important payment designation--but they are located in
States which have lower wages, and therefore, for the hospitals
that are eligible for that designation, in fact there is no
advantage to taking it. They take the PPS payment instead of
sole community.
So I believe it is an issue. We have not studied it beyond
sole community hospitals, however.
Senator Cassidy. Okay. I will say that Senator Isakson has
a bill, which I cosponsor, to put a floor under the Medicare
wage index, which we do think would help rural hospitals
substantially.
Secondly--and I will stay with you, Dr. Pink--over the last
decade, there has been a lot of consolidation in hospital
systems.
Just for folks to see, Obamacare passed in about 2009, and
that is kind of an inflection point. Whether or not it is
causal or just associated, we do not know. But I wanted to show
others to see as well.
But subsequent to 2009, we can see that the number of
consolidation episodes has increased, about doubling year to
year.
Now, we know that that increases cost. There is good data
showing that prices at a monopoly hospital are 12-percent
higher than those markets with four or more rivals. And I could
give more evidence to that.
Dr. Pink, given that these mergers coincided with rural
hospital closures--I do not know the answer to this; I am
asking you--has consolidation by large hospital systems reduced
competition or increased prices and kind of resulted in rural
hospital closures?
Dr. Pink. We have not studied urban mergers and
acquisitions, Senator. I can say that for many rural hospitals
and small communities, merging with a larger health system has
been the only option available to them, where they are
literally faced with the choice of, do we do nothing or do we
affiliate or are we bought by a large system?
Senator Cassidy. Now, Ms. Thompson raised the issue of
these ACOs not being extended to the rural area. But
presumably, if an urban hospital consolidated, bought a rural
hospital, they would just extend their ACO out to the rural
area.
Ms. Thompson, has that not occurred?
Ms. Thompson. That has not occurred.
Senator Cassidy. Now, pourquoi pas--as my French teacher
would tell me to say--why not?
Ms. Thompson. The cost-based reimbursement model that is at
place with critical access hospitals simply reduces any
opportunity, because they are reimbursed based upon their costs
associated with the Medicare patients they are caring for.
Senator Cassidy. Okay.
Ms. Thompson. So they do not have an opportunity to see the
shared savings associated in that.
Senator Cassidy. So we get the consolidation, which may
keep the doors open, but none of the extensions, the putative
benefits, get extended to others.
Let me move on. I have 9 seconds left and want to fit one
more in.
Ms. Martin, we have heard about the rise of freestanding
ERs in places like Texas and Colorado. Several of you have
mentioned that when these facilities close, frankly, folks'
primary complaint is, ``I want to have an emergency room
nearby.''
Proponents argue the facilities are providing increased
access to ER care in rural areas where it is not financially
feasible to have an entire acute care hospital.
The opponents argue that they are cherry-picking. And
although I am told they take anybody who comes and that the
physician-owned facility--the fact the physicians owned it is
an issue. Currently, the facilities are not reimbursed for
Medicare or Medicaid patients.
Ms. Martin, you work in Colorado. They are allowed. If we
were to allow these facilities to be reimbursed by Medicare and
Medicaid, would this be a good thing for your rural area,
increasing access to rural ER care, if you will, or not?
Ms. Martin. I do not believe that it would be a good thing
in the rural areas. The freestanding EDs that have originated
in Colorado are all exclusively in the urban areas. They are
not in the rural markets.
And I believe, in a rural market, the idea of an emergency
department conversion from a critical access hospital is that
you keep care located close to a community where----
Senator Cassidy. Now, let me stop you for a second. It is
impractical if somebody has a head injury that you are going to
have a neurosurgeon in a rural hospital, and quite likely you
will not have a general surgeon, just because a general surgeon
cannot--my wife is a general surgeon; I will use the feminine--
she cannot maintain her practice because there is not enough
volume and/or your payer mix is so poor.
So I thought the emerging paradigm was, if you stabilize
the patient, do as much as you can, but then transport
quickly--would that not work in Colorado?
Ms. Martin. I guess what I am referring to is the
freestanding emergency departments that have been created in
the front-range market.
In our rural community and the hospital that I work in, we
do have general surgery. And some of the critical access
hospitals that neighbor us, they do a lot of stabilization and
transferring. That is what we do in the rural facilities.
I think that keeping an emergency department in a rural
facility is very positive and something that we need to do
collectively. My statement was simply that the freestanding
emergency departments that have started on the front range have
not----
Senator Cassidy. You have to wrap it up because I am way
over. Okay. I am sorry, I did not mean to interrupt, but I am
2\1/2\ minutes over, and my folks have been forbearing. I
apologize.
Thank you very much for your answer.
Thank you all.
Senator Roberts. Senator Cantwell?
Senator Cantwell. Thank you, Mr. Chairman.
I thank the witnesses. And I thank both my colleagues for
this important hearing.
Obviously, I was not here, Ms. Martin, when you gave your
statement, but this statement by you about how where you live
should not determine if you live resonates a lot in my State.
The access to health care through the Medicaid expansion
was big in rural communities in my State. Writ large, 600,000
people in our State got expanded coverage.
But we have counties like Douglas and Chelan where, again--
so the chairman knows where our apple and cherry and pear
industry is located--they have seen the uninsured rate drop
more than 60 percent thanks to that Medicaid expansion.
So I just wanted to ask about the importance of making sure
that we keep that expansion and the importance of not allowing
any kind of cap or reduction.
Under this discussion that we had, CBO was saying that the
previous proposals on block granting and changing Medicaid
might cut as much as a quarter out of Medicaid over the next 2
decades.
So is that problematic, Ms. Martin, for rural areas?
Ms. Martin. I think certainly the ACA expansion made a very
positive difference in the community where my service area is,
and I think in Colorado overall.
We had an uninsured rate of nearly 20 percent, and that has
been reduced in my community down to low single digits.
And so the coverage for patients allows patients to get
access to care. It has improved the financial bottom line of,
certainly our organization.
I spoke earlier that 70 percent of our population is
Medicare and Medicaid, so our relationship with government
payers is critical to our survival.
Senator Cantwell. Did you say 70?
Ms. Martin. Seventy.
Senator Cantwell. And ours is up there as well, over 50. I
do not know what the latest numbers are. But I do not think
people quite understand that that is the challenge we face.
I mean, we love our rural economy, and we love our rural
communities. They are a great place for people who are aging to
retire and live. And it is more affordable, but that means it
is a different mix of the population as it relates to how you
build a health-care delivery system. So the Medicaid expansion
is so critical to that.
I also wanted to ask about telemedicine, because that is
another delivery system that I think--for us, we have this
Project ECHO, the University of Washington working with
Harborview. You have heard of it, obviously, probably in your
State as well, but it has allowed medical professionals from
Seattle to consult with people over in the Yakima Basin, some
of our clinics, to talk about the decisions for really highly
complex patients, for hepatitis C and substance use disorders.
So what do we do about that as it relates to the payment
system? Because I do not think fee-for-service is any kind of
friend to that cost-saving technology and that cost-saving
collaboration that is existing.
Ms. Martin. I think in our community, we are modestly
beginning the use of telehealth. And part of our challenge is
that we do not have the resources for a lot of the startup
equipment. And some of the payment constraints do not allow us
to be able to provide the service.
I think one of the best things we could do is to invest in
the startup expense, particularly for rural hospitals, and then
allow the services to be reimbursed on a fair basis.
We currently do telehealth now in our community for
infectious disease, genetic counseling. And we are trying to
build that for oncology coverage and for cardiology coverage.
And it would actually save the system money.
For instance, when a person goes into our emergency
department and we have one cardiologist in the community, when
that person is not there, if the condition of the patient
warrants, we have to transfer them to another area to be
evaluated by a cardiologist. They oftentimes get transferred or
evaluated and then they are dismissed from the hospital.
If we could have cardiology services available 24/7, we
would save the expense of an air ambulance or a ground
transport for a patient with a cardiology problem.
Senator Cantwell. And there is no reason you cannot with
telemedicine, right, with that kind of technology?
Ms. Martin. Yes, ma'am, that is true.
Senator Cantwell. So it is just getting it recognized into
the system in some way.
Ms. Martin. And paid for.
Senator Cantwell. Right. Well, that is what I meant--
recognized into the system. And that is why the challenge--just
a fee-for-service model challenge.
For anybody--well, actually, I do not have any time left--
but the doctor shortage issue for rural communities continues.
And we just need to fight that.
And so, you know, we have counties in our State that have,
like, 4,000 people and no access. So we have got to do better.
Thank you.
Senator Roberts. Senator Carper?
Senator Carper. Thanks so much.
My first question for the witnesses is, how many counties
are there in America?
All right; let the record show they have no idea.
[Laughter.]
The answer is 3,007. Delaware has three counties, and the
southernmost county is called Sussex County. It is the third-
largest county in America. We do not have many of them, but we
make them big. [Laughter.]
In Sussex County, we raise more chickens than any county in
America. Last time I checked, we raise more soybeans than any
county in America. I think we raise more lima beans than any
county in America. We have more five-star beaches, I think,
than any county in America. All in one county: Sussex County.
And we have a lot of rural areas and a lot of people who
live in rural areas, despite all of that. We have a lot of
people who live along the coast, you know, Rehoboth and Lewes
and places like that, Dewey Beach, but the rest of the county
is largely agriculture.
And we have some hospitals, rural hospitals. We have
community-based outpatient clinics. We have a VA clinic that is
actually quite good. But we still have a lot of people who do
not have access to health care because we are just so spread
out in a big county.
I want to talk a little bit with all of you, now that we
have gotten that out of the way, about costs that flow from
tobacco use, costing our--I say our health-care system; it is
actually really costing all of us.
And I understand that we are spending in this country about
an extra, I want to say, $200 billion each year because of our
addiction to tobacco products. And we are spending, I am told,
another $150 billion to maybe $200 billion a year because of
obesity from one end of the country to the other, including in
Sussex County.
But I am told that America's rural communities are still
more likely to use tobacco products than other parts of our
country. Our rural communities are also more overweight and
more obese.
And I would just ask, what tools--here is my second
question of the day--what tools, what resources, what delivery
system reforms could we be using to reduce the disparity in
rural communities when it comes to tobacco use and obesity?
And I want to start with Dr. Murphy.
Dr. Murphy. Thank you, Senator.
Senator Carper. I was told you are really good on this
question.
Dr. Murphy. Oh, thank you. What we have talked about
earlier was a new way to pay for rural health--I do not even
say rural hospitals--but a new way to reimburse rural
hospitals. And it is a multi-payer global budget system that
allows hospitals to focus on the problems that you just talked
about. And instead of investing in subscale services, invest in
tobacco cessation programs, invest in substance use disorder
treatments, investment in the health status outcomes that we
are looking for to end this disparity, or to gradually decrease
this disparity, between rural health outcomes and those of
their urban counterparts.
So that is the beauty of this model. It allows for the
investment in care coordination. It allows communities to
really take those chronic disease problems and reallocate the
dollars that they were receiving from subclinical care services
that they had to provide because that was the only way they got
paid. It now allows them to address this population's health
more.
Senator Carper. Let me ask the other four witnesses. If any
of you agree with what she has just said, would you raise your
right hand?
All right. Do any of you have something you would like to
add to what Dr. Murphy said?
Ms. Martin?
Ms. Martin. I would just like to add that an investment in
primary care providers--because I think that is the
relationship that impacts patients' behaviors--impacts
patients' ongoing quality of life.
And so, in so many communities, it is the importance of the
primary care provider that impacts these behaviors.
Senator Carper. Does anybody else want to add to it?
Yes, please.
Dr. Mueller. I would add to that the investment in public
health infrastructure. And you can come at that in two ways:
one, encouraging collaboration between the health-care sector,
the clinical sector, and the public health sector, which the
ACO model does; and two, direct investment into public health
agencies.
Senator Carper. All right. One last quick question. What
are your recommendations for how we can increase the supply of
mental health workers and improve access to mental health
treatment in rural and underserved areas?
And we will start all the way on my left, please.
Dr. Pink?
Dr. Pink. Again, I would defer to my colleagues. I have no
expertise in that area.
Senator Carper. All right; thank you.
Dr. Mueller. One comment would be to integrate our support
for behavioral and mental health services with primary care.
Senator Carper. Okay; thank you.
Ms. Martin?
Ms. Martin. I think it is investing in the education and
programs where, as community hospitals, we can educate and
train a workforce of our own. We have an extreme shortage in
the number of qualified professionals in that area.
Senator Carper. Thank you.
Ms. Thompson?
Ms. Thompson. Yes. I believe it is to further study the
integrated health home model that is at play with our Medicaid
population. And I think there is a great deal to learn there
and a great deal of excitement to create in young folks if we
can get into high schools and educate and motivate them about
the opportunities in mental health.
Senator Carper. Okay.
Dr. Murphy, do you want to add anything to this?
Dr. Murphy. I would just say leveraging the technology so
that we can access, rural areas can access the more urban
centers.
Senator Carper. All right. Where have you all come from?
Tell me where you are from.
Dr. Murphy, where are you from?
Dr. Murphy. I am the chief innovation officer at Geisinger.
Senator Carper. Oh, good. I have been there before. You
guys do good work.
Yes?
Ms. Thompson. UnityPoint Health in Des Moines, IA.
Senator Carper. Okay, yes.
Ms. Martin. San Luis Valley Health, Alamosa, CO.
Dr. Mueller. University of Iowa.
Dr. Pink. University of North Carolina at Chapel Hill.
Senator Carper. Okay. Well, you have come from--some of you
have come from a long ways. We thank you, and we thank you for
the work you do. It is really important for our country and for
the people of our country. Thank you so much.
Senator Roberts. Senator Portman?
Senator Portman. Thank you, Chairman Roberts.
And thanks to the panel. I was here earlier to hear your
testimony. I really appreciate it, some of the insights about
the special challenges we face in the rural areas.
I come from Ohio. We have a lot of big urban hospitals, and
we have a lot of small rural hospitals. Sadly, some of them are
closing down or consolidating.
And I will tell you, in my State, one of the issues that is
particularly difficult to deal with in our rural areas is the
opioid epidemic. And I would think if you did a per-capita
analysis of the opioid epidemic in my State, you would probably
find that in the rural areas the problem is even more acute
than it is in some of our suburban and urban areas, although it
is in every ZIP code. But the difference is really not so much
the per-capita impact, but the services that are provided.
And one of the issues, as you know, is that we have more
and more children who are being born with neonatal abstinence
syndrome, meaning they really have to be taken through
withdrawal themselves.
We have some great programs, taking moms who are addicted,
weaning them off of their addiction and helping to ensure that
these babies are born without the neonatal abstinence syndrome.
But it is overwhelming us, our neonatal units. I am sure the
same is true with you.
One of the things I am hearing about from our children's
hospitals is that sometimes they can take care of the babies
shortly after their birth, but then these babies go home, and
there is not the ability to continue to monitor, particularly
in our rural areas.
And so I guess what I am asking you today is--and I know,
Dr. Murphy, you mentioned the opioid epidemic earlier. I think
you were the one who talked about that.
But to the hospital CEOs, maybe you could help me a little
on this. What services do your hospitals offer to support the
longer-term recovery needs of these growing number of children
who have this neonatal abstinence syndrome, and for their moms
and their families?
And in particular, if you work with kids with NAS, how do
you work to ensure that the families receive the support that
they need?
Ms. Martin. In our community, we have certainly seen an
increase in this issue. Just last year, about 11 percent of the
babies that we delivered had this syndrome that you speak of.
And we have done a lot of training with our staff to have
them have the skillset to help the babies, you know, for the
first few weeks of life. And we sometimes keep them for that
period of time.
When they move out into the homes--and oftentimes,
unfortunately, they are going into foster homes because, if the
mother was a user, unfortunately, they are placed in foster
families. And so we have pediatricians who try to work with
these families. And we have a grassroots community organization
that involves the schools, early childhood development, some of
our primary care providers. And together, we are trying to sort
of leverage and learn about resources.
It is a challenge, because there is just not a lot of
information about that. We hear from our school teachers,
particularly of elementary schools, that they do not feel
equipped to deal with the challenges that some of these young
children bring to the classroom.
And so I think just additional resources around education
and training, so that our workforce would know better how to
help these children, would make a huge difference.
Senator Portman. Yes.
Any others?
Dr. Murphy. Senator, at Geisinger, we are just beginning to
develop a program for moms who have substance abuse and their
children subsequently born with neonatal abstinence syndrome.
So the vision for the program is that we would intervene
when the mother begins medication-assisted treatment
prenatally. And then we would, what we say is, wrap our arms
around the mother and the baby with services such as behavioral
health services, addiction medicine, counseling, pediatric
services, and other social services that would enhance the
likelihood of the mom staying in recovery after the baby is
born.
So the idea behind it is that we would test. We would offer
these services for a period of up to 2 years and evaluate the
model and determine what interventions really helped that mom
stay in recovery and go on to live a productive life.
Senator Portman. Well, thank you.
And we did pass legislation here called the Comprehensive
Addiction and Recovery Act, which has a separate title for
pregnant moms, postpartum moms, and these kids with NAS.
Since that time, we passed a budget which increased the
funding for that. So for those few who are not aware of that,
apply for it. We are looking for good pilot programs around the
country.
But I think Ms. Martin is right; Dr. Murphy is right. If we
can, spend some money up front to avoid some of the longer-term
problems and figure out what works.
You mentioned information and the right kind of therapies
to be able to help these babies as well as their moms take
advantage of this moment.
Many of these moms are facing their addiction because of
their pregnancy. In other words, they do not want their kids to
be born with this syndrome, so they are willing to go into
treatment and, maybe previously, they were not.
And I think Dr. Murphy is right. How do you then, once the
baby is born, keep them--usually it is a Suboxone treatment
that is a weaning off of the opioid. How do you then keep them
in that treatment program and longer-term recovery and use that
family relationship to help kindle some better prospects for
longer-term recovery?
So anyway, we look forward to working with you all on that.
And I think in the rural hospitals, again, the rural setting,
we have a particular challenge.
And I appreciate your being here today and look forward to
following up.
I have another question on the Stark Law, but I will offer
that as a question for the record. Senator Bennet and I have
some legislation I want to get your views on. Thank you.
Senator Roberts. Well, thank you, Senator.
Coop, you are up next. [Laughter.]
Senator Thune. Thank you, Mr. Chairman. It must be ``High
Noon.''
Thank you for holding this hearing.
We have, in my home State of South Dakota, lots of
challenges in accessing health-care services in rural areas.
And we have providers who work diligently coming up with
creative solutions, but there are still barriers and
complications that they face on a daily basis. Part of it has
to do with traveling long distance and having limited
transportation options. They are big hurdles for people to
overcome.
And attracting providers, of course, to rural areas is
another challenge that we face. Too often, we lose South
Dakotans if they attend school and train in other States.
And we have a unique issue in South Dakota as well with our
tribal communities, making sure that they have access to
quality health-care services, due to the pervasive problems
that Indian Health Service facilities throughout the Great
Plains region continue to have.
So I look forward to working with my colleagues on this
committee in trying to advance solutions that will address many
of these challenges.
Dr. Mueller, in your written testimony, you mention that
RUPRI Center has completed multiple studies on how telehealth
can serve as a tool to expand access to care in rural settings.
And I could not agree more.
I understand that you have a current project that is
looking at Avera Health's eCARE initiatives in South Dakota,
which range from emergency department, e-ICU, e-pharmacy, e-
behavioral health, and more.
I have seen some of this technology first-hand. I know they
are working hard to innovate.
I should say for this committee's benefit, could you
discuss what you have learned so far about Avera's model and
how it has helped increase access in our State of South Dakota?
Dr. Mueller. Well, thank you, Senator Thune, for the
question. I will focus primarily on what we have learned about
the use of telehealth in the emergency rooms, because that has
impressed us the most.
What that has done, especially since--I mentioned earlier,
the CMS condition of participation was changed a number of
years ago to allow meeting the necessity for an on-call
physician through the use of telehealth. And that has made a
tremendous difference across South Dakota and other facilities
that Avera supports, because you can have an advanced-practice
primary care provider, not a physician, in the ER who can
quickly access a board-certified physician.
But more important even than that is the finding that the
use of that kind of telehealth actually helps in recruitment
and retention of primary care providers. And this goes to a
broader point that the more we can do to support the
professional activity of those health-care professionals in the
local environment, the greater the likelihood they will come
there--because that is how they want to practice, with the
support of board-certified physicians--and the greater the
likelihood they will stay, because they are getting that kind
of consultative support.
The other quick example is in the case of pharmaceutical
services. Inside the hospital in particular, which is how the
e-health suite from Avera reaches out, you can meet the
requirements for review of medication as it is being prescribed
in a hospital much more efficiently and effectively through the
use of telehealth.
Senator Thune. We have, perhaps as you know, put forward
multiple policies that were signed into law this year that will
reduce barriers to the use of technology in Medicare and
promote telehealth in Medicare Advantage, in Accountable Care
Organizations, and other areas, including in treating stroke
patients. And these are significant advancements.
But I am wondering if there are other areas where
technology can transform delivery of care in rural States. I
mean, what should we be looking for in terms of technology
opportunities in Medicare and Medicaid from your perspective?
And, Ms. Thompson, if you would care to comment on that as
well.
We are making some headway, but what else should we be
doing?
Dr. Mueller. I think we should try to learn as rapidly as
we can--you mentioned the use of telehealth in ACOs and
Medicare Advantage plans--so that we can transfer that
knowledge into the basic Medicare system and affect
reimbursement policy, as was mentioned earlier this morning as
one of the barriers to the expansion of telehealth.
Senator Thune. Ms. Thompson?
Ms. Thompson. And I would simply add I think there is a
great opportunity to attract the new generation of physician
providers, or providers in general, to rural health. These
young people have grown up with technology, it is very familiar
to them, and, frankly, it gives them a lifestyle that is
something that is very attractive and I think would help us
answer the needs of recruiting to the rural areas.
Senator Thune. Good.
Mr. Chairman, I have another question I can submit for the
record having to do with the EHRs and how that impacts service
delivery in rural areas as well. But I see my time is expired,
so I will submit that for the record.
Thank you.
Senator Roberts. We thank you, Senator.
Senator Warner?
Senator Warner. Thank you, Senator Roberts.
One of the issues that--and I think, Ms. Martin, it was
raised in your testimony--I am increasingly seeing is kind of
isolated areas where there may be, you know, two competing
hospital systems, and they leave an isolated island in between
where the two systems' catchment area comes. And you may have
rural communities with a single doc. And in my State, in the
county of King George, the doc has been practicing 35 years,
done a great job, and is about to leave, and because it falls
in between two competing health-care systems, nobody has wanted
to take this region. And should he retire--and frankly, his
system is being sold--we have a community that could frankly go
without any kind of coverage at all.
This problem of isolated areas where there is not a larger
system to provide the back-office coverage, even if the rural
area has relatively high affluence--this one particular
community, King George, has relatively high affluence--you
know, how are we going to get at that? How do we--are there any
systemic things we can do, whether it would be a slight
increase in terms of Medicaid reimbursements or other
reimbursements, to make these islands more attractive on a
longer-term basis?
Ms. Martin. I think we do not--I do not--experience that
quite as much in my region of Colorado, because geographically
we are defined by a mountain range. And so certainly, anything
within our valley, we are covering and taking care of.
We see that a little more in the eastern plains of
Colorado, where you will have a community that, with the
retirement of a physician or the closure of a hospital, you
have a gap in coverage.
And I really hope that the State-wide leadership can make a
difference in that in pushing people there.
I do think that the age of physicians going and starting
practices on their own, if it has not come to an end, it is
slowly coming to an end. And I think it is going to take
working with existing rural health-care systems so that they
have the financial means to do a startup and a practice.
I think loan repayment for physicians makes a difference
with that. And I think certainly Medicaid reimbursement makes a
difference with that in rural communities. Because when you
have 70 percent Medicare or Medicaid, like you do in my
community, you cannot make a private-model business work.
Senator Warner. But this notion of an individual doc going
has to have some kind of back-office operation to support him
or her. And do you have other ideas?
I know back in the 1990s, the Robert Wood Johnson
Foundation had a huge kind of focus on this issue of
underserved communities and GP practices opening up. But as you
said, the ability to open up a practice on your own right now
without some additional support from an overall system is
really hard.
Is there any way--has anyone thought about beyond what the
government could do in terms of reimbursement levels or loan
forgiveness, you know, incentives to health-care systems to
make sure you do not leave these isolated islands not having
coverage?
Ms. Martin. I guess my thought on that would be that I
think rural systems do really look at that geography and make a
difference.
The idea of even the J-1 Visa programs, things that will
help small hospitals like ourselves be able to get providers
that will go to these communities through long-term incentives,
that is what comes to mind for me.
I think the idea of a critical access hospital or a rural
hospital like the one we have in Alamosa being able to get paid
under a different reimbursement model in those communities
gives you the resources to take on those communities that do
not have providers.
I think it is a real challenge. And I wish I had a better
answer.
Senator Warner. Yes.
Does anybody else want to add on to this? I do think the
notion of a higher reimbursement level--but then, do you create
almost an incentive for some systems to kind of drop providers
so that they could then qualify for an increased reimbursement?
It is a real conundrum. I mean, I would be happy to hear
from anybody else on the panel. This will be my only question.
Well, I think this is not--when you have the hospital
systems that want to make a profit and are not willing to
stretch for these isolated islands, and with the retirement of
many docs and the inability for a new doc to go into these
communities, it is a real problem, a real issue. They cannot
set it up on their own. We have to find a way to crack this
code.
Thank you, Mr. Chairman.
Senator Roberts. Senator Cardin?
Senator Cardin. Thank you, Mr. Chairman.
I thank the panel.
I first want to just concur with the comments of several of
my colleagues on telemedicine and particularly for rural health
care. I think it is really an area where we can do much better.
I am proud to join some of my colleagues on legislation
that would allow for Medicare reimbursement for telemedicine
broader than it is today.
But I want to talk about what we do in Maryland. We are the
only State in the country that has an all-payer rate structure
for hospital reimbursement. And we went to the next plateau a
couple of years ago, and just approved this month, the final
aspects of this demonstration that allows our hospitals
basically to be judged on the overall reduction of the growth
rate of health-care costs rather than just the hospital element
of it.
So we have an all-payer rate structure in our hospitals,
but coordinated with reducing the overall costs of that
patient's health care beyond the hospital care. So there are
incentives to keep people healthy.
And by way of example, the Western Maryland Regional
Medical Center, which is in a rural part of our State, offers
care coordinators, navigators, and local practices to use its
telemonitoring for blood glucose, blood pressure, and weight,
and works on the social needs of the patients. And that can be
incorporated into the all-payer rate structure, which means all
of the third-party payers are helping to reimburse for that,
because you cannot get discounts in Maryland hospitals.
So it works to allow rural areas to have full access to the
continuum of services.
So my point is, this model--and this is now being
implemented in our State--how do we take this type of a model
into the rest of the country that is still in the stovepipe-
type reimbursements that, to me, work against rural America?
How do we take the model of what we are doing in Maryland and
use this to develop more access to care and reduce the growth
rate of health-care costs in rural America?
Dr. Murphy. Senator, thank you for that question. So I had
the opportunity when I worked at CMMI to work on the Maryland
model and can share your enthusiasm with the model.
And in Pennsylvania, there is actually a Pennsylvania
Health rural initiative that is looking to do exactly what you
just articulated, so taking the Maryland model in a State that
is not an all-payer rate-setting State and developing a
different methodology, but similar in the way that it includes
all payers and has also the metrics of total cost of care
involved in the model, but really using it in the way Maryland
did for the Total Patient Revenue hospitals back in 2010, but
with 8 more years of knowledge on how we transform and how we
focus on population health.
So we concur that it is a great model. I had previously
testified that in your State next week the Johns Hopkins
University School of Public Health is conducting a summit for
States to attend on global budgeting. And it is my
understanding that we have over 26 States that are interested
in pursuing this.
Senator Cardin. Yes?
Ms. Martin. I would just say that in Colorado we are
beginning to explore this model as well. We are very much in
the beginning stages of it. But the conversations around global
budgets and ways to keep our community healthy and control cost
are at the forefront of our mind too.
Senator Cardin. Ms. Thompson?
Ms. Thompson. And I just simply want to applaud the
recognition that the current payment structures, the current
payment systems for rural America, while all well-intentioned
and all designed at a certain point in time to help save rural
health care, at this point in time are now setting rural health
care back and not being able to move into population health and
the alternative payment models and MACRA.
And I just want to applaud the work.
Senator Cardin. Well, thank you. And my concern is that I
think the payment structure does not allow for this to occur,
so you really have to find very creative ways in order to do
it. And we should be looking at some mechanisms that allow you
to use a reimbursement structure modification that brings down
the overall cost of health care in your community so that the
hospitals are not the driving force for utilization, rather
that they are part of the overall coordinated and integrated
care.
Thank you, Mr. Chairman.
Senator Roberts. Senator McCaskill?
Senator McCaskill. Thank you very much, Mr. Chairman.
I for the record want to thank the chairman and ranking
member. They actually moved up the hearing this morning because
we anticipated that a number of us would be in the NDAA markup.
We did so well in the NDAA yesterday, we finished it last
night, but I still appreciate the consideration.
I want to talk a little bit this morning--well first, I
want to just say for the record this is a crisis in our
country, the costs of health care in rural communities, and we
are doing nothing in the U.S. Congress to address it at this
moment.
We know that premiums on the exchanges are going up because
of various things that have occurred. And I think I can get
everybody to agree that when we have more uninsured and
underinsured, we have more rural hospitals in stress, and
insurance premiums go up for those of us who buy it. Correct?
Correct?
All five witnesses agree.
So every time the uninsured number goes up, it costs
everybody who is paying, including taxpayers and including
everyone who buys insurance. So the idea of keeping the
uninsured number down is all about saving money in the health-
care system and making everyone responsible for their own
health-care bills.
So it is just ironic to me that we are going to go back to
the bad old days where uninsured numbers are climbing, and we
are doing nothing right now to address it.
And there are a lot of bills out there that would help. So
I am hoping that Leader McConnell will see fit to allow some of
the bipartisan bills that have been negotiated to the floor so
we can actually provide some relief.
My issue I want to talk about--there was a really good
State audit done in my State by the auditor, Nicole Galloway,
about a rural hospital. And what was discovered was there was a
small rural hospital that transferred operational ownership
through a lease agreement in November of 2016, and all of a
sudden there was this giant increase in laboratory billings.
And what happened is the vast majority of these billings
were for lab activity for individuals who were not even
patients of that hospital. Billings began immediately after the
management agreement, despite the fact the hospital in
Unionville, MO had not even begun processing tests.
The Hospital Partners, which is the company that took over
this small rural hospital, also placed on the hospital payroll
33 out-of-state phlebotomists to perform laboratory services
throughout the country. It appears that Hospital Partners
reduced Putnam to a shell organization for purposes of lab
billing.
This morning, I am directing a letter to the Inspector
General at HHS to investigate this. Evidently, this same group
was involved in the northern district of Georgia, sued on a
pass-through billing scheme at Chestatee Regional Hospital.
The Missouri audit findings note that a large private
insurance company has identified up to $4.3 million in payments
for fraudulent claims to Putnam in recent months.
So my question to all of you who are researching rural
hospitals and who are working in rural systems is, is this a
trend? Are these companies coming around and buying up these
hospitals to front for shady billings on lab work? Have you
seen this anywhere else?
No, you have not? Okay.
Well, this letter is going to HHS today. And I think there
is some--in all likelihood, I am betting there is some criminal
activity somewhere. And I think that maybe there should be some
kind of cap on payments to labs outside of the State,
particularly if the billings are coming from a rural hospital.
I know you all have talked about the lack of doctors in
rural communities. I had the University Hospital in Columbia,
MO say they were taking in more rural patients than they
should. Rural patients were bypassing their local hospitals and
going to the University Hospital, mainly because that is where
their doctors were.
Can any of you address--maybe, Ms. Martin, you can address
the real problem, especially that we have with OB/GYNs being
able to be in rural areas, and any ideas you might have of how
we can incentivize doctors to stay in these rural communities,
go to these rural communities and stay in these rural
communities.
Ms. Martin. I think the workforce issues are very much
challenges in rural areas. I think we spoke today about the
loan repayment programs, the Conrad 30 J-1 Visa programs; I
think they are very important to rural communities.
But I also think it is about easing some of the regulatory
burden on physicians who work in small areas, because they just
want to be physicians; they want to take care of patients. And
when they can work to the top of their license and to the top
of their skill, they are more satisfied in a rural community.
And I think that we talked about telehealth a bit today.
When physicians know that they can be covered when they are off
and they are out or they do not feel the burden of a 24/7
responsibility, I think that is a more satisfying opportunity
for them as well.
We know with OB/GYNs we are very fortunate in the community
that I am in that we have three OB/GYNs who work there. And we
work a lot with nurse midwives to do first-line coverage for
call, for regular deliveries, to give them a little bit of
relief so that their call time and their quality of life
balances, is different maybe than what they would experience
without those.
And so it is the use and the complement of those advanced-
practice nurses that help to keep the OBs in our community.
Senator McCaskill. Thank you.
Thank you, Mr. Chairman.
Senator Roberts. Senator Brown?
Senator Brown. Thank you, Mr. Chairman.
My State of Ohio struggles with some of the highest rates
of infant mortality and maternal mortality in the country.
Shamefully, it is partly because we have under-invested in
public health for decades. It is more complicated than that.
Between 2008 and 2014, 400 women died from pregnancy-
related causes in Ohio, and in 2016 more than a thousand babies
died before their first birthday. Obviously, these losses,
these tragedies, were not felt equally across all communities.
African-American communities in our cities suffered
disproportionately to the greatest extent.
We also know that, in terms of maternal and infant
mortality, places like Appalachia, Ohio and other small towns
generally a little more affluent than Appalachia, dealt with
this.
This hearing is about rural hospitals and rural health
care, so I will stick to that. I am concerned, though, that--
not in a conspiracy sort of way--this committee has done
nothing that I can see on infant mortality generally when the
problems are equally acute, maybe even more so, in urban areas,
among low-income people of color especially.
There is a national Republican effort, troubling, that
Governors are--work requirements seem to be the new far-right-
wing rage in this country: work requirements for food stamp
beneficiaries, even if they are getting treatment from opioids
and even if they are, you know, incapable of working. They are
also now looking to do work requirements for Medicaid. And they
are doing it in a way that will absolve more rural white
communities' high unemployment from these work requirements,
but will have these work requirements on inner-city families,
increasingly because they are really smart and they have
figured out how to do it legally, apparently, but immorally, if
I could say that.
But because this hearing is about rural health, I will
stick to a question about that--a couple of questions.
Dr. Murphy, if I could start with you, what do we do? And
partly taking off on Senator McCaskill's question, what do we
do to support rural communities in improving outcomes for moms
and babies?
Ms. Martin said something about that. I would like to hear
your thoughts, and particularly about maintaining access to
obstetric services.
Dr. Murphy. I think we have to be realistic with the
maintaining of obstetrical services in rural communities.
I think Ms. Martin gave an example where there is adequate
coverage, three physicians there who, in case of an emergency,
could certainly cover for one another.
It is a very high intensity. An OB/GYN has a very high-
intensity schedule, so you really need the numbers that Ms.
Martin talked about to be able to effectively and safely render
obstetrical care.
So I think in areas where they are fortunate enough to be
able to have the physician services on-site in a safe and a
high-quality manner, I think then we should do that.
I think we should work through other providers, such as
nurse midwives, certified nurse practitioners, physician's
assistants, to be able perhaps to offer some of the obstetrical
care in the rural community when it is not possible to deliver
there, so a mom does not have to drive 35 miles for her monthly
appointment.
But I think it is a very difficult service to staff in
rural communities unless you have the number of physicians that
Ms. Martin talked about.
Senator Brown. Thank you.
A few weeks ago, I hosted a conference in our office, and
Rob worked with us to host a conference for CEOs from Ohio's
smaller hospitals. We have some of the best hospitals in the
country in Ohio. But rural hospitals are not often part of the
conversation, and they rarely come to Washington. And so we
hosted a number of them.
One of the questions that came up, of course, was the
challenge faced when attracting and retaining a strong
workforce.
So I am sorry I have been in another hearing today, but
from Ms. Martin's comments and Dr. Murphy's comments, I
appreciate that.
I would like to, before I yield back, Mr. Chairman--and I
wanted to thank, too, Senator Wyden, who has been helpful on
this Medicaid work requirement, and, as you know, we are
working on some things together. I wanted to thank him.
But I want to just close with this.
And just a comment, Senator Roberts.
I want to thank Senators Grassley and Casey for their work
on a bipartisan bill we introduced together, Senate bill 109,
that would allow pharmacists to bill Medicare for services they
are trained to provide in underserved areas. I understand
pharmacists are not perhaps the greatest need in every case,
but they obviously are central to a lot of this too. They can
work then with rural hospitals to help improve access to basic
health-care services like immunizations and chronic disease
management in their communities.
About a dozen members of this committee, if I could just
name them--Thune, Scott, Roberts, Stabenow, Cardin, Nelson,
Bennet, Enzi, and Cantwell--are also cosponsors of this
legislation.
And I am hopeful that--I know the chairman is not here--I
am hopeful that Chairman Hatch and Ranking Member Wyden will
commit to working with Senator Grassley and me on this bill and
other creative initiatives to help all of you deal with the
challenges you have in workforce retention.
So thank you all so much.
Thanks, Senator Roberts.
Senator Roberts. Senator Wyden?
Senator Wyden. Thank you very much.
And before he leaves, I just want to tell Senator Brown I
am anxious to work with him on the agenda he has outlined.
Because as usual, he is going to bat for folks who do not have
clout and do not have power, and I want to thank him for his
comments.
So we have been at it for almost 2\1/2\ hours.
You all have been terrific.
But what I am struck by is, I do not think we have
mentioned over the course of 2\1/2\ hours what is really the
backbone of rural health care, literally from sea to shining
sea, and that is rural health clinics.
And I am heading home. We have 83 of them in my home State.
And I know, Ms. Martin, you have a significant number of
them.
Dr. Mueller, you have expertise on this.
In my home State, from Curry County to Enterprise, these
rural clinics are literally the backbone of health care. And
they are where seniors go and people go for preventive
screenings and primary care services and everything that helps
them to stay healthy and out of the hospital.
So what I would like to do, since we are getting ready to
wrap up, is go right down the row again, since we have this
little window here to try to look at what is important going
forward--I do not think it gets much more important than these
rural health clinics.
So why don't we start with you, Dr. Mueller?
Everybody, one item on your wish list for the rural health
clinics going forward.
Dr. Mueller?
Dr. Mueller. Optimizing the use of the non-physician
professionals through State policy, scope of practice, and
Federal policy on conditions of participation and supervision
requirements.
Senator Wyden. I missed your colleague Dr. Pink. And maybe
I just need to wear my glasses.
Dr. Pink?
Dr. Pink. The suggestion made by Dr. Mueller, I would
strongly endorse.
Senator Wyden. Okay.
Ms. Martin?
Ms. Martin. The issue with colocation and comingling rules
that prevent the true integration of the health-care provider.
Senator Wyden. I think that is so important. And you know,
Chairman Roberts is one of the co-chairs of this really
important Rural Health Caucus, along with our colleague Senator
Heitkamp, who talks to me about this constantly. Hardly a week
goes by when she does not bring it up.
I would just say, Mr. Chairman, this whole question of the
comingling rules that Ms. Martin is talking about, this just
looks like a bureaucratic la-la land to me, trying to sort all
this stuff out. So I am going to talk with Chairman Roberts
about it.
Yes, ma'am?
Ms. Thompson. Strengthening the support to these advanced
registered nurse practitioners and P.A.s and extenders that
many times are working in very isolated areas, to give them the
support, the education, the retraining, and the access to
consultation.
Senator Wyden. Giving them a bigger role.
Ms. Thompson. Absolutely.
Senator Wyden. I have to tell you--and we had it in our
Healthy Americans Act, our bipartisan bill with eight Democrats
and eight Republicans--you ought to be able to practice at the
top of your license and particularly in these rural areas.
So, Mr. Chairman, that is another one. I mean, why you
would not let people practice up at the top of their license in
a rural area--I mean, that is just common sense. That has
nothing to do with Democrats and Republicans.
Well, you all have been terrific. You know, we have been at
it for close to 2\1/2\ hours.
And I think, to me, without rural health care, you cannot
sustain rural life. This is not rocket science. There are a
couple of pieces to the puzzle that are a part of this.
We are trying, for example, to expand broadband. And one of
the striking aspects about this is, I think we started a
revolution in Medicare with our CHRONIC Care bill, because what
we are doing is moving from acute care, which back when I was
director of the Gray Panthers, was the program. You broke your
ankle--that is not Medicare anymore. Today, Medicare is cancer,
diabetes, heart disease, strokes, that kind of thing.
So we had a terrific group of members, led by Senator
Schatz and Senator Wicker, come and make the case for
telemedicine. It is really, really important in rural areas.
But what we have seen in central Oregon and the like is that if
they do not have broadband, they cannot tap all the
opportunities for telemedicine.
So there are a lot of pieces to this puzzle. But you have
given us a lot of suggestions.
I want also to say I am especially looking forward to the
suggestions for the record with respect to how to get more
providers in rural health care, because you can have the
facilities, but if you do not have the providers, that is that.
So, Mr. Chairman, I think it has been a really good, really
important hearing. People know I have very, very strong
feelings, which I will not express again, which will please the
chairman, about how damaging these Medicaid cuts would be.
We can get a bipartisan package here--this is doable--a
bipartisan product in a crucial kind of area.
I am looking forward to working with all of you and with
Chairman Hatch and all of my colleagues on both sides of the
aisle. There was not a bad question in the house today. So we
have a lot of work to do.
I look forward to working with you, Senator Roberts.
Senator Roberts. Thank you, Senator Wyden.
And thank you all for your attendance and your
participation today.
This was in fact an important and very helpful
conversation. All of us look forward to working with each of
you in a bipartisan way, both sides of the aisle, as we
continue to work on a path forward to improve our rural health
care for all of us who are privileged to represent rural and
small-town America.
Dr. Mueller, let us see, it was 1993 that you testified
before me, I guess. And now here it is 2018. So I look forward
to hearing from you in 2033, when I hope we have these things
settled. [Laughter.]
I ask any member who wishes to submit questions for the
record to do so by the close of business on Friday, June 8th.
With that, this hearing is adjourned. Thank you so much.
[Whereupon, at 11:20 p.m., the hearing was concluded.]
A P P E N D I X
Additional Material Submitted for the Record
----------
Prepared Statement of Hon. Orrin G. Hatch,
a U.S. Senator From Utah
WASHINGTON--Senate Finance Committee Chairman Orrin Hatch (R-Utah)
today delivered the following opening statement at a hearing to examine
the challenges and discuss ways to improve health care in rural
America.
The topic today is rural health care, which is a critical issue for
virtually every member of this committee.
I have long considered it a special mission to create the same
rural payment opportunities that many of our Nation's urban
counterparts enjoy. Representing a western State, I understand the
challenges our rural hospitals and providers face to deliver high-
quality medical care to families in environments with more limited
resources.
In the Senate, rural health-care policy boasts a long history of
collaboration and cooperation on both sides of the aisle.
Take, for example, back in 2003 when we passed the Medicare
Modernization Act. The MMA included a comprehensive healthcare package
tailored specifically with rural communities, hospitals, and providers
in mind.
The MMA finally put rural providers on a level playing field with
their neighbors in larger communities.
The law also put into place common-sense Medicare payment
provisions that help isolated and underserved areas of the country
provide access to medical care as close to home as possible.
However, while the vast majority of rural health payment policies
enacted in the MMA were permanent, some were only temporary. In the
years following, those temporary provisions have become known as the
Medicare extenders. As many of us know, the problem with extenders is
that annual debate over necessary funding often takes priority over
developing a more robust strategic plan for the future.
Although some partisan and bipartisan health-care policies have
since altered Medicare payments, many rural and frontier health-care
providers still face significant obstacles attempting to successfully
participate in Medicare's delivery system reforms and bundled payment
arrangements.
While these changes continue to emphasize new ways to pay
providers, Medicare's existing strategies to preserve access to
healthcare in rural areas still rely on special reimbursement programs
that either supplement inpatient hospital payment rates or provide
cost-based hospital payments. Now, these special payment structures may
work just fine in certain parts of the country.
But even with a wide range of special Medicare rural payment
programs, some smaller communities are home to hospitals that still
find it hard to achieve financial stability. The reasons, as we will
learn from the expert witness panel with us here today, are complex and
multifaceted.
For example, when compared to their urban counterparts, on average,
the 4 million Medicare beneficiaries living in rural and frontier areas
are less affluent, suffer from more chronic conditions, and face higher
mortality rates.
To make matters worse, small, rural hospitals continue to be more
heavily dependent on Medicare inpatient payments as part of their total
revenues. At the same time, we are seeing a steady, nationwide shift
away from inpatient care to providers offering more outpatient
services.
Many rural hospitals serve as a central hub of community service
and economic development, but some struggle to keep their facilities
operating in the black in order to meet local demands for a full range
of inpatient, outpatient, and rehabilitation services.
Resolving these issues is no easy task.
Clearly, for some communities, Medicare's special rural payment
structures may stifle innovations that could pave the way for more
sustainable rural health-care delivery systems.
One consistent theme that we will hear from our witnesses today is
the need for flexibility.
They are not asking Congress for a one-size-fits-all Federal
policy.
They want the flexibility to design innovative ideas that are
tailored to meet the specific needs of the communities they serve.
They need the Federal Government to support data-driven State and
local innovations that have the promise to achieve results--increasing
access to basic medical care, lowering costs, and improving patient
outcomes.
But the Federal Government cannot tackle this challenge alone.
While I was pleased to see CMS release its rural health strategy
earlier this month, I believe that this administration, led by HHS
Secretary Azar, still needs to improve coordination across all agencies
within the Department to help prioritize new rural payment models while
also reducing regulatory burdens on rural and frontier providers.
State and local officials must be aggressive in their efforts to
design transformative policies and programs that meet their unique
rural health-care needs.
And the Federal Government should listen.
In my view, States should be the breeding ground to test new ideas.
However, it is not sustainable for every small town to have a full-
service hospital with every type of specialty provider at its disposal.
That is why it is so important for rural communities to work
together, share resources, and develop networks.
The Federal Government must continue to recognize the important
differences between urban and rural health-care service delivery and
respond with targeted, fiscally responsible solutions.
By pooling our knowledge, expertise, and financial resources, we
can work together to develop targeted payment policies that ensure
appropriate access while also protecting Medicare beneficiaries and
American taxpayers.
I am looking forward to hearing some of those innovative ideas from
our witnesses today.
But before I turn to Ranking Member Wyden, I want to bring one
important item to the attention of the committee.
The Medicare Payment Advisory Commission--otherwise known as
MedPAC--has submitted a statement for the record outlining the
commission's latest recommendation aimed at ensuring access to
emergency department services for Medicare beneficiaries living in
rural communities.
I encourage all members to review MedPAC's statement and ask that
it be made part of the official hearing record.
______
Ensuring Access to Emergency Services for
Medicare Beneficiaries in Rural Communities
May 24, 2018
Statement of James E. Mathews, Ph.D., Executive Director,
Medicare Payment Advisory Commission
The Medicare Payment Advisory Commission (MedPAC) is a small
congressional support agency established by the Balanced Budget Act of
1997 (Pub. L. 105-33) to provide independent, nonpartisan policy and
technical advice to the Congress on issues affecting the Medicare
program. The Commission's goal is to achieve a Medicare program that
ensures beneficiary access to high-quality, well-coordinated care; pays
health care providers and health plans fairly, rewarding efficiency and
quality; and spends taxpayer dollars responsibly. The Commission would
like to thank Chairman Hatch and Ranking Member Wyden for the
opportunity to submit a statement for the record today.
The Commission has a long history of developing Medicare payment
policies to improve access to care, quality of care, and efficiency of
care delivery in rural areas. The Commission conducted broad-based
reviews of Medicare payment policy in rural areas in our June 2001 and
June 2012 reports to the Congress. More recently, the Commission has
evaluated causes of rural hospital closures and voted unanimously on a
recommendation for a new, voluntary payment option for rural hospitals
that would preserve access to emergency services in isolated rural
areas. (The recommendation will appear in our forthcoming June 2018
report to the Congress.)
To help ensure beneficiary access to hospital care in rural
communities, over time the Medicare program has implemented several
adjustments that increase payments to rural hospitals. Many of
Medicare's special payments to rural hospitals are linked to inpatient
status and are based on hospitals' costs. Despite these special
payments, hospital closures have increased in rural areas as
populations have declined. The volume of inpatient services provided in
small rural hospitals has declined even more rapidly. Though
beneficiaries in rural areas where hospitals have closed may be able to
receive planned, nonemergent inpatient care from other hospitals, the
Commission is concerned that these closures may leave beneficiaries
without access to timely emergency care. Given changes in demographics
and in the way that care is delivered, Medicare payment policies must
change as well. As we outline below, we have recommended a new,
voluntary model of payment that will allow stand-alone emergency
departments to operate in rural areas that cannot support an inpatient
hospital.
Evaluating Access to Care in Rural Areas
Each year, the Commission assesses Medicare beneficiaries' access to
health care services. To conduct that assessment, we survey
beneficiaries, interview beneficiaries in focus groups, and analyze
Medicare data on beneficiaries' use of services. We frequently examine
variation in Medicare spending and use of health care services in rural
areas across the country, and we visit rural areas with different
demographic and practice pattern characteristics. In general, we find
that beneficiaries in rural areas use similar levels of hospital
services as beneficiaries in urban areas (Medicare Payment Advisory
Commission 2017, Medicare Payment Advisory Commission 2012). More
broadly, beneficiaries in rural and urban areas also report similar
levels of satisfaction with their access to routine care, even though
some rural beneficiaries have to travel outside their area to obtain
care. (On average, rural beneficiaries travel farther for routine care
and obtain about 30 percent of their routine care in urban areas
(Medicare Payment Advisory Commission 2012).)
However, while, on average, rural and urban beneficiaries use similar
levels of health care services and express comparable satisfaction with
their care, there are beneficiaries in some rural communities who may
have difficulty accessing emergency care. When a hospital that serves
an isolated community closes, even though beneficiaries may be able to
travel and receive their nonemergent, planned hospital care in other
locations, the Commission is concerned that beneficiaries may not be
able to access emergency care in a timely fashion.
The recent increase in small rural hospital closures has underlined the
Commission's concern. Fifty-one rural hospitals closed between 2013 and
2017 (Young 2018).\1\ Among those closures were 22 critical access
hospitals. While 28 of the hospitals that closed were located less than
20 miles from the nearest hospital (suggesting that there may have been
excess capacity in these markets and that beneficiaries have
alternative sources of hospital care), 21 of the closed hospitals were
located between 20 miles and 35 miles from the nearest hospital, and 2
were over 35 miles from the next nearest hospital.
---------------------------------------------------------------------------
\1\ We generally define rural as all areas outside of metropolitan
statistical areas (MSAs). This definition of rural includes
micropolitan areas. Others have a broader definition of rural areas
that includes some small towns within MSAs.
Medicare's Special Payments to Rural Hospitals Are Not Targeted to
Preserve Access to Emergency Services
In addition to evaluating beneficiary access to care, the Commission
also examines the adequacy of Medicare payments to providers. In
general, our analyses have found that the adequacy of fee-for-service
(FFS) payments to rural hospitals does not differ systematically or
significantly from the adequacy of urban hospitals' payments. However,
the financial performance of rural hospitals varies, and some of the
smallest rural hospitals have had the most financial trouble,
potentially creating problems for beneficiary access to hospital care.
To support beneficiary access to hospital care, over time the Medicare
program has implemented several adjustments that increase hospital
payments. For example:
Sole community hospital (SCH)--SCHs are hospitals that are at
least 35 miles from the nearest hospital that is paid under Medicare's
inpatient prospective payment system (IPPS). More than 300 hospitals
are eligible for this program. Payments to SCHs for inpatient services
are based on the SCH's historical costs, updated for inflation. This
program increased payments to participating hospitals by about $1
billion in 2015, relative to the IPPS rates that would have otherwise
applied.
Medicare-dependent hospital (MDH)--MDHs are hospitals with high
shares of Medicare patients (60 percent of days or discharges). About
150 hospitals are eligible. In this program, hospitals receive an
increase to their inpatient payments that is based 75 percent on the
MDH's costs and 25 percent on IPPS rates. Medicare payments to MDHs
were about $100 million higher in 2015 than they would have been under
the IPPS.
Critical access hospital (CAH)--CAHs are small rural hospitals
with 25 or fewer acute care beds. About 1,300 hospitals are designated
as CAHs. Each is paid 101 percent of its Medicare costs for inpatient,
outpatient, and laboratory services, as well as post-acute skilled
nursing care in the hospital's swing beds (acute care beds that can be
used for post-acute nursing care). New CAHs must be 35 miles from other
hospitals, but many older CAHs were exempted from the distance
requirement. The program increased payments to CAHs by about $1 billion
in 2015 relative to IPPS rates; because of the way beneficiary
coinsurance is calculated for CAH services, the program also increased
beneficiary cost sharing by about $1 billion.
In some communities, these special payment policies have not preserved
access to high-quality, efficient care for two reasons: (1) these
special payments require hospitals to maintain inpatient status, and
(2) these special payments are linked to hospitals' costs.
The dilemma is that, for many rural communities, an expensive inpatient
delivery model may not be a financially viable option but, to receive
these special payments from Medicare, a hospital must maintain its
inpatient status and all of the associated costs (e.g., complying with
certain staffing and facility requirements). This dilemma has become
more acute because the volume of inpatient admissions in rural
hospitals has continued to decline.
For example, in 2016, the median number of inpatient admissions (all
payers) at CAHs reached fewer than one per day (Figure 1). (In that
same year, about 10 percent of CAHs had fewer than two admissions per
week.) Declining inpatient volume has important consequences for a
rural hospital's financial viability. As the number of admissions
falls, the hospital has fewer inpatients over whom to spread its fixed
costs. Thus, the cost per admission increases, undermining the
efficient delivery of care. In addition, Medicare's special payments to
rural hospitals are linked to inpatient volume, so a hospital's special
payments fall as volume declines. The drop in inpatient volume has thus
contributed to hospital closures.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
While the use of inpatient services in these hospitals has fallen, in
some communities the hospitals may still be needed as a source of
emergency care. However, under current policy, isolated communities
that want an emergency department (ED) must maintain a hospital with
inpatient capacity, even if the hospital does not admit enough patients
to be financially viable. This requirement can result in some hospitals
offering services (e.g., post-acute services, MRI services) to increase
their volume, even though the hospital may not be a relatively
efficient provider of that care.
The second reason why Medicare's special payments are poorly targeted
to maintain access to care is that payment is based on a hospitals'
costs. Thus, these policies provide little incentive for hospitals to
manage their costs, resulting in higher spending for the Medicare
program and for beneficiaries. In addition, cost-based payment is
poorly targeted because it focuses subsidies on a hospitals' historical
costs, rather than the access needs of beneficiaries in isolated
communities. The challenge for Medicare is to develop payment policies
that ensure access to efficient emergency care in rural communities
where it is not financially viable to support a costly inpatient
facility, while also protecting the taxpayer and beneficiary dollars
used to finance the program.
The Commission's Recommendation for a New Payment Option for Rural
Communities to Maintain Access to Emergency
Services
In our June 2012 report to the Congress, the Commission set out three
principles for designing special payments to preserve access to care in
rural areas:
Payments should be targeted toward low-volume isolated
providers_that is, providers that have low patient volume and are at a
distance from other providers.
The magnitude of special rural payment adjustments should be
empirically justified. That is, the payments should increase to the
extent that factors beyond the providers' control increase their costs.
Rural payment adjustments should be designed in ways that
encourage cost control on the part of providers.
With these principles in mind, the Commission has recommended a new
approach for Medicare payment that would give communities options in
choosing how best to maintain access to needed emergency care.
Importantly, this approach would better target Medicare's subsidies and
would not require a significant increase in federal spending. As an
alternative to maintaining a costly inpatient-centered hospital, the
Commission recommends a new, voluntary payment model that would allow
Medicare to pay for emergency services at stand-alone EDs in isolated
rural areas (more than 35 miles from another ED). The rural facility
would have an ED that is open 24 hours a day and seven days a week, but
it would not provide acute inpatient care. The facility could retain
other services such as ambulance services and outpatient clinics. We
refer to the combination of the stand-alone ED and its affiliated
outpatient services as an outpatient-only hospital. Isolated rural
full-service hospitals that choose to convert to outpatient-only
hospitals would receive the same standard Medicare outpatient
prospective payment rates for ED visits as a full-
service hospital. (While the Commission's work has focused on the
conversion of existing inpatient-centered facilities to this new model
of care, new outpatient-only hospitals could also participate in the
program to provide access to needed emergency services in communities
that do not currently have access.)
In addition, to help cover facilities' fixed costs, Medicare would make
a set annual payment that would be the same across all outpatient-only
hospitals. Unlike the current cost-based special payments, hospitals
with higher cost structures would not receive a higher payment. In
addition, the fixed payment would be the same regardless of ED volume,
so as not to encourage unnecessary ED use.
If an inpatient hospital chooses to convert to an outpatient-only
hospital, we expect that the financing and delivery of care would
change as follows:
Isolated rural hospitals choosing to forgo acute inpatient
services would qualify to receive an annual fixed payment from
Medicare. The hospital would have discretion on how to use that fixed
payment, enabling the hospital to support the costs of operating an ED,
so that beneficiaries in that community would maintain access to
emergency services. Medicare would pay for emergency services in the
outpatient-only hospital under the outpatient PPS.
Shifting from CAH cost-based rates for outpatient services to
outpatient PPS rates would lower beneficiary cost sharing dramatically.
The Commission estimates that Medicare beneficiaries could see their
coinsurance fall by 70 percent or more. This is because beneficiaries'
coinsurance at CAHs is set at 20 percent of charges, which is often
close to the full payment amount that Medicare would otherwise make
under the outpatient PPS (Medicare Payment Advisory Commission 2016,
Medicare Payment Advisory Commission 2011).
Beneficiary access to scheduled, nonemergent inpatient services
would be preserved as patients would be redirected to neighboring
hospitals.
Eliminating services that can be more efficiently delivered in
centralized regional facilities (e.g., MRI services) would
substantially lower costs relative to existing models.
Some hospitals might choose to convert their inpatient beds to
skilled nursing facility (SNF) beds. SNF PPS rates would be applied to
the SNF services provided under the existing eligibility rules.
Any existing outpatient clinics would continue to operate
unaffected by the change in the hospital's status.
The Commission's Recommendation to the Congress
------------------------------------------------------------------------
-------------------------------------------------------------------------
The Congress should:
Allow isolated rural stand-alone emergency departments (more than
35 miles from another emergency department) to bill standard
outpatient prospective payment system facility fees, and
Provide such emergency departments with annual payments to assist
with fixed costs.
This new voluntary payment option would give rural providers greater
flexibility to maintain needed access to emergency services in
communities that cannot support a full-service hospital. Hospitals
would retain the option to convert back to their prior status. Medicare
beneficiaries would benefit from local access to emergency services and
reduced coinsurance.
The payment option would also preserve access to needed emergency
services without a significant increase in Medicare spending. The
policy would target existing Medicare payments and replace the cost-
based programs that have not preserved access to high-quality,
efficient care in some isolated rural communities.
------------------------------------------------------------------------
Note: This recommendation will appear in the forthcoming June 2018
report to the Congress.
Outpatient-Only Hospitals Could Switch Back to Prior Status
In determining whether or not to participate in the rural outpatient-
only hospital model, existing hospital boards would have to decide
whether they are willing to discontinue providing inpatient services
and convert to outpatient-only hospitals to best meet the needs of
their communities. Discontinuing inpatient services would be a
difficult decision for rural communities that have long been served by
hospitals that focused on inpatient care. To reduce the communities'
perceived risk of losing a full-service inpatient hospital, Medicare
could allow all small rural hospitals that convert to outpatient-only
hospitals the option of converting back to their prior status in the
future if the community determines that such a change is necessary.
While we expect this option of converting back to prior status would be
rarely used, allowing this option should make it easier for hospital
boards to make the initial decision to convert to an outpatient-only
hospital.
An outpatient-only hospital would also have the option of aligning with
its area's larger hospital system to support some functions at the
outpatient-only hospital. For example, the larger hospital system could
help with peer review of physicians, purchasing supplies, and billing
for services. Under this option, the new outpatient-only hospital could
work cooperatively with other healthcare providers to ensure continuity
of care across settings.
It is not clear how many providers would choose to convert from an IPPS
hospital or CAH status to an outpatient-only hospital under this
policy. The decision would in part be determined by the size of the
fixed payment and how the program was targeted. The fixed-payment model
we discuss is targeted to isolated providers only; isolated could be
defined as a certain driving distance from other EDs. We use the 35-
mile criterion because under current Medicare regulations, EDs can bill
Medicare for emergency services if they are affiliated with a hospital
that is within 35 miles. Thus, communities within 35 miles of another
hospital already have an existing payment method that would support an
ED to ensure access to emergency care. In addition, the 35-mile
criterion is the limit currently used in the SCH and CAH programs.
Summary
Maintaining emergency access in rural areas is challenging because of
declining populations in many rural areas, coupled with a payment
system that is tied to an expensive inpatient delivery model and
hospitals' costs. Creating a voluntary payment model to support
outpatient-only hospitals in isolated rural communities will help those
areas maintain the capacity to provide emergency services, ensuring
beneficiary access to necessary services. The Commission's
recommendation would provide an annual fixed payment to support the
costs of operating an ED and would allow qualified outpatient-only
hospitals to receive outpatient PPS payment rates. This policy would
also reduce cost sharing for rural beneficiaries dramatically.
The Commission has long recognized the unique challenges with access to
care facing rural Medicare beneficiaries and has continuously supported
the development of targeted payment policies to ensure appropriate
access while protecting the taxpayers and beneficiaries whose dollars
finance the program. The Commission looks forward to continuing to be a
resource for the Committee as it develops its policies to achieve the
goal of ensuring access to efficient, high-quality care for rural
beneficiaries.
References
Medicare Payment Advisory Commission. 2017. Regional variation in
Medicare Part A, Part B, and Part D spending and service use.
Washington, DC: MedPAC.
Medicare Payment Advisory Commission. 2016. Report to the Congress:
Medicare and the health care delivery system. Washington, DC: MedPAC.
Medicare Payment Advisory Commission. 2012. Report to the Congress:
Medicare and the health care delivery system. Washington, DC: MedPAC.
Medicare Payment Advisory Commission. 2011. Medicare copayments for
critical access hospital outpatient services--2009 update. Report
prepared by staff from RTI International for the Medicare Payment
Advisory Commission. Washington, DC: MedPAC.
Young, S. 2018. Personal communication with Sarah Young, Federal Office
of Rural Health Policy.
______
Prepared Statement of Konnie Martin,
Chief Executive Officer, San Luis Valley Health
Thank you for the opportunity today to share our healthcare story.
I am the CEO of a small health care system located in the San Luis
Valley, which is a rural, agricultural-based community in southern
Colorado. We serve 6 counties, an area roughly the size of
Massachusetts, and are the safety net for our nearly 50,000 community
members. Two of our counties are the poorest in Colorado; nearly 70
percent of our patients are covered by Medicare or Medicaid, with less
than 20 percent having commercial insurance. With this challenging
payer mix, we constantly struggle to remain financially viable. SLVH
and rural hospitals around the country are appreciative of this
committee's commitment to rural communities, and we are hopeful that
meaningful help is on the way.
Our system is comprised of a 49-bed sole community hospital and a
17-bed Critical Access Hospital. We operate 5 rural health clinics -2
of which are provider-based. This past year we provided 2,500 hospital
visits, 58K outpatient services, and over 65K clinic visits. We are a
Level III trauma center and the only facility that delivers babies,
provides surgery or any type of specialty care for 120 miles in any
direction. We serve veterans, farm workers, college students, tourists
and our own friends and family. We are a resilient and creative team of
health care providers.
We are the largest employer in our region and employ over 800
staff. Many of them have lived in our community their entire lives--and
their families for generations. As for me, I moved to the Valley in
1985, and began my health care career in an entry-level IT position--
back when the personal computer was new technology--and have worked my
way into my current CEO role.
Our staff struggles with the costs of meeting regulatory
requirements, which are often different--and sometimes conflicting
across payers. Our system must report on dozens of measures for the
Medicare quality and pay-for-performance programs. However, our private
insurers ask us to report yet more--some on the very same topic, but
using different definitions. This complex and confusing data reporting
takes time away from what really matters--delivering on our health care
mission.
Recruiting and retaining a qualified workforce is another major
challenge for rural providers. We have been fortunate to form
partnerships with local and State schools that help develop and
maintain our workforce. Specifically, we have multiple ``grow your
own'' programs--from paramedic training, hosting medical students,
internships, and mentoring those pursuing a healthcare MBA. We
collaborate with the local community health center to host a Rural
Residency Training Track Program. We are set to have the first 2
physicians complete their training in June 2019.
We have our own work force success story to celebrate with two
family medicine physicians who returned to their childhood homes to
care for their friends and neighbors. And, we have a physician who came
during college to serve as a volunteer at a local shelter, and today
he's a surgeon in our organization.
Rural communities pride themselves on hard work and taking care of
their own. However, Federal payment systems and delivery models must
recognize the unique circumstances of providing care in rural
communities, and must be updated to meet the realities and challenges
of how health care is delivered today and in the future. About 10 years
ago, the critical access hospital that is part of our system approached
us for help. Nearing closure and in dire financial condition, we
entered into a partnership to provide management services and financial
support. Then, in 2013, this CAH fully merged into the system that is
today, SLV Health. This type of arrangement prevented a hospital
closure, but such partnerships are not available to many rural
hospitals. And we see the result with 83 rural hospitals closing since
2010 and 12 CAHs in CO currently are operating in the red today.
Therefore, I am here today to ask for your support and
consideration for new financial models that consider our needs,
including the creation of a 24/7 rural emergency medical center
designation, such as the AHA has recommended, and that Sen. Grassley
has championed. And I ask you to provide appropriate resources,
flexibility, and ongoing dialogue with those of us in rural America who
stand ready to innovate, work hard, and meet the current challenges of
caring for our friends and neighbors. In a country as great as ours,
where you live should not determine if you live.
Again, thank you for having me here today.
Thank you for the opportunity today to share our health care story.
I am the CEO of San Luis Valley Health (SLVH), a small health care
system located in the San Luis Valley, which is a rural, agricultural-
based community in southern Colorado. We serve six counties, an area
roughly the size of Massachusetts; and are the safety net for our
nearly 50,000 community members. Two of our counties are the poorest in
Colorado. Nearly 70 percent of our patients are covered by Medicare or
Medicaid, and less than 20 percent have commercial insurance. With this
challenging payer mix, we constantly struggle to remain financially
viable. SLVH and rural hospitals around the country appreciate this
committee's commitment to rural communities, and we are hopeful that
meaningful help is on the way.
Our system is comprised of a 49-bed sole community hospital (SLVH
Regional Medical Center or RMC) and a 17-bed Critical Access Hospital
(Conejos County Hospital or CCH). We operate five rural health
clinics--two of which are provider-based. This past year we provided
2,500 hospital visits, 58,000 outpatient services, and over 65,000
clinic visits. We are a Level III trauma center and the only facility
that delivers babies, provides surgery or any type of specialty care
for 120 miles in any direction. We serve veterans, farm workers,
college students, tourists and our own friends and family. We are a
resilient and creative team of health care providers.
We are the largest employer in our region and employ over 800
staff. Many of them have lived in our community their entire lives--and
their families for generations. As for me, I moved to the Valley in
1985, and began my healthcare career in an entry-level IT position--
back when the desktop computer was new technology--and have worked my
way into my current CEO role.
Rural Hospitals are facing significant challenges across the
country with 83 rural hospitals closing since 2010. Currently 12 CAHs
in Colorado are operating in the red. Regulatory burden, limited
resources, challenging payer and patient mix, and geographic isolation
are among the key hardships facing rural hospitals. For example, our
staff struggles with the costs of meeting regulatory requirements,
which are often different--and sometimes in conflict across payers. We
must report on dozens of measures for the Medicare quality and pay-for-
performance programs. However, our private insurers ask us to report on
yet more measures--some on the very same topic, but using different
definitions. This complex and confusing data reporting takes time away
from what really matters--delivering on our health care mission.
Recruiting and retaining a qualified workforce is another major
challenge for rural providers. SLVH has been fortunate to form
partnerships with local and State schools that help develop and
maintain our workforce. Specifically, we have multiple ``grow your
own'' programs--from paramedic training, hosting medical students,
internships, and mentoring students pursuing a healthcare MBA. We
collaborate with the local community health center to host a Rural
Residency Training Track Program and are set to have the first two
physicians complete their training in June 2019.
overview of health care in rural colorado
Nearly 750,000 people live in Colorado's 47 rural counties.
CAHs and Rural Health Clinics (RHC) were established to
provide access to care in rural communities. Rural Colorado has
older, sicker, poorer patients than its urban counterparts.
CAHs and RHCs do not have a high-volume patient population to
provide care without cost-based reimbursement.
In Colorado's rural counties 30 percent-60 percent of
patients are on Medicaid and Medicare, and some facilities see
upwards of 70 percent Medicare and Medicaid patients (78
percent in Costilla County, 68 percent in Huerfano, 54 percent
in Delta County--see dark red counties below, data is from
County Health Rankings, geocoded by Colorado Rural Health
Center, the State Office of Rural Health as of May 2016).
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
overview of san luis valley health system
SLVH is an essential health care system with roots tracing back to
the 1920s when a group of concerned Lutherans accepted the
responsibility of management and operation of Alamosa Community
Hospital. The organization's mission, ``To be a premier, fully-
integrated rural health care system providing exceptional, patient-
centered services to the San Luis Valley,'' directs its partnerships
between patients, families, and health care providers and the
strategies that drive current organizational priorities and program
services.
SLVH is a non-profit, 501(c)(3), that provides various forms of
health care services to nearly 50,000 residents who make up the total
population. SLVH Regional Medical Center (RMC) offers the only nearby
Level III Trauma Center that offers 24/7 access to orthopedic and
general surgeons. SLVH RMC also offers the only labor and delivery unit
within 120 miles, which means that patients do not have to travel over
a mountain pass to deliver their newborns. SLVH Conejos County Hospital
(CCH) Emergency Department (ED) uniquely serves residents in two of the
State's poorest counties, Conejos and Costilla, and northern New
Mexico. Rio Grande Hospital distinctly serves the west end of the SLV.
Three counties in the SLV region do not have a hospital.
SLVH also includes a physician service practice that provides
primary and specialty services, behavioral health, and other ancillary
services--three of its five clinics are designated as RHCs and two are
designated as provider based. SLVH partners and collaborates with each
SLV hospital, all local clinical providers and nursing staff, in
addition to other relevant community partners such as behavioral
health, law enforcement, health and human services, to ensure that
resources are maximized and not duplicated in a manner that benefits
optimal patient outcomes. The true beneficiaries of this level of care
are all the residents who have access to a reliable health care system
that provides quality health care services to all patients, regardless
of where they live or ability to pay. A geographic illustration of the
SLV region and SLVH hospital designations are provided below:
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
community and geography
The SLV is the largest and highest valley in North America,
surrounded by three mountain ranges that effectively isolate the Valley
from the rest of Colorado. The region spans 8,194 square miles and is
comprised of six counties covering Alamosa, Conejos, Costilla, Mineral,
Rio Grande and Saguache Counties. According to the 2017 U.S. Census
Bureau Population Estimates Program, the total population is 47,204,
with rich diversity represented by a sizeable Hispanic population (41
percent compared to 21 percent statewide) as well as a significant
population of indigent and migrant farm workers. Close to one third of
the population (28 percent) speaks a language other than English at
home, compared to a rate of 17 percent in Colorado (U.S. Census Bureau,
American Community Survey (ACS) and Puerto Rico Community Survey
(PRCS), 5-year Estimates).
Three of our six counties are designated rural and three are
frontier. Frontier areas are sparsely populated rural areas, which are
isolated from population centers and services and are defined as
counties having a population density of six or fewer people per square
mile. This definition does not take into account other factors that may
isolate a community such as challenges in accessing public
transportation, affordable housing, health and human services, and
other social support. Of the six counties in the region, two are among
the five poorest counties in Colorado. 22 percent of the population
lives below poverty level (compared to 11 percent for Colorado), and
(in 2016 dollars) median household income levels of $35,897 fell short
of the State's comparable $62,520 (U.S. Census Bureau, ACS and PRCS, 5-
Year Estimates). Economic, cultural and other social determinants of
health exacerbate geographic and other challenges of providing health
care services. The number of persons in the SLV without health
insurance, under age 65 years averages 12.5 percent, compared to the
State average of 8.6 percent (U.S. Census Bureau, QuickFacts). Seventy-
one percent of patients served at SLVH in 2017 were enrolled in
Medicare and/or Medicaid. In fiscal year 2016-17 SLVH provided
$1,126,323 in charity care, not including $1,758,532 in bad debt.
Importantly SLVH provides services to all patients regardless of their
ability to pay.
Social determinants of health, the geographic expanse of the SLV
region, inadequate reimbursements, regulatory burden and other factors
pose public health challenges for residents and the health care system.
Coordinating health care services across the continuum of care is mired
with complications rooted in these factors as well as information gaps
occurring at the point of service and siloed information systems.
Additionally, there are significant costs associated with maintaining
and updating aging facilities (dating back to the 1920s (RMC) and 1960s
(CCH)) and outdated equipment, which are not factored into
reimbursement. Through all of this, SLVH perseveres in its goal of
providing health care services that meet the needs of its community
while also meeting the standards of care in line with Colorado's other
health care providers, hospitals, and designated trauma centers.
aligning services with community needs
SLVH and rural hospitals around the country constantly work to
match the services they provide to the needs of their communities.
Every three years, SLVH conducts a community health needs assessment
involving community stakeholders and patient feedback. The primary need
identified during the 2016 survey was addressing substance abuse and
mental health. This aligned with an analysis commissioned by the
Colorado Office of Behavioral Health regarding substance use disorder
services that documents gaps and needs that are significant and varied,
and underlines that nearly every population (in Colorado) is
underserved. These needs correlate directly with current demographics
that indicate residents in the SLV report a higher incidence of poor
mental health days compared to State and national rates. (Robert Wood
Johnson Foundation, 2017 County Health Rankings and Roadmaps). Ranking
data also shows SLV counties have fewer mental health provider ratios
(except for Alamosa County).
In addition, just as in the rest of the Nation, an increasing
number of residents in the SLV are experiencing opioid dependence,
abuse or misuse, and/or addiction, and many are turning to heroin and
other cheap alternatives. These disorders are often associated with
chronic physical illnesses such as heart disease and diabetes, and when
one is out of control, it affects the other. These disorders also
increase the risk of physical injury and death through accidents,
violence, and suicide. Overall, only about half of those affected
receive treatment according to the National Institute of Mental Health.
SLVH has provided Behavioral Health (BH) services in its busiest
primary care clinic since 2011, and has increased BH staffing
throughout primary care clinics, including the use of Care
Coordinators, who help connect and engage patients in their own self-
management beyond clinic exam rooms. Currently all SLVH primary care
clinics provide Screening Brief Intervention Referral and Treatment
(SBIRT), Drug Abuse Screening Tests (DAST), Pain Management Agreements,
prescription drug monitoring, referral to medication assisted
treatment, social supports and care coordination for patients who are
at risk or are already abusing substances. Other ancillary supports
include physical therapy and chiropractic treatment. BH staff
participate in the development of integrated BH treatment plans and
follow up on emergency room and hospital admissions in order to
positively impact clinical outcomes, patient-provider satisfaction, and
cost of care. SLVH EDs are implementing clinical guidelines for
alternatives to opioids to help address the opioid epidemic and prevent
future misuse. (Please see the attached SLVH Opioid Puzzle.)
commitment to quality and safety
SLVH is dedicated to providing high quality care to our patients,
and participates in many quality measurement and improvement efforts.
While we are proud of our performance, many of the current measures and
methods of publicly reporting our quality data do not fully reflect the
quality care our patients receive in our facilities. SLVH provides safe
and high quality clinical services and demonstrates superior outcomes
by assessing performance with objective and relevant measures, however
not all mandated measures are applicable or reflective of true patient
care services.
SLVH's Quality and Safety Plan is a collaborative effort with
SLVH's Quality and Safety Department, Risk Management, all clinical
services, and the medical staff. All departments of the organization
develop annual goals to address and support improvement of the care,
treatment, service, efficiency, and safety of outcomes that align with
the organization's overall mission.
The Quality and Safety Department utilizes many resources to
identify areas of improvement for SLVH, such as: Event Reporting
System, HAC, Culture of Safety Survey, Core Measures, HCAHPS/CGCAHPS,
MACRA/MIPS, HQIP, MBQIP, QualityNet, etc. The chart on the following
page helps illustrate the number of regulatory agencies to which SLVH
reports, as well as the number of initiatives and metrics on which we
report. It also provides a crosswalk of the number of metrics reported
to multiple agencies. As this chart clearly illustrates, the staff time
required for data input, the time required for manual abstraction, and
other administrative resources needed to fulfill the reporting
requirements render these metrics and methods of reporting antiquated
and ineffective.
Targeted regulatory reform is needed to allow rural hospitals to
report meaningful, accurate quality measures aligned with the services
provided and that account for the challenges of measuring in the rural
environment, including low patient volumes, the wide variation in
service mix and socioeconomic factors. Rural hospitals want to be
recognized for the quality of care we are providing, however we need
the right measures and methods for reporting. (Please see the Metric
Crosswalk on the following page.)
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Rural hospitals face the same complex reporting and regulatory
requirements as larger urban facilities, but with fewer available
technology supports and financial and staff resources. As mentioned
above, data submitted through registries and vendors requires hours of
manual abstraction. One-size-fits-all metrics are not an accurate way
to measure clinical care, nor do they add value to health delivery
processes in rural areas. Oftentimes the metrics do not apply to low-
volume service lines or match the needs of the community identified in
the health needs assessment. For example, SLVH maintains an average
daily census of less than one in its Intensive Care Unit (ICU), but is
still required to report specific ICU measures, such as infections from
catheters and central lines. Although the organization has been
fortunate to report no central line infections in several years, SLVH
is still required to use a registry to identify all eligible patients
and to abstract data from their charts into a national reporting
system. There is no applicability, and this information does not
provide a meaningful comparison against similar organizations. These
metrics are based upon volume standards much larger than SLVH.
Another example, in the last year: SLVH had one catheter associated
urinary tract infection in its ICU, but because patient days are so
low, the overall rate of infections looks disproportionately high. This
causes confusion and frustration among caregivers and instills a lack
of confidence in our patients seeking safe and reliable care. These
metrics also impact SLVH's CMS star rating and potentially
reimbursement through programs like Value Based Purchasing.
SLVH remains completely committed to providing safe and effective
health care and to being accountable for the delivery of quality health
care services through established metrics. However, rural providers
need the flexibility to report data on measures which reflect its
services and patient population. An example of a meaningful quality
improvement metric is the reduction of early elective deliveries. SLVH
RMC serves as the only hospital in the SLV that delivers babies. A few
years ago, staff recognized an uptick in early elective deliveries.
Providers and nurses developed a process improvement plan and over the
course of 18 months reduced early elective deliveries from 10 percent
to 0 percent. This is great example of a quality metric that was
meaningful, relevant and resulted in safer and more affordable patient
care. Each rural hospital has their own unique story about their
patient population and needs the flexibility to identify priorities
based upon data, patient population and community health needs
assessment data to identify a menu of reporting metrics. Rural
providers also need to be benchmarked against similar peers so that the
ratings are more meaningful and add context.
meaningful use and electronic health records
Meaningful Use (MU) reporting is another area that deserves careful
consideration. SLVH implemented its Electronic Health Record (EHR) in
2013, and 2018 will be the sixth year of reporting. We initially
participated in the program because of the opportunity it held for
improving patient care and shared investment in the adoption and use of
EHRs. For example, the incentive potential was meaningful as both RMC
and CCH Hospitals are dual eligible, which means incentives were
possible under both Medicare and Medicaid. However, the incentive funds
were not enough to address the ongoing costs of the program, including
updating and maintaining the technology. Currently, SLVH attests to
Medicare MU because reporting is required to avoid payment penalties.
We no longer report to Medicaid MU.
MU criteria is constantly changing, which presents challenges for
any provider, but especially rural providers. SLVH's EHR vendors
struggle to provide adequate updates to our system to pull the required
information. Each time there is a criteria change, an EHR update is
required and SLVH must invest more time, resources and funding in order
to meet MU requirements or face a penalty. Furthermore, pulling reports
from Practice Partner (outpatient EHR) for eligible clinicians is time
consuming. And not all meaningful use measures are relevant to SLVH,
particularly at CCH where patient volume results in a low denominator
for the calculation. The only electronic clinical quality data SLVH
submits for CCH are ED throughput and VTE measures.
Additionally, the EHR has presented unintended challenges for
clinicians, who now must report in the MACRA system. Physician
attention is too often focused on clicking certain fields in the EHR
instead of focused on the patient. Several measures hold the physician
accountable for actions outside of the physician's control--such as the
Patient Portal and Secure Messaging.
flexibility and alternative payment models for critical access
hospitals and small rural hospitals
About 10 years ago, Conejos County Hospital (CCH), the critical
access hospital that is now part of our system, approached us for help.
Nearing closure and in dire financial condition, we entered into a
partnership to provide management services and financial support. Then,
in 2013, this CAH fully merged into the system that is today SLVH. This
type of arrangement prevented a hospital closure, however it is
important to note that such partnerships are not available to many
rural hospitals.
The frontier county CCH serves is home to 8,200 people in an
agricultural dependent area, larger in square miles than the State of
Rhode Island. The poverty rate for Conejos County is just above 22
percent, and the payer mix of CCH is 80 percent Medicare and Medicaid.
Cost based reimbursement has allowed the hospital to reduce its
financial vulnerability and maintain access to essential services in a
vulnerable area of the State. This reimbursement model has also
provided flexibility in staffing and services, access to Flex Program
resources and grants, and the inclusion of capital improvement costs in
allowable expenses. By maintaining a modest, but positive margin, CCH
has been able to make improvements in its existing facility, replace
vital patient care equipment, and meet regulatory requirements. SLVH
CCH has also been able to recruit health care professionals to an
underserved area. Again, these partnerships are not available to all
struggling CAHs who are facing decisions about reducing or eliminating
services or even closing.
Because of our partnership, SLVH has been able to streamline CCH
and RMC services and costs to ensure the highest quality of services
and efficiencies, with an eye toward providing services within CCH that
meet the community's unique needs. With its aging population, the needs
for diagnostic services, therapy, past-acute rehabilitation (swing
beds), and 24-hour emergency services have emerged as the community's
most pressing needs. The number and type of inpatient services offered
at CCH have declined over the last ten years. This dramatic decrease in
market share for inpatient services is illustrated in the chart below,
which highlights the decline in inpatient services and rise in demand
for ED patients, swing, observation, and other outpatient services.
------------------------------------------------------------------------
------------------------------------------------------------------------
Year Reported 2014 2016 2017
------------------------------------------------------------------------
Inpatient Market Share 37.1% 23.8% 15.4%
------------------------------------------------------------------------
Outpatient Market Share 37.5% 48.1% 49.3%
------------------------------------------------------------------------
As rural health care facilities continue to adapt to the changing
needs of our patient population, we need the tools and flexibility
necessary to innovate and respond. Alternative payment models, such as
a 24/7 rural emergency department designation would provide an option
for certain small rural hospitals struggling to maintain access to care
in their communities. The creation of a 24/7 rural emergency medical
center designation, has been recommended by the American Hospital
Association (AHA) Task Force on Ensuring Access in Vulnerable
Communities. Senators Chuck Grassley and Amy Klobuchar have introduced
bipartisan legislation in the Senate to establish such a designation
under the Medicare Program. Similar bipartisan legislation has also
been introduced in the House by Representatives Lynn Jenkins and Ron
Kind.
workforce challenges
Recruiting and retaining a qualified workforce is another major
challenge for rural providers. SLVH has been fortunate to be able to
develop partnerships with local and State schools to help develop and
maintain our workforce. Specifically, we have multiple ``grow your
own'' programs--from environmental systems maintenance programs through
technical school education to nurse professional programs through our
local junior college and Adams State University. We partner with
medical schools, advance practitioner training programs, physical
therapy and pharmacy schools, and many others. We use innovative
strategies to educate and train those who desire to work and live in a
rural community. This partnership provides meaningful employment
opportunities while serving our community's healthcare needs.
SLVH collaborates with the local community health center to host a
Rural Training Track Residency Program. We are set to have our first
two physicians complete their education in June 2019. We have around
100 physicians in our community; only two of those are in private
practice: the other 98 are employed. We are at the forefront of
provider-hospital integration driven by the financial necessity of
collaborating.
Federal programs currently exist to help make it easier for
physicians to practice in rural areas. It would be helpful for Congress
increase the number of Medicare-funded residency positions and extend
the Conrad State 30 J-1 visa waiver program.
conclusion
Rural hospitals and communities pride ourselves on hard work and
taking care of our own. However, Federal payment systems and delivery
models must recognize the unique circumstances of providing care in
rural areas, and be updated to meet the realities and challenges of how
health care is delivered today and in the future.
SLVH's two hospitals are the anchors of the health care
infrastructure in our region. However, the fixed costs of providing
care in rural communities is an ongoing challenge. We must maintain and
update our facilities, and medical equipment and hire, train and retain
highly skilled staff. Additionally, regulatory burden, geographic
isolation, low patient volumes, limited resources and a challenging
payer and patient mix are also hardships we deal with every day. Some
recommendations to address these challenges are listed below.
Support models allowing for adjustments in what defines a
CAH, including the creation of a 24/7 rural emergency medical
center designation, such as the AHA has recommended.
Reduce the number of metrics, streamline metrics across
regulatory agencies, and establish clear definitions of the
metrics required.
Change the regulations to allow true integration of care.
Clarify the unnecessarily burdensome regulations around co-
location, removing those that serve as barriers to integrating
care in rural communities. Co-location saves the system
resources and allows rural facilities to offer a broader range
of serves in a cost effective manner.
Support flexible models for telehealth: In order to help
deal with the severe workforce shortages allow rural facilities
to be an originating site for telehealth. Remove barriers so
that rural facilities may fully utilize telehealth services.
Support existing Federal programs to help make it easier for
physicians to practice in rural areas: increase the number of
Medicare-funded residency positions and extend the Conrad State
30 J-1 visa waiver program.
I thank this committee for the opportunity to speak today and
appreciate your commitment to deliver meaningful reforms and resources
that will help us in rural communities meet the current challenges of
caring for our friends and neighbors. In a country as great as ours,
where you live should not determine if you live.
______
Questions Submitted for the Record to Konnie Martin
Questions Submitted by Hon. Orrin G. Hatch
Question. I was very intrigued by your comments about designing
rural quality measures. My understanding is that the National Quality
Forum is expected to issue a final report in August that identifies a
core set of relevant rural measures. While I know that rural hospitals
and providers want to show how high quality their services are, they
often cannot report on the same types of measures as urban facilities.
In fact, some rural stakeholders have told me that the NQF measure set
is actually more focused on process measures than on outcomes measures,
which could increase rural hospital and provider reporting burdens. Do
you have any specific suggestions on how Congress could most
effectively implement value based reimbursement for Critical Access
Hospitals?
Answer. Rural hospitals value quality and safety. I believe most
have programs and processes in place that demonstrate the quality of
services they provide. We should be measured and evaluated on services
we provide consistently and in a high enough volume to provide a true
picture of the outcome. Some options for consideration include: (a)
urging NQF to allocate measure development dollars towards filling gaps
in rural measurement--for example, rather than evaluating existing
measures to determine if any could be applied to rural providers, NQF
should seek to address measurement gaps (e.g., access, assessing when
to transfer patients, etc.); and (b) requesting that CMMI test a
voluntary demonstration of a Value Based Purchasing (VBP)-like approach
for CAHs.
Currently, rural providers are not wholly unaffected by VBP. The
MACRA's MIPS program, for example, has no statutory exclusion for rural
providers. Rather, it has a low-volume threshold that CMS can choose to
alter to include more/fewer clinicians. It is reasonable to expect that
as CMS lowers the low-volume threshold, more providers (including
method II CAHs with clinicians who have reassigned their billing rights
to the hospital) will participate in these programs.
Question. Because not every rural town can support a full-service
hospital, rural researchers, rural stakeholders, and non-partisan
public policy think tanks--such as the Bipartisan Policy Center--have
called on Congress to give States and communities more flexibility to
design locally driven health care solutions. One idea is to allow
small, rural hospitals to transform into rural emergency centers. Do
you think this is a good approach? What types of services, in general,
do you think a rural emergency center should offer?
Answer. Yes. I do support the establishment of a rural emergency
medical center designation under the Medicare Program, and believe that
it is right approach for keeping medical care in rural communities. In
addition, I agree with your statement that not every rural town can,
nor should, have a full-service hospital. Protecting emergency type
services in strategic geographic locations aids our healthcare system
in meeting the needs of rural residents. This designation would give
communities an important tool to maintain access to certain services
while improving financial viability and predictability. It unencumbers
rural facilities from the mandate to maintain inpatient services in
order to receive special Medicare designation status.
These facilities should offer essential health care services such
as emergency and outpatient services, along with additional services
that meet a community's specific needs. Additional services could
include post-acute, diagnostic, primary care, hospice/respite care,
etc. Regarding payment, I encourage Congress to consider a fixed
facility payment plus the outpatient rate for services. This approach
aligns with MedPAC's recent recommendation and is supported by the
American Hospital Association. Such a payment structure would provide
needed predictability by accounting for some of the high fixed costs of
operating a facility and unique challenges of providing services in
rural communities.
______
Questions Submitted by Hon. Michael B. Enzi
Question. Critical Access Hospitals can have up to 25 beds, but the
smaller ones in Wyoming often have only between two and ten of those
beds occupied on an average day. It is difficult to staff a 25 bed
hospital that only has two beds full. What can rural hospitals do to
maintain and improve efficiency when they face this kind of patient
volume?
Answer. Facilities in remote geographic locations with low
inpatient volume face significant challenges. I believe communities
should have flexibility to determine the health care services that best
meet their needs. For example, these low volume hospitals should have
the option to transition to a rural emergency medical center and select
outpatient services most needed by residents.
Additionally, reimbursement rates for outpatient services should be
increased. Currently, outpatient services are reimbursed at
significantly lower rates than inpatient services, making it more
difficult for providers to maintain access. The way reimbursement is
currently structured, many rural hospitals have no choice but to focus
on inpatient care over expanding services that might better align with
the needs of their community.
I am also an advocate for partnerships and affiliations when
possible. Our health-care system has both a PPS hospital and a CAH.
This partnership allows multiple opportunities for staff to learn from
one another and have the experience and volumes that keep us competent
and ready to care for our community.
Finally, ending the Medicare sequestration cuts, which reduce
payments by 2 percent, would significantly help CAHs, including those
with very low patient volumes.
Question. There has been a lot of focus on Critical Access
Hospitals, and rightfully so, but how is patient care delivered and
reimbursed in hospitals that are close to meeting the CAH designation
but not quite there, like Campbell County Health in my hometown of
Gillette?
Answer. I truly understand your point and the dilemma you
reference. Our health-care system has two hospitals; one is a PPS, Sole
Community Provider facility and the other a CAH. I recognize firsthand
the benefits and the shortcomings of both designations.
Hospitals that are too large to qualify for CAH status are often
too small to benefit from economies of scale. In cases where sustaining
inpatient care is problematic, I support options such as the
establishment of a rural emergency center designation. While it is not
a solution for every community, it could offer an option for increased
financial stability while maintaining access to essential services.
For rural hospitals that would not meet the CAH criterion of25 beds
or less, but remain geographically isolated, a Sole Community Hospital
designation can be beneficial. SCHs are eligible to receive higher
payments in order to maintain care access in their remote location.
I also know that the Rural Community Hospital (RCH) Demonstration
has been a lifeline for some hospitals by allowing cost-based
reimbursement under Medicare for certain rural hospitals with 26-50
beds. This and other alternative payment models should be available for
communities. Finally, improved reimbursement for outpatient services
and the elimination of Medicare sequestration would help address the
challenges faced by this category of hospitals,which is too large to
qualify for CAH status, but too small to benefit from economy of scale.
______
Questions Submitted by Hon. John Thune
Question. Ms. Martin, in your written testimony, you discuss
meaningful use and electronic health records as a challenge to rural
providers. Several members on the committee and I have long advocated
for ensuring that electronic health records do not cause undue
compliance burdens on providers. It's why we introduced the EHR
Regulatory Relief Act last year. CMS has since the proposed what seem
to be positive changes to meaningful use through the 2019 IPPS rule,
including a new scoring methodology that may help address some of our
concerns about the current all or nothing approach to meaningful use.
Have you had the opportunity to review these changes to the program?
Are they a good start, or what areas would you focus on?
Answer. Changes to the Promoting Interoperability Program included
in the IPPS Proposed Rule would offer much needed flexibility and
improvements; however, more is needed. Positive changes include the
proposed scoring methodology, which would eliminate required thresholds
and permit hospitals to get credit for building performance in some
areas while earning additional points in areas of strong performance.
Other flexibility and improvements include the allowanceof a 90-day
reporting period for 2019 and 2020; the reporting of four electronic
clinical quality measures for one quarter; and the removal of an
objective that hold hospitals and CAHs responsible for the actions of
others.
However, the Proposed Rule still requires hospitals to use 2015
Edition Certified EHR technology. Instead, balance is needed between
the positive move toward patient apps connecting to provider EHRs and
the real and developing risks that this approach raises for systems
security and the confidentiality of health information. Hospitals like
mine will take measures to secure systems, however, how this will be
evaluated when the rules against information blocking are enforced is
an area where greater clarity is needed.
The IPPS Proposed Rule provided important flexibilities and changes
to the Promoting Interoperability Program, however, it does not address
critical challenges hospitals have in successfully meeting its goals.
In the IPPS proposed rule, most of the points are available for health
information exchange among providers and provider to patient. Providers
that cannot meet one of the performance requirements are able to
receive an exclusion but they must make up the points through
additional health information exchange. Unfortunately, CMS offers
limited options for exchange. For example, providers that use a Health
Information Exchange cannot receive credit for using the HIE to support
health information exchange. This type of barrier to successfully
meeting the program goals should be addressed.
Your legislation is necessary because it would remove the ``all-or-
nothing'' approach to meeting the requirements of the program.
Providers must report something for every objective and every measure
in the program in order to successfully meet program requirements.
______
Question Submitted by Hon. Rob Portman
and Hon. Michael F. Bennet
Question. We have previously introduced legislation to encourage
providers to participate in alternative payment models and facilitate
care coordination, including the Medicare PLUS Act (S. 2498 in the
114th Congress) and the Medicare Care Coordination Improvement Act (S.
2051 in the 115th Congress). When we consider coordinating care for
patients in rural settings, what administrative burdens do you face?
What can Congress do to ensure that value-based care is effective in
rural areas?
Answer. As a rural facility leader, I have very little experience
with these type of ACOs and care coordination activities for the
Medicare population. I do not feel I can adequately answer your
question.
______
Questions Submitted by Hon. Ron Wyden
rural workforce
Question. As discussed during the hearing, the shortage of primary
and specialty care providers is a critical issue facing rural
communities across the country. In Oregon, 25.9 percent of residents
live in a health professional shortage area. Difficulty recruiting and
retaining physicians and other members of the care team can result in
longer patient wait times and reduced access to care for those living
in rural communities.
What concrete policy ideas would you suggest this committee pursue
to help attract more providers to rural America?
Answer. The following are policy ideas that could assist in rural
workforce issues: (a) increase the number of GME slots by passing the
Resident Physician Shortage Reduction Act of 2017 (S. 1301/H.R. 2267);
(b) pass the Conrad State 30 and Physician Access Reauthorization Act
(S. 898/H.R. 2141), to provide regulatory relief to international
physicians using J-1 visas who practice in rural and underserved areas;
(c) ensure the financial stability of rural hospitals through the
establishment of new and alternative payment models, adequate
reimbursement (e.g., increased reimbursement for outpatient services,
ending Medicare sequestration; telehealth coverage and reimbursement);
and (d) partnerships? local education?
rural beneficiary health needs
Question. Rural communities tend to be older, sicker, and lower
income compared to their urban counterparts. When rural hospitals are
forced to close their doors, Medicare beneficiaries living in the
surrounding areas often have limited health care options. The
prevalence of multiple chronic conditions among those living in rural
areas heightens the need to ensure all Medicare beneficiaries have
access to high quality care--regardless of where they live.
In your view, where should this committee focus its efforts to
ensure that Medicare beneficiaries living in rural areas (especially
those with multiple chronic conditions) have access to high quality
care?
Answer. This most important resource for supporting rural Medicare
beneficiaries is to keep the healthcare providers financially viable
and the care close to home: (a) ensure adequate coverage and
reimbursement rates for care provided in rural hospitals (including
telehealth services and remote patient monitoring technology); (b)
protect crucial designations and payment programs that support rural
providers such as the CAI-I and Sole Community Hospital designations,
and the Medicare Dependent Hospital, low-volume adjustment, and
ambulance add-on programs; (c) provide flexibility through alternative
payment models such as the establishment of a rural emergency medical
center designation; and (d) invest in broadband connectivity.
Question. What Medicare policy changes would be most impactful in
the short term and long term?
Answer. (a) Improved reimbursement rates for outpatient services;
(b) coverage and reimbursement of telehealth services; (c)
establishment of alternative payment models and additional
demonstration programs; and (d) end Medicare sequestration cuts.
telehealth
Question. Building on the proven success of telehealth in the rural
setting, Congress passed the CHRONIC Care Act earlier this year, which
expanded access to telehealth in Medicare to allow individuals
receiving dialysis services at home to do their monthly check wins with
their doctors via telehealth, to ensure individuals who may be having a
stroke receive the right treatment at the right time, to allow Medicare
Advantage plans to include additional telehealth services, and to give
certain ACOs more flexibility to provide telehealth services.
In your view, what, if any, Medicare payment barriers to adoption
and utilization of telehealth services remain in the rural setting
today?
Answer. I know I join other rural providers in applauding the work
of the Senate Finance Committee and others in Congress for passing the
CHRONIC Care Act and including additional funds in the FY 2019 omnibus
appropriations bill for the adoption of telehealth. These new policies
have given telehealth a much needed boost. Yet barriers to increased
adoption and utilization of telehealth remain.
Reimbursement for telehealth services is not always equal to care
provided in person. The costs associated with providing telehealth
services include the acquisition of expensive equipment, training and
operation costs, and maintenance. Rural hospitals often serve as
originating sites for telehealth (where patients physically go to
receive a service). However, even in cases where originating sites are
eligible to bill Medicare for a telehealth facility fee, the
reimbursement rates are marginal compared to the overall costs.
Increased investment is needed to expand broadband. According to
the FCC, 34 million Americans lack access to broadband--many in rural
locations. Broadband is necessary to provide telehealth and other
modern health-care services. For example, electronic health records,
health information sharing for coordinated care, and remote-monitoring
technologies all require broadband connections. In addition, these
technologies can help improve access to specialty services for patients
in rural communities, such as oncology and mental health and addiction
services.
Question. To the extent that barriers remain, what Medicare policy
changes would you suggest the committee consider to address them?
Answer. I would suggest the following: (a) increase coverage of
services and equal reimbursement for services provided through
telehealth arrangements and those provided in person, and help account
for the costs of acquiring, operating and maintaining equipment; (b)
expand technologies that may be used, including remote patient
monitoring; and (c) expand access to broadband.
______
Question Submitted for the Record by Hon. Debbie Stabenow
and Hon. Benjamin L. Cardin
dental care
Question. Lack of oral health care is a significant public health
problem in the United States. Significant health professional shortages
and lack of access to dentistry impacts rural and underserved
communities disproportionately. We know that our seniors are negatively
impacted by the lack of a dental benefit in Medicare. We also know that
children, families and people with disabilities who rely on Medicaid
and CHIP, programs which offer coverage for pediatric dental care and
sometimes care for adults, often struggle to find providers to see
them. Nowhere is the need for comprehensive dental coverage and access
to providers more profound than in our rural and underserved
communities. We have an opportunity to address the needs of our rural
and underserved communities by improving our health care system by
incorporating dental care more holistically through better coverage in
Medicare, Medicaid and CHIP, utilizing telemedicine, and assessing
provider and workforce gaps that can and should be filled in these
communities. Ms. Martin, what is the most important thing that we, as
the Senate Finance Committee, can do to improve dental care and
coverage for people living in rural and underserved communities?
Answer. As a hospital system, dental care is beyond our scope of
care. However, having spent my career in a rural community and had some
experience in a federally qualified health center, I believe that the
single biggest contribution we could make to improve dental health for
our community is to provide benefits for Medicare recipients. Most in
rural communities are living on small fixed income, and it is difficult
or maybe impossible, for them to afford the dental care needed. Dental
health plays a major role in overall health, and having coverage for
care is the answer for overall improved health.
______
Questions Submitted by Hon. Debbie Stabenow
maternity coverage
Question. We've heard from families and health-care providers in
Michigan who are concerned about access to maternity coverage in rural
areas. Close to 500,000 women give birth each year in rural hospitals
and often face additional barriers and complications. For example,
women in rural areas report higher rates of obesity, deaths from heart
disease, and child-birth related hemorrhages. In addition, more than
half of women in rural areas must travel at least half an hour to
receive obstetric care, which can lead to decreased screening and an
increase in birth related incidents.
Since 2004, a large number of rural obstetric units have closed,
and only increased the distances that mothers must travel in order to
receive maternity and delivery care. Unfortunately, the percent of
rural counties in the United States without hospital obstetric units
increased by about 50 percent during the past decade.
Do you have experience with loss of obstetric care for women within
your respective fields?
Answer. We continue to provide obstetric care for the women in our
community and see it as an essential community service. We are over 120
miles away from the next nearest facility that provides this service.
Without this care, our community would wither away. I cannot fathom how
a rural community can maintain its workforce and families without the
support of obstetric care. We have a strong commitment to obstetric
care and desire to maintain the services.
Having said that, obstetric care loses money. We have over 90
percent of our deliveries paid by Medicaid, which at this point only
covers about 80 percent of the cost of care. The only method by which
we can keep this service is to cost shift onto those services that
provide margin.
We currently employ 3 OB/GYN physicians and 2 nurse mid-wife
providers. This compliment of professionals are able to find the right
work/life balance and maintain skills to support our community. We
trained our nurse midwife team through a ``grow your own'' program by
providing resources for education and employing them through the
training process. They are strongly committed to this community and our
organization in this partnership.
Question. What steps should be taken to ensure that the proper
range of maternal care services are being offered through innovative
rural health models?
Answer. As Congress considers new and alternative payment models
for rural providers, it should ensure that the Medicare and Medicaid
Programs adequately reimburse them so that they are financially stable
and able to maintain services in vulnerable communities. These services
need to be reimbursed at a level that at least covers the cost of
providing care. There are essential health services that should be
maintained in all communities, whether rural or urban, including
prenatal care, emergency services and transportation to higher acuity
facilities as needed. And take actions that expand scope of practice
Jaws and allow non-physicians to practice at the top of their license
and adequate funding for training programs for nurses and other allied
professionals would help address workforce challenges.
______
Questions Submitted by Hon. Benjamin L. Cardin
telemedicine
Question. Although many may think of Maryland as an urban hub with
its DC suburbs and large cities, there are parts of my State, both on
the Eastern Shore and on the western side of the State, that are either
very rural or medically underserved. My constituents who live in these
parts of the State, must often drive long distances to get the health
care they need. One way to increase access to quality health services
to rural and underserved communities, is by offering treatment through
telehealth technology. Ms. Martin, how do you see the role of
telehealth continuing to grow in health-care delivery, and how can it
be better utilized to increase care for Medicare beneficiaries?
Answer. I believe the role of telehealth will continue to increase
in the healthcare delivery system. Rural communities need expanded
access to broadband. Telehealth services can only be a strong as the
network on which they are delivered. Coverage of service and
reimbursement rates should be improved (e.g., adequate reimbursement
for originating sites and payment parity with in person services). The
high cost of acquiring telehealth equipment can be a barrier for rural
hospitals. Grant programs could assist in these upfront costs for
certain providers.
chronic kidney disease and medigap
Question. For many Medicare beneficiaries living with kidney
failure, particularly those living in rural or underserved areas,
accessing affordable care for their complex and chronic condition is a
constant financial challenge. Over 92,000 dialysis patients live in
States with no access to Medigap. This often leaves them unable to
afford Medicare Part B's 20 percent cost sharing, which for a patient
with kidney failure can often amount to tens of thousands of dollars of
out-of-pocket costs each year. Ms. Martin, have you had challenges with
Medicare beneficiaries who don't have access to Medigap coverage
getting the care they need? For example, Medicare beneficiaries or
patients with ESRD under 65?
Could you speak to the challenges Medicare beneficiaries face when
they don't have access to Medigap plans and the benefits for Medicare
beneficiaries who do have access to Medigap plans?
Answer. I am sorry. I have no experience with Medigap plans and am
unable to answer this.
______
Questions Submitted by Hon. Robert P. Casey, Jr.
Question. In your written testimony, you recommend that increased
support for flexible models for telehealth can help address some of the
challenges facing rural health-care providers. You stated that it would
be helpful to ``remove barriers so that rural facilities may fully
utilize telehealth services.'' Could you discuss specific changes that
could be made to help increase the use and availability oftelehealth
services?
Answer. Currently, Medicare does not reimburse telehealth services
the same as in-person services, nor does it treat all sites of services
the same for providing telehealth services. The professional providing
the service (located at the distant site), is paid under the Medicare
fee schedule; however, the facility where the patient is located
(originating site) is paid a small ``originating'' fee of about $30.
While the Medicare statute does not specify which facilities may serve
as distant site, CMS has excluded rural health clinics and federally
qualified health centers. Reduced reimbursement rates fail to account
for the fixed costs of operating an originating site, as well as
acquisition and maintenance costs for equipment.
There are many examples of services where telehealth could bring
needed specialty care to a rural community. For our organization, we
have one oncologist in our community. When this provider is out of the
office, on vacation, or ill, there is no one to provider consultation
and coverage when cancer patients are receiving infusion or
chemotherapy treatments. The use of telehealth care would allow
patients to continuing their care plans and our community to have 24/7
coverage without that burden being place on a solo provider.
Some options to consider are: (a) in order to increase the use and
availability of telehealth services, Medicare should provide payment
parity and cover all but an excluded list of services; (b) medicare
should expand the types of technology that it allows, including use of
remote patient monitoring; (c) in many rural areas, access to broadband
can also prevent adoption of telehealth services; and (d) another
specific change is allowing specialists in remote sites to provide on-
call, evening and weekend services for a rural specialist. This use of
telehealth services will not only maintain or improve access to certain
specialty care (e.g., oncology; behavioral health), but will help
hospitals recruit and retain providers.
______
Prepared Statement of Keith J. Mueller, Ph.D., Interim Dean, College of
Public Health; Director, RUPRI Center for Rural Health Policy Analysis;
and Gerhard Hartman Professor of Health Management and Policy,
University of Iowa
Chairman Hatch, Ranking Member Wyden, members of the Finance
Committee, thank you for this opportunity to share my perspectives on
key issues in rural health and related policy considerations. While
some things have changed in the 30 years I have been conducting rural
health research and policy analysis, the underlying rural dynamics
remain much the same. But we have some new tools, both in health care
delivery and through public policy, to help us continue our quest to
establish and sustain a high performance rural health system.
We have had an interesting ride in policy debates and developments,
including weathering the aftermath of converting hospital payment to
PPS, considering health reform in the early 1990s, major changes in
Medicare payment and benefits, changes through the Patient Protection
and Affordable Care Act, and now a renewed (and welcome) discussion of
what we should be doing to best serve the needs of rural residents. I
have benefited from exchanges with this committee and others
throughout, starting with a conversation Senator Roberts and I had when
I testified, as part of the RUPRI Health Panel (which I have chaired
for 20 years), to the House Committee on Agriculture in 1993. We
provided analysis of five health reform proposals, including the Health
Security Act by assessing their impacts on key rural considerations.
Senator Roberts may remember sharing his appreciation for the
straightforward analysis, which helped give me the confidence to
continue bringing forward the best we can offer from policy analysis to
help you continue to improve policies. Of course the then
Representative Roberts may not have liked the ``thumbs up, thumbs
down'' table of our conclusions in my local newspaper, displayed during
the hearing.
The RUPRI Health Panel launched in 1992 to bring the rural
dimension front and center in policy discussions. We provided analysis
during development and implementation of major national policies
including the Balanced Budget Act of 1997, the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003, and of course PPACA
in 2010. We provided feedback to this committee and others during
policy formation, and followed up with analysis of potential rural
impacts of new policies, including calling attention to ``unintended
consequences'' of the BBA of 1997 before that term was as ubiquitous as
it is now.
I have come to appreciate the nexus of what we in the research
community contribute to your efforts, and the concerns/needs of our
colleagues delivering health-care services. As President of the
National Rural Health Association in 1996 I represented the interests
of rural providers in policy discussions. One of my funded projects in
the late 1990s was to work with rural providers in Nebraska and Iowa to
develop the template for a provider-sponsored Medicare+Choice plan.
Much of my research involves site visits to rural health care
organizations to understand the implications of Medicare and other
policies on what they are able to do in their communities.
My personal engagement and that of the RUPRI Center, the RUPRI
Health Panel, the Rural Telehealth Research Center (based in Iowa), and
collaborations with others covers a host specific topics of interest to
this committee. They include Medicare Advantage, rural ACOs, access to
rural pharmacy services, rural implications of changes in health care
delivery and organization, delivery system reform initiatives in
Medicare and Medicaid payment, the evolution of the marketplace in
health insurance coverage, and the role of telehealth. My written
testimony includes specific research findings on some of those topics,
along with policy considerations.
I would like to share some important questions to consider for the
future of the Medicare ACO program. Are there benefits other than
savings, related to changes in delivery models, that help achieve the
triple aim of improved patient experience, better health, and lower
costs? Should there continue to be different tracks? Should variations
of advanced payment (perhaps as grants) continue to be available?
Finally, what is the next iteration of payment reform that builds from
the experiences of ACOs--perhaps global budgeting?
I now offer the RUPRI Health Panel's five rural specific
considerations for policies designed to encourage delivery system
reform: (1) organize rural health systems to create integrated care;
(2) build rural system capacity to support integrated care; (3)
facilitate rural participation in value-based payments; (4) align
Medicare payment and performance assessment policies with Medicaid and
commercial payers; and (5) develop rural-appropriate payment systems.
In general, payment policies should be sensitive to the rural
practice environment, including population density, distances to
providers, and need for infrastructure investment. New models can build
on the strengths of the rural system, notably primary care.
Rural health care organizations may need access to investment
capital they are unable to generate on their own as they participate in
new, better ways of organizing services. We should test ideas and
programs specific to rural circumstances, as is underway in
Pennsylvania. Payment policies and alternative sources of financial
support should recognize the importance of access to services in places
wherein patient revenue will not be sufficient to cover all costs.
Thank you for this opportunity, and I look forward to your
questions.
______
Chairman Hatch, Ranking Member Wyden, and other members of the
Finance Committee, thank you for this opportunity to share work of the
Rural Policy Research Institute (RUPRI) Center for Rural Health Policy
Analysis and the RUPRI Health Panel, as well as other published
research and reports. I will focus on three areas of particular
relevance, rural experience with Medicare's accountable care
organizations, or ACOs; payment policies driving changes in delivery
systems; and use of telehealth. I will conclude with general
observations about future directions in rural health policy.
background
While some things have changed in the 30 years I have been
conducting rural health research and policy analysis, the underlying
rural dynamics remain much the same. But we have some new tools, both
in health care delivery and through public policy, to help us continue
our quest to establish and sustain a high performance rural health
system.
I have come to appreciate the nexus of what we in the research
community contribute to your efforts, and the concerns/needs of our
colleagues delivering health care services. As President of the
National Rural Health Association in 1996 I represented the interests
of rural providers in policy discussions. One of my funded projects in
the late 1990s was to work with rural providers in Nebraska and Iowa to
develop the template for a provider-sponsored Medicare+Choice plan.
Much of my research involves site visits to rural health care
organizations to understand the implications of Medicare and other
policies on what they are able to do in their communities.
My personal engagement and that of the RUPRI Center, the RUPRI
Health Panel, the Rural Telehealth Research Center (based in Iowa), and
collaborations with others covers a host specific topics of interest to
this committee. They include Medicare Advantage, rural ACOs, access to
rural pharmacy services, rural implications of changes in health care
delivery and organization, delivery system reform initiatives in
Medicare and Medicaid payment, the evolution of the marketplace in
health insurance coverage, and the role of telehealth.
medicare acos (shared savings plans and demonstrations)
Rural presence in ACO activities has grown dramatically, as of the
end of 2016 in 22 percent of rural counties at least 30 percent of
Medicare beneficiaries were attributed to ACOs. Also by the end of 2016
there were nearly 40 percent of rural (non-metropolitan) counties with
at least 3 ACOs with attributed beneficiaries, up from 17 percent in
2014.\1\ As of the end of 2017 at least one Medicare ACO was operating
in 60 percent of rural counties.\2\ Maps showing the spread of rural
ACOs based on attributed lives for each year 2014-2016, and a map
showing presence of ACOs based on where there are participating
providers, are in an attachment. Factors accounting for the increased
rural participation include:
---------------------------------------------------------------------------
\1\ A. Clinton MacKinney, F. Ullrich, and K. Mueller (2018),
``Medicare Accountable Care Organization Growth in Rural America, 2014-
2016.'' RUPRI Center Data Report Brief No. 2018-1. March, www.public-
health.uiowa.edu/rupri/.
\2\ Document in development; based on RUPRI Center for Rural Health
Policy Analysis data set that plots location of health care providers
included in ACOs.
Demonstration programs making advanced payments available to
invest in information systems and other start-up costs;
National firms supporting multiple ACOs (aggregators that
centralize functions such as data analytics);
Rural health care organizations already engaged in care
management and perhaps even performance based contracting;
Network development among rural health care organizations
(HCOs); and
Spread of urban-based systems into rural regions.
What have we learned from the early adopters of the ACO model in
rural areas? We know that experience matters, both prior experience in
network development and care management, and experience gained as a
result of functioning as an ACO. Approaches to developing ACOs vary
considerably, from a single regional system like the Billings Clinic
and affiliates in Montana, to rural networks like the Illinois Critical
Access Hospital Network, to affiliations of geographically disperse
HCOs under a national organization such as CaravanHealth, to spread of
urban-based ACOs. We also know that there is not a ``typical ACO
model,'' that in rural areas in particular we are seeing different
strategies for building aggregations of HCOs to reach the critical mass
in attributed beneficiaries necessary to generate savings from
affecting the care-seeking behavior of historically high users of
expensive services.
Tables 1-3 display characteristics of 525 Medicare Shared Savings
Plans (MSSP) and Next-Gen ACOs, based on the RUPRI data about where
there are providers participating in those ACOs. We classify ACOs based
on the counties in which they have providers, so ``100 percent
nonmetro'' means that all counties of the ACO with participating
providers are designated nonmetropolitan; ``70%-99%'' is again based on
the percent of all counties in which the ACO has participating
providers. As we should expect, a majority of ACOs are in metropolitan
or mostly metropolitan areas. However, as of 2017 there were 53 ACOs
operating exclusively or mostly in nonmetropolitan counties, and nearly
all of the AIM ACOs, as intended, serve nonmetropolitan counties. Table
3 demonstrates the strong preference of rural-based ACOs for the Track
1 model, but nearly 14 percent of those in the categories of mostly
nonmetropolitan and mixed are participating in Track 3 or Next
Generation ACOs. Table 4 uses these same categories of ACOs on a
nonmetropolitan--metropolitan scale to display other characteristics of
interest. Notably, rural ACOs are more likely to be non-profit and less
likely to be independent hospitals. We have much to learn about the
interaction of ACO development and sustainability of rural health
infrastructure, an ongoing project of the RUPRI Center for Rural Health
Policy Analysis.
Table 1: Medicare ACOs by Metropolitan/Nonmetropolitan County Presence,
Pas of January 2017
------------------------------------------------------------------------
Metro/Nonmetro Description Count Percentage
------------------------------------------------------------------------
Nonmetro 100% nonmetro counties 8 1.5%
------------------------------------------------------------------------
Mostly nonmetro 70%-99% nonmetro counties 45 8.7%
------------------------------------------------------------------------
Mixed 30%-69% nonmetro counties 144 27.7%
------------------------------------------------------------------------
Mostly metro 1%-29% nonmetro counties 112 21.5%
------------------------------------------------------------------------
Metro 0% nonmetro counties 211 40.6%
------------------------------------------------------------------------
Source: RUPRI Center for Rural Health Policy Analysis database on ACO
provider locations.
Table 2: Medicare ACO Participation in AIM, by Metropolitan/
Nonmetropolitan County Presence, as of January 2017
------------------------------------------------------------------------
AIM Participation
Metro/Nonmetro Description -------------------
Count Percentage
------------------------------------------------------------------------
Nonmetro 100% nonmetro counties 6 75.0%
------------------------------------------------------------------------
Mostly nonmetro 70%-99% nonmetro counties 16 35.6%
------------------------------------------------------------------------
Mixed 30%-69% nonmetro counties 16 11.1%
------------------------------------------------------------------------
Mostly metro 1%-29% nonmetro counties 2 1.8%
------------------------------------------------------------------------
Metro 0% nonmetro counties 5 2.4%
------------------------------------------------------------------------
Source: RUPRI Center for Rural Health Policy Analysis database on ACO
provider locations; and CMS ``ACO Investment Model'' data (https://
innovation.cms.gov/initiatives/ACO-Investment-Model/, accessed April
14, 2018).
Table 3: Medicare ACO Model Participation, by Metropolitan/Nonmetropolitan County Presence, as of January 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
Track 1 Track 2 Track 3 Next Gen
Metro/ Description -------------------------------------------------------------------------------------------------------------------
Nonmetro Ct Pct Ct Pct Ct Pct Ct Pct
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nonmetro 100% nonmetro 8 100% 0 0% 0 0% 0 0%
counties
--------------------------------------------------------------------------------------------------------------------------------------------------------
Mostly 70%-99% nonmetro 42 93.3% 0 0% 1 2.2% 2 4.4%
nonmetro counties
--------------------------------------------------------------------------------------------------------------------------------------------------------
Mixed 30%-69% nonmetro 124 86.1% 0 0% 9 6.3% 11 7.6%
counties
--------------------------------------------------------------------------------------------------------------------------------------------------------
Mostly metro 1%-29% nonmetro 95 84.8% 2 1.8% 5 4.5% 10 8.9%
counties
--------------------------------------------------------------------------------------------------------------------------------------------------------
Metro 0% nonmetro counties 172 81.5% 3 1.4% 14 6.6% 22 10.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: RUPRI Center for Rural Health Policy Analysis database on ACO provider locations.
Table 4: Medicare ACO Characteristics
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Nonmetro Mostly nonmetro Mixed Mostly Metro Metropol Total
Characteristic --------------------------------------------------------------------------------------------------------------------------------------------
Ct Pct Ct Pct Ct Pct Ct Pct Ct Pct Ct Pct
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
ACO ``For Profit'' Status
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
For-profit 0 -- 0 0% 18 45.0% 15 32.6% 25 54.3% 58 41.1%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Not-for-profit 0 -- 9 100% 22 55.0% 31 67.4% 21 45.7% 83 58.9%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
ACO Taxonomy type
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Expanded Physician Group 0 -- 5 26.3% 22 25.3% 23 26.1% 30 20.8% 80 23.7%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Full-Spectrum 0 -- 1 5.3% 17 19.5% 15 17.1% 16 11.1% 49 14.5%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Hospital Alliance 0 -- 2 10.5% 11 12.6% 13 14.8% 13 9.0% 39 11.5%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Independent Hospital 0 -- 4 21.1% 8 9.2% 10 11.4% 11 7.6% 33 9.8%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Indep. Physician Group 0 -- 4 21.1% 14 16.1% 15 17.1% 48 33.3% 81 24.0%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Physician Group Alliance 0 -- 3 15.8% 15 17.2% 12 13.6% 26 18.1% 56 16.6%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sponsoring Entity Type
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Hospital system 1 16.7% 14 36.8% 52 44.1% 52 53.1% 59 34.3% 178 41.2%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Physician group 1 16.7% 8 21.1% 38 32.2% 37 37.8% 85 49.4% 169 39.1%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Other 4 66.7% 16 42.1% 28 23.7% 9 9.2% 28 16.3% 85 19.7%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Provider Type
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Hospital system 2 33.3% 7 18.9% 27 22.1% 28 28.3% 31 17.6% 95 21.6%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Physician group 3 50.0% 15 40.5% 50 41.0% 32 32.3% 83 47.2% 183 41.6%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Both 1 16.7% 15 40.5% 45 36.9% 39 39.4% 62 35.2% 162 36.8%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: RUPRI Center for Rural Health Policy Analysis database on ACO provider locations; and Levitt Partners Torch Insight Database (https://torchinsight.com/, 2018).
Metropolitan/Non-Metro categories:
Nonmetro: 100% nonmetro counties
Mostly nonmetro: 70%-99% nonmetro counties
Mixed: 30%-69% nonmetro counties
Mostly metro: 1%-29% nonmetro counties
Metro: 0% nonmetro counties
ACO Taxonomy Type (Leavitt Partners' classification)--A categorization of ACOs based on organizational structure, ownership, and patient care focus:
Expanded Physician Group: ACOs who directly provide outpatient services, but will contract with other providers to offer hospital or subspecialty services.
Full Spectrum Integrated: ACOs who provide all aspects of healthcare to their patients. ACOs in this classification are often dominated by a large integrated delivery network.
Hospital Alliance: ACOs who have multiple owners with at least one of those owners directly providing inpatient services.
Independent Hospital: ACOs who have a single owner and directly provides inpatient services, but do not provide subspecialty care. Outpatient services could also be directly provided by
this type of ACO if the owner is an integrated health system.
Independent Physician Group: ACOs who have a single physician group owner and do not contract with other providers to offer additional services.
Physician Group Alliance: ACOs who may have multiple physician group owners--often including multi-specialty groups--but do not contract with other providers to offer additional services.
Provider Type--The type of provider organizations that are participating in an ACO. Options include: ``Hospital System,'' ``Physician Group,'' and ``Both.'' For the purpose of this field
``Hospital System'' refers to any organization that owns and operates a hospital. The ``Both'' option is appropriate when there is a single organization, such as an integrated delivery
network, that includes both a hospital system and a physician group as well as when there are separate hospital system and physician group organizations participating in the ACO.
There have been two recent ``pushes'' of the ACO model in rural
places. First, the ACO Investment Model (AIM) has provided start-up
capital to qualifying organizations, and the criteria are weighted in
favor of small (by beneficiary count) rural ACOs. Second, regional and
national organizations are providing administrative support, and in
some instances training in care management, to geographically disperse
provider organizations. Several Management Service Organizations serve
at least 15 ACOs, including ones in nonmetropolitan areas:
Aledade (16 total ACOs, 10 nonmetro/mostly nonmetro/mixed).
CaravanHealth (22 total ACOs, 21 nonmetro/mostly nonmetro/
mixed).
Collaborative Health Systems (19 total ACOs, 6 nonmetro/mostly
nonmetro/mixed).
Imperium Health (15 total ACOs, 7 nonmetro/mostly nonmetro/
mixed).
While there is debate regarding the aggregate impact of ACOs on
Medicare spending, our research and that of others find improvements in
the quality measures used in the program. Rural ACOs, for example
perform well (better than urban counterparts) on care management/
patient safety and preventive health domains. Expenditure savings vary;
a 2017 OIG report found net reduction in spending across all ACOs, but
concentrated in less than half of them. Eight of the 11 rural ACOs in
the Advanced Payment Model, an early demonstration prior to the current
AIM demonstration, generated savings. Analysis of 2016 final reports
showed that 56 percent of MSSP ACOs saved Medicare expenditures, with
31 percent receiving share savings bonuses.\3\
---------------------------------------------------------------------------
\3\ R. Saunders, D. Mulestein, and M. McClellan (2017), ``Medicare
Accountable Care Organization Results for 2016: Seeing Improvement,
Transformation Takes Time.'' Health Affairs Blog. November 21. 10.1377/
hblog20171120.211043.
We are at a critical point in time in learning from the experiences
of early entrants into the Medicare ACO program. Some important
questions should be addressed. Is the policy goal solely to
continuously show lower expenditures versus a target influenced by the
ACO's own previous success and the regional market? Are there benefits
to this payment model related to changes in delivery models, including
greater likelihood of achieving the triple aim of improved patient
experience, better health, and lower costs? Should policy continuously
accommodate different cost savings expectations, given variability in
circumstances across all participating ACOs? Should variations of
advanced payment (perhaps as grants) continue to be available? Finally,
what is the next iteration of payment reform that builds from the
experiences of ACOs--perhaps global budgeting?
payment policies and delivery system reform
The ACO program is generating a great deal of attention, but it is
but only one approach to payment reform designed to motivate changes in
the delivery system (delivery system reform or DSR). We should expect
more payment reform initiatives going forward, including implement of
physician payment reform. As we do so the RUPRI Panel encourages
attention to five rural specific considerations:
1. Organize rural health systems to create integrated care.
2. Build rural system capacity to support integrated care.
3. Facilitate rural participation in value-based payments.
4. Align Medicare payment and performance assessment policies with
Medicaid and commercial payers.
5. Develop rural-appropriate payment systems.
In discussing each of those considerations, the Panel provides
specific suggestions in our Policy Paper, which can be downloaded from
the Panel's website: http://www.rupri.org/wp-content/uploads/FORHP-
comments-km-DSR-PANEL-DOCUMENT_PRD_Review_112315.clean-4_sn-3.pdf.
In general, payment policies should be sensitive to the rural
practice environment, including population density, distances to
providers, infrastructure investment including information technology
and data analytics capabilities, and opportunities to develop models
that actually take advantage of smaller scale and integrating all local
services with those provided at some distance. One example of that
sensitivity is to be aware of differences in readiness to change. For
example, our analysis of 2015 data from physician compare shows that
among categories of urban, rural, and ``mixed'' physician practice
locations, rural practices were least likely to report quality measures
(58.5 percent) and use electronic records (17.7 percent). These data
indicate a need for a modified timeline to implement payment reform,
and/or a rationale to provide additional technical assistance and
access to capital.
telehealth
Appropriate use of telehealth, the third area of focus in my
testimony, could facilitate taking full advantage of the strengths of
the rural model, focused on direct patient engagement from a primary
care base. Studies completed by the RUPRI Center (www.ruprihealth.org)
and underway by the National Center for Rural Telehealth Research
(www.ruraltelehealth.org), show that telehealth can be a tool that
reinforces and augments care provided by primary care providers (PCPs)
in rural settings. Access to specialist services included in the
continuum of care initiated by PCPs is enhanced when the specialist is
brought to the rural site through telehealth. Further, virtual office
visits and home monitoring provide the specialist with information
needed to manage chronic conditions.
In our research focused on use of telehealth in hospital facilities
we found that tele-emergency care enhanced local access by having
board-certified emergency doctors available on call. This was
instrumental in recruiting and retaining primary care physicians who
knew they had the support of those board certified physicians who see
many cases of what in a rural setting are infrequent occurrences. We
also found reported improvements in quality of care, greater ability to
focus on patient needs, and improved community support of the local
hospital. Use of telehealth services is expected to increase,
especially given provisions in the Chronic Care Act section of the
Bipartisan Balanced Budget Act. As that happens there are ongoing
policy considerations. First, fee-for-service payment policies need to
be in place allowing payment for services delivered through telehealth.
As payment evolves away from fee-for-service telehealth should be
supported as a means to the achieving the triple aim. Second, support
is needed for ongoing research indicating when telehealth services add
value to health care delivery.
concluding observations
I now offer general observations based on the past several years of
RUPRI Health Panel work in policy analysis and using our framework of a
high performance rural health delivery system. We are in a time of
transformation in health care, both in what is possible in delivery and
how we pay for services. In this time of health care transformation, we
should provide support to rural providers who because of the scale of
their organizations cannot adapt as rapidly as the system may change.
Rural HCOs may need access to investment capital they are unable to
generate on their own as they participate in new, better ways of
organizing services. Many rural HCOs want to participate in delivery
system reform and new payment methodologies, but we should test ideas
and programs specific to rural circumstances, as is underway in
Pennsylvania. Payment policies and alternative sources of financial
support should recognize the importance of access to services in places
wherein patient revenue will not be sufficient to cover all costs.
I offer these observations about how to approach changes to
policies affecting rural health delivery:
We should think in terms of total cost of care, not the prices
of individual services or single encounters.
New approaches to delivering services and payment policies
should be coordinated across payers.
Individual and population health are affected by circumstances
and policies beyond the immediate purview of health policies; that
interaction should be considered in a rural context.
Finally, I offer other resources as the committee considers policy
improvements serving rural America. I realize that much attention
focuses on the closure of rural hospitals and the struggles those
remaining open incur to meet financial needs. Discussions about future
action include thinking through alternative models for rural
communities. Abrupt closure of the local hospital should not be an
option because there will be residents who lose access to essential
services as a result. The RUPRI Health Panel has completed work to
summarize and compare alternative models for rural communities,
accessible from our website: http://www.rupri.org/wp-content/uploads/
Alternatives-for-Developing-the-High-Performance-Rural-Health-System-
FIN....pdf. But the issues facing rural communities are much more
encompassing than the focus on hospitals, and communities fortunate to
have a viable, robust hospital delivery system still confront questions
about how to transform to a value-based system. In addition to our work
on Medicare payment reform, the Health Panel published a document
describing challenges and opportunities for rural health systems in
Medicare payment and delivery system reform: http://www.rupri.org/wp-
content/uploads/RUPRI-Health-Panel-Medicaid-and-Delivery-System-Reform-
June-2016.pdf. Finally, the RUPRI Health Panel is committed to helping
providers and policy makers learn of options that advance us toward a
high performance rural health system. We established a framework for
defining that end objective in documents released in 2011, with a
follow up document in 2014 suggesting a specific strategy: http://
www.rupri.org/wp-content/uploads/2014/11/Advancing-the-Transition-
Health-Panel-Brief.pdf.
More recently, the Health Panel completed a comprehensive
assessment of progress of health system transformation, including
impacts on rural health delivery and outcomes for rural populations. We
included an assessment of remaining gaps and how policies across seven
topical areas could address them. The areas are Medicare, Medicaid and
CHIP, Insurance Coverage and Affordability, Quality, Healthcare Finance
and System Transformation, Workforce, and Population Health. The
document (Taking Stock: Policy Opportunities for Advancing Rural
Health) can be accessed as a single download, or by the chapters just
enumerated: http://www.rupri.org/areas-of-work/health-policy/
#paneldochealth.\4\ The RUPRI Center for Rural Health Policy Analysis,
as referenced earlier in this testimony, publishes research briefs and
papers, as well as scholarly journal articles, on a number of topics.
Those topics include Medicare Advantage, health insurance markets,
rural pharmacies, rural ACOs, and physician payment. The Center's
website is www.
ruprihealth.org.\5\
---------------------------------------------------------------------------
\4\ The work of the RUPRI Health Panel has been supported by the
following sources:
The U.S. Department of Agriculture (special grant to RUPRI from
which Panel support was provided in its early years).
The Federal Office of Rural Health Policy, Health Resources and
Services Administration, U.S. Department of Health and Human Services
(ongoing cooperative agreement).
The Robert Wood Johnson Foundation (work in 2009-2010).
The Agency for Healthcare Research and Quality (1990s).
The Leona M. and Harry B. Helmsley Charitable Trust (current
grant).
The information, conclusions and opinions expressed in this
testimony are those of the author and no endorsement by any of the
funders is intended or should be inferred.
\5\ The work of the RUPRI Center for Rural Health Policy Analysis
has been supported by the following sources:
The Federal Office of Rural Health Policy, Health Resources and
Services Administration, U.S. Department of Health and Human Services
(ongoing cooperative agreement to the Center, funding the project Rural
Health Value, evaluation work).
The Leona M and Harry B. Helmsley Charitable Trust (supporting
evaluation of telehealth).
The Robert Wood Johnson Foundation (work related to health
reform in 2009).
Office of Rural Health, Veterans' Health Administration.
The information, conclusions and opinions expressed in this
testimony are those of the author and no endorsement by any of the
funders is intended or should be inferred.
______
Questions Submitted for the Record to Keith J. Mueller, Ph.D.
Question Submitted by Hon. Orrin G. Hatch
Question. Given your extensive research into rural delivery system
reforms, can you talk in more detail about why rural providers are not
robustly participating in new value based payment models? What specific
legislative changes do you think Congress and the administration should
consider to help rural and frontier communities tailor advanced payment
models that meet their unique circumstances?
meeting requirements for numbers of persons served
Answer. Issue: New payment models that share financial risk, or
that are part of demonstration programs to be evaluated, can require
large minimum populations to assure fiscal viability. Examples include
the ACO program minimum of 5,000 Medicare beneficiaries and the
Accountable Health Communities demonstration minimum of 53,000 Medicaid
enrollees. Rural healthcare organizations would not typically meet
those thresholds, necessitating time to form, or participate in, larger
system arrangements (e.g., national ACOs, regional AHCs). Some rural
providers may assume the requirement cannot be met and not pursue the
payment model.
Resolution: New programs could allow time, either through a
prolonged period to enter a program that has cycle, or through multiple
cycles, for providers to develop the relationships needed to create
aggregations of participating beneficiaries/
enrollees. Another approach would be to allow experimentation with
smaller numbers of participants, adjusting some of the particular
model's parameters accordingly (e.g., calculations of shared financial
risk and reward). This approach, for example, is built into the ACO
program, albeit with the minimum remaining at 5,000 enrollees. New
payment programs could be designed to explicitly allow for new
aggregations of providers to participate, as the case for small
physician practices forming virtual groups in the Merit-based Incentive
Payment System (MIPS).
limited capacity in rural health-care organizations
to change to new payment designs
Issue: Value-based payment models require expensive and
sophisticated retooling of provider infrastructure and operations.
Large urban systems have the resources to do so, and to weather short-
term losses. Rural providers do not have the resources, nor the
financial reserves, to rapidly or dramatically change.
Resolution: One recommendation is to help build rural system
capacity, to build integrated care systems that are responsive to new
payment models. Several specific approaches could be used (first three
are taken from the RUPRI Health Panel November 2015 brief, Medicare
value-based Payment Reform, www.rupri.org/areas-of-work/health-policy/
#paneldochealth):
Provide low-cost capital to rural providers demonstrating
need for such assistance;
Provide technical assistance for transitions to value-based
care;
Support development and implementation of population health
data management platforms and skills; and
Build in up-front payment in long term programs, such as the
ACO Investment Model which attracted rural participants to that
program.
A general approach is for payers, including Medicare, to provide
(internally or through contracted entities) direct assistance in early
phases of implementing new payment designs, as CMS is doing in the
Quality Payment Program. Since the challenges facing small rural
health-care organizations are both financial capacity (funding for
investment and start-up costs) and analytical capacity to adjust to new
reporting requirements and payment formulae, there are opportunities
for modest investments in grants and loans to generate substantial
return through system transformation in rural places. Specifically,
programs in CMS and HRSA could be used to provide direct technical
assistance and support development of tools and strategies rural
providers could use to adopt new payment models.
specifics of payment model design
Issue: Fundamentally payment models need not be different for rural
and urban providers; payment based on value would be seeking the same
results in any practice environment. However, as recognized in the
preceding comments, the starting points for implementing improved
payment systems based on value rather than volume are not the same.
There need to be considerations of rural circumstances in design and
implementation of new systems, including accounting for transitioning
out of payment systems designed for rural circumstances (e.g., cost-
based payment and volume adjustments) and adjusting for patient mix
(including low volume).
Resolution: These considerations are taken from the RUPRI Health
Panel's January 2018 paper, ``Taking Stock: Policy Opportunities for
Advancing Rural Health.''
Payment policies to rural providers under tightly defined
criteria could include adjustments for higher per person or per
episode fixed costs associated with maintaining local access
when patient volumes are not sufficient to generate necessary
revenue streams supporting all fixed costs.
Value-based payment presumes integrated health-care delivery
systems taking full advantage of patient information (including
population health data). Rural providers will need to develop
new capacities to participate in those systems, making rural
investments in broadband and technical workforce development
essential.
Alternative payment delivery models could be tested in rural
communities using demonstration and pilot programs. These could
be based on existing demonstrations, such as AHCs, but modified
to take full advantage of rural community circumstances (e.g.,
primary care-based delivery system, limited number of
community-based service entities) and encourage new
developments (e.g., linking to regional providers).
______
Question Submitted by Hon. Rob Portman
and Hon. Michael F. Bennet
Question. We have previously introduced legislation to encourage
providers to participate in alternative payment models and facilitate
care coordination, including the Medicare PLUS Act (S. 2498 in the
114th Congress) and the Medicare Care Coordination Improvement Act (S.
2051 in the 115th Congress). When we consider coordinating care for
patients in rural settings, what administrative burdens do you face?
What can Congress do to ensure that value-based care is effective in
rural areas?
administrative burdens
Answer. A major burden I hear of often from rural providers is one
of reporting multiple measures to multiple payers to meet requirements
for full payment. The RUPRI Health Panel recommended in its November
2015 Policy Brief ``Medicare Value-Based Payment Reform'' that Medicare
payment and performance assessment policies be aligned with Medicaid
and commercial payers. Initiatives such as the all-payer global budget
demonstrations in Pennsylvania and Maryland are consistent with that
recommendation. Measurement development led by the National Quality
Forum, supported by Federal agencies and commercial payers, is also
helpful. Any further payment reform development, legislative and
regulatory, should maintain the focus on streamlining reporting
requirements across payers. A second burden is that of transaction
costs associated with developing relationships to support coordinated
care. Particularly for small rural provider in cost-based payment
systems, time spent to build new relationships is time not reimbursed.
Either modest investments in the initial set-up costs (through
something similar to the AIM program in the ACO arena) or making them
``allowable costs'' would be helpful.
deploying additional resources
Care coordination requires coordinating professionals, processes,
and relationships. If the professionals to provide care coordination
are not present in a rural area, it is challenging for rural health
systems to hire and develop them de novo. And if the care coordination
professionals are not present, the requisite processes and
relationships to make care coordination successful are not present
either. Therefore, this health-care worker needs to be considered when
developing workforce policies and incentives to create positions and
recruit persons to rural areas. Other investments will also be helpful
to the spread of care coordination in rural settings: new population
health and financial risk management technology and infrastructure, a
primary-care focused health care workforce supported by new
professionals (e.g., community paramedics and community health
workers), EHRs that are designed to be interoperable and serve improved
patient care (and community health), and data provided by all payers
(including CMS) that directly assists providers to improve care and
community health. Public policy can directly accelerate the adoption of
these value-laden inputs.
Questions Submitted by Hon. Ron Wyden
rural workforce
Question. As discussed during the hearing, the shortage of primary
and specialty care providers is a critical issue facing rural
communities across the country. In Oregon, 25.9 percent of residents
live in a health professional shortage area. Difficulty recruiting and
retaining physicians and other members of the care team can result in
longer patient wait times and reduced access to care for those living
in rural communities.
What concrete policy ideas would you suggest this committee pursue
to help attract more providers to rural America?
provider recruitment
Answer. We know from research literature the factors that optimize
the likelihood that healthcare professionals will choose rural
communities as practice sites--their own community roots, training in
rural areas, completing residencies in rural areas, desires based on
culture and lifestyle of both the healthcare professional and
significant other, attraction (or lack thereof) of the practice
environment, and income expectations (intentionally mentioned last).
Given those research findings, the following policy ideas warrant
pursuit (most originate in the RUPRI Health Panel's Taking Stock
document, which includes supporting narrative):
Decentralize training programs into rural environments
through improvements in CMS GME funding.
Target GME funding toward rural health care needs, including
primary care in addition to alignment with other national
health priorities.
Target Federal funding of non-GME training programs to
national health priorities.
(Not from Taking Stock) Support ``pipeline programs'' that
are comprehensive approaches to recruiting rural students into
the health professions (broadly defined) and extend through all
of their training, including rural training tracks and rural
residency training.
(Not from Taking Stock) Support connectivity between rural
practices and regional (urban-based) services through
investments in interoperable health information systems and
telemedicine.
provider retention
Retaining providers that are in rural communities is the other side
of the same coin that included recruiting them. Elements in a
successful retention strategy include:
Payment policies that create comparability across locations.
Payment policies that support non-physicians and patient
support providers, needed in a person-centered health home in
rural communities (from Taking Stock).
Opportunities for rural health-care professionals to
participate in new payment models such as Comprehensive Primary
Care Initiatives (including CPC+ ), MIPs, and advanced
alternative payment models.
rural beneficiary health needs
Question. Rural communities tend to be older, sicker, and lower
income compared to their urban counterparts. When rural hospitals are
forced to close their doors, Medicare beneficiaries living in the
surrounding areas often have limited health care options. The
prevalence of multiple chronic conditions among those living in rural
areas heightens the need to ensure all Medicare beneficiaries have
access to high quality care-regardless of where they live.
In your view, where should this committee focus its efforts to
ensure that Medicare beneficiaries living in rural areas (especially
those with multiple chronic conditions) have access to high quality
care?
What Medicare policy changes would be most impactful in the short
term and long term?
engaging rural health and human services providers
Answer. Many of the improvements in assuring high quality are
linked to changes in payment (value-based payment designs), encouraging
new methods of organizing services (patient-centered medical homes,
accountable health communities), and spreading innovation in clinical
practice and population health (including healthy lifestyle programs).
A critical rural consideration is to be sure that innovations are
designed and implemented in ways that include rural provider and rural
community organization participation. Policy specifics to follow this
principle include:
Instituting evaluation/assessment processes that adjust for
the small volume of rural providers (e.g., statistically
``borrowing'' power by aggregating over time or across
geographies);
Allowing sufficient time for rural providers and
organizations to transition from current practices and payment
models to new ones;
Providing technical assistance to small scale organizations
(provider and cornmunity-based);
Taking steps to incorporate new payment adjustments such as
chronic care management fees into existing payment design, as
has been done for RHCs and FQHCs; and
Changes in payment that both advance quality and generate
savings should be sensitive to rural circumstances (e.g.,
extremely low and sometimes negative margins) that require time
and assistance to mollify.
extending services to rural beneficiaries
Making the highest quality care accessible to rural beneficiaries
means ensuring access to affordable integrated services in total care
plans--subspecialty care coordinated with all needs and special
circumstances. This requires communications flow, including medical
records, and access to consultants, across distance (not the urban
model of a multispecialty group or accessing additional providers in
close proximity). Additionally, rural beneficiaries benefit from
integration across clinical providers and community-based organizations
focused on quality of life for beneficiaries. Specific policy
considerations include (from RUPRI Health Panel documents response from
Keith Mueller, Ph.D. (University of Iowa, RUPRI), page 5, including
Advancing the Transition to a High Performance Rural Health System,
Care Coordination in Rural Communities, and the Taking Stock document
referenced earlier):
Using the leverage of grant and demonstration programs to
facilitate joint governance structures across community-based
organizations and health care organizations, such as models in
Minnesota focused on rewards for addressing total cost of care;
Supporting new technology, including systems that achieve
interoperability of clinical and health records across
organizations;
Providing stable long-term funding supporting locally-
appropriate public health prevention programs; and
Incentivizing integrating preventive and clinical services.
telehealth
Question. Building on the proven success of telehealth in the rural
setting, Congress passed the CHRONIC Care Act earlier this year, which
expanded access to telehealth in Medicare to allow individuals
receiving dialysis services at home to do their monthly check-ins with
their doctors via telehealth, to ensure individuals who may be having a
stroke receive the right treatment at the right time, to allow Medicare
Advantage plans to include additional telehealth services, and to give
certain ACOs more flexibility to provide telehealth services.
In your view, what, if any, Medicare payment barriers to adoption
and utilization of telehealth services remain in the rural setting
today?
Answer. First, when telehealth requires participation of multiple
(usually two) providers, both need to receive payment. A barrier to
that occurring can be a calculation of budget neutrality that does not
account for increased value which would include patient engagement.
Second, When Medicare payment is very low but the administrative burden
to collect is high, we may not see telehealth utilization in the claims
data because providers are opting not to file.
Question. To the extent that barriers remain, what Medicare policy
changes would you suggest the committee consider to address them?
Answer. Rather than policy change, policy makers may consider
research regarding the use of telehealth in global payment and
capitated systems; e.g., CMS's Maryland demonstration and large closed
HMOs. These payment systems obviate the overuse risk in telehealth and
may elucidate appropriate uses.
rural acos
Question. Aligning a fragmented delivery system can be particularly
challenging in rural areas, where there is often a shortage of health
care professionals, limited financial capital available, and a patient
population composed of older and sicker patients. Although several
rural Accountable Care Organizations (ACOs) have records of success,
many rural providers still find the prospect of joining an ACO
daunting. Creating opportunities for rural providers to participate in
value-based payment models, such as ACOs, is critical to transitioning
to a health care system that rewards value instead of simply volume of
services provided.
What characteristics have allowed some rural ACOs to succeed?
Are there certain ``lessons learned'' from these success stories
that may be helpful to rural providers interested in participating in a
rural ACO?
characteristics of successful rural acos
Answer. The RUPRI Center for Rural Health Policy Analysis has been
studying the creation and operations of rural Medicare ACOs since the
program began. Much of the historical information about the presence of
ACOs in rural places was in my written testimony. Rural experiences are
variations on the themes emerging from studies of all Medicare ACOs
(which tend to have an urban bias because of the disproportionate
presence in urban areas, at least until the AIM program and national
aggregators helped boost rural participation in recent years). Our
current study of high performing rural ACOs (defined using quality
scores and shared savings results) is finding these seven
characteristics to be important:
Prior experience with multi-organizational collaborations;
especially important for rural ACOs with independent hospital
and physician practice participation;
Prior experience with the specific organizations in the ACO;
Strategic managerial and clinical leadership;
Shared governance structure; providers from multiple sites
on the governing board;
Engagement in care coordination for targeted patients (based
on diagnosis);
Improvement in continuum of care, including adding non-acute
services and partnering with local social service agencies and
pharmacies; and
Use of advanced analytics and access to the requisite data.
lessons learned and implications for aco action and public policy
For rural providers considering participating in ACOs, they should
map out a strategic plan/approach that generates the characteristics
listed above, either by drawing on their own history or by setting a
long enough time line to develop them. They can consider affiliations
with other providers, either within a rural region (such as the
aggregation of Critical Access Hospitals in an Illinois ACO), with a
regional system (such as UnityPoint in the Midwest), or working with a
national aggregator such as Caravan Health. All are examples of
achieving the scale needed to support some of the factors of success,
particularly data collection and analytics, care coordination scaled to
achieve savings, and managing care across the entire continuum to
improve quality and lower total expenditures. General considerations
for the Medicare Shared Savings Program include:
Thus far, only about 25% of ACOs have received shared
savings. And the cost to establish and ACO is significant.
Thus, a rural provider requires financial reserves and
progressive leadership to establish an ACO. At least for now,
the purpose of forming or joining an ACO is not to realize
profit, but to obtain data for more informed managerial
decisions and gain experience in population health and
financial risk management.
The CMMI AIM program has been successful in expanding the
program. Developing the ``next AIM program'' might encourage
additional rural provider participation in ACOs.
ACOs should be considered an iterative step toward value-
based payment (ACOs are still built on a fee-for-service
platform). ACOs are ``training wheels'' for bundled payment,
primary car capitation, global payment, or other systems not
yet designed.
transition from volume to value
Question. The passage of the bipartisan Medicare Access and CHIP
Reauthorization Act of 2015 (MACRA) was a milestone in Congress's
efforts to repeal the flawed SOR and move our health-care system from
one that rewards volume to one that rewards value. In many cases,
however, rural providers report that participating in value-based
payment models is a significant challenge for them, particularly when
it comes to taking on financial risk for patient health outcomes and
population health. In order to successfully transition our health care
system to one that rewards value, it is critical to ensure there are
meaningful opportunities for rural providers to participate in a value-
based payment system.
What barriers exist today that discourage rural providers from
participating in value-based payment models?
What, if any, Medicare policy changes would help ensure that rural
providers and communities are not left behind in the transition to
value-based payment?
barriers
Answer. While there are hurdles to participate in several of the
models being tested, at least some rural providers are engaged in
nearly all of them. The Rural Health Value project provides a catalog
of the programs that includes, for each of them, identification of
rural participation, Catalog of Vallue-Based Initiatives for Rural
Providers. General hurdles facing rural providers are described as
follows:
Except for ACOs, demonstrations readily appropriate for
rural providers have been limited. Understandably, researchers
desire high volumes to test change. But more creativity is
needed to consolidate demonstration data so multiple rural
provider systems can participate in demonstrations and gain
experience in value-based payment models.
Locally, rural providers are discouraged from participating
in value-based payment models because limited operating margins
and reserves cannot allow financial risk; that is, the cost of
infrastructure development and operational change and the risk
of revenue loss in a new model. Large health systems have the
infrastructure and resources to affect change and tolerate
short-term losses. Not so with many rural providers, as
manifest by recent rural hospital closures.
More specifically, the hurdles are illustrated by the challenges
facing physicians wanting to participate in the Merit-Based Incentive
Payment System (MIPS). They must first understand intricacies of a
highly complex system. Since most cannot hope to do so on their own,
they either incur an additional expense for outside consultants, or
take the time to work with one of the CMS regional technical assistance
providers. Second they will need to be sure their reporting
systemscreate the data required to calculate payment. Third, they will
want to incorporate appropriate changes in their practices, yet another
investment of time (which is time lost to reimbursable services) and
perhaps direct cost.
policy changes
I start this response with a recognition that CMS has taken an
important step to improve rural participation in developing and
publishing its Rural Health Strategy that includes five objectives:
``(1) apply a rural lens to CMS programs and policies; (2) improve
access to care through provider engagement and support; (3) advance
telehealth and telemedicine; (4) empower patients in rural communities
to make decisions about their health care; and (5) leverage
partnerships to achieve the goals of the DCMS Rural Health Strategy''
(http://go.cms.gov/ruralhealth). Providing ruralspecific technical
assistance in programs such as CPC+ and MIPS are actions underway that
will be helpful. There are also specific actions that would be helpful:
Rural-specific value-based payment demonstrations;
Extended transition from volume-based to value-based
payment;
Finite transition to allow proper future planning;
Rural-appropriate performance measures;
Revamped medical education system that prioritizes primary
care; and
Mandatory EHR compatibility.
______
Question Submitted by Hon. Debbie Stabenow
and Hon. Benjamin L. Cardin
dental care
Question. Lack of oral health care is a significant public health
problem in the United States. Significant health professional shortages
and lack of access to dentistry impacts rural and underserved
communities disproportionately. We know that our seniors are negatively
impacted by the lack of a dental benefit in Medicare. We also know that
children, families and people with disabilities who rely on Medicaid
and CHIP, programs which offer coverage for pediatric dental care and
sometimes care for adults, often struggle to find providers to see
them. Nowhere is the need for comprehensive dental coverage and access
to providers more profound than in our rural and underserved
communities. We have an opportunity to address the needs of our rural
and underserved communities by improving our health care system by
incorporating dental care more holistically through better coverage in
Medicare, Medicaid and CHIP, utilizing telemedicine, and assessing
provider and workforce gaps that can and should be filled in these
communities. Dr. Mueller, what is the most important thing that we, as
the Senate Finance Committee, can do to improve dental care and
coverage for people living in rural and underserved communities?
Answer. Given the preponderance of Medicare coverage through the
traditional program in rural (as compared to higher MA enrollment in
urban areas), include routine dental care as a traditional Medicare
benefit. For beneficiaries receiving dental coverage as a result of
dual eligibility, assuring that benefit continues unless until this is
a traditional Medicare benefit is an important policy consideration.
______
Question Submitted by Hon. Debbie Stabenow
maternity coverage
Question. We've heard from families and health-care providers in
Michigan who are concerned about access to maternity coverage in rural
areas. Close to 500,000 women give birth each year in rural hospitals
and often face additional barriers and complications. For example,
women in rural areas report higher rates of obesity, deaths from heart
disease, and child-birth related hemorrhages. In addition, more than
half of women in rural areas must travel at least half an hour to
receive obstetric care, which can lead to decreased screening and an
increase in birth-related incidents.
Since 2004, a large number of rural obstetric units have closed,
and only increased the distances that mothers must travel in order to
receive maternity and delivery care. Unfortunately, the percent of
rural counties in the United States without hospital obstetric units
increased by about 50% during the past decade.
Do you have experience with loss of obstetric care for women within
your respective fields?
What steps should be taken to ensure that the proper range of
maternal care services are being offered through innovative rural
health models?
Answer. I do not have direct experience with loss of obstetric
care, given my role as a health policy analyst in a College of Public
Health. Colleagues at the University of Minnesota Rural Health Research
Center have completed and published a national study of access to
hospital-based obstetric services that is gloomy at best (see their
article in the Journal of the American Medical Association: https://
iamanetwork.com/journals/jama/fullarticle/2674780). They followed that
with an op-ed column in the Washington Post (https://
www.washingtonpost.com/opinions/rural-americas-disappearing-maternity-
care/2017/11/08/11a664d6-97e6-11e7-b569-
3360011663b4_story.html?utm_term=.003094e99c6f) that offered these
policy suggestions:
Designate maternity-care shortage areas; and
Expand workforce programs to include maternity services.
______
Question Submitted by Hon. Benjamin L. Cardin
dental care
Question. In your work you encourage the integration of the
delivery system to better focus on preventing and managing chronic
conditions. This approach requires us to effectively utilize midlevel
providers, like physician assistants and nurse practitioners. As I'm
sure you know, there is substantial evidence showing that oral health
is a critical component of overall health-and poor oral health can have
significant health consequences and lead to chronic conditions. There
has been some movement around the county to integrate oral and medical
health care to improve health outcomes. How would midlevel health and
dental providers be most effectively used in an integrated delivery
system?
Answer. General response: As in medical care, dental care is best
provided by a team of professionals, each operating at the ``top'' of
his or her license, training, and experience--all interdependent, not
independent. Government payers should pay dental providers at
appropriate rates, but should consider expanding the role of midlevel
dental providers to care for routine prevention (e.g., exam, cleaning,
and varnish) and treatment (fillings and uncomplicated extractions).
Dental care proximate to primary care (as in many FQHCs) serves
patients well.
Specific cases: I recommend two documents that contain data
regarding integrating mid-level dental practitioners in health teams.
One is from the Kaiser Family Foundation and includes definitions of
mid-level providers and case studies of their contributions: https://
www.wkkf.org/-/media/pdfs/dental-therapy/mid-level-dental-
providers.pdf?. The other is an early evaluation (2014) of the
Minnesota legislation creating a new classification, dental therapist,
which found improved access to dental services for rural residents:
http://www.health.state.mn.us/divs/orhpc/workforce/dt/dtlegisrpt.pdf.
______
Prepared Statement of Karen M. Murphy, Ph.D., R.N., Chief Innovation
Officer and Founding Director, Glenn Steele Institute of Health
Innovation, Geisinger
Chairman Hatch, Ranking Member Wyden, and members of the committee,
thank you for inviting me to testify today about rural hospitals. To
provide context for my perspective, I would like to share my
background. I started my career as a registered nurse in a community
hospital in northeastern Pennsylvania. I held various positions at the
hospital, ultimately serving as the president and chief executive
officer. Following my time at the hospital I spent 2 years at the
Center for Medicare and Medicaid Innovation where I led the State
Innovation Models Initiative. I then served for 2\1/2\ years in
Governor Tom Wolf's cabinet as Secretary of Health. In 2017, I joined
Geisinger as chief innovation officer and founding director of the
Steele Institute for Health Innovation. It was during my time with the
State that I led the Pennsylvania Rural Health Initiative. Today, I'd
like to share the development and evolution of this innovative payment
and delivery model for rural hospitals.
I began my tenure as Secretary of Health assessing the status of
the health care delivery systems in Pennsylvania. I was struck by the
financial instability of the rural hospitals. An overwhelming majority
of the 67 rural hospitals were not in a position to weather any
financial challenge and had not invested in their facilities for many
years. I found from my research that rural hospitals in other states
faced the same challenges at those in Pennsylvania.
Today, rural hospitals provide essential health care services for
57 million people across the country, but achieving financial stability
is difficult for most hospitals.\1\ The reasons for the instability are
multifaceted. Nationally, the number of inpatient admissions is
declining, a trend that is also prevalent in rural hospitals. Rural
hospitals also lack the financial and human resources to offer complex,
highly specialized inpatient care that is required for most admissions
today. In addition, reimbursement for rural hospitals remains
predominantly fee for service, with public payers contributing a
sizable percentage of the hospitals' revenue. The combination of
declining inpatient admissions, resulting in decreased reimbursement,
and a payer mix that yields a lower price per service has greatly
contributed to the current crisis in rural hospitals.
---------------------------------------------------------------------------
\1\ Gugliotta G. ``Rural hospitals, beset by financial problems
struggle to survive.'' Washington Post. https://www.washingtonpost.com/
national/health-science/rural-hospitals-beset-by-financial-problems-
struggle-to-survive/2015/03/15/d81af3ac-c9b2-11e4-b2a1-
bed1aaea2816_story
.html. Published March 15, 2015.
The most recent statistics indicate that over the past 7 years, 83
of 2,244 rural hospitals in the United States have closed.\2\ One
analysis suggests that without intervention, an estimated 673 rural
hospitals in the United States may also close over the next 5 years.\3\
Individuals residing in rural communities tend to have poorer health
outcomes compared with residents of urban areas. For example, opioid
overdose deaths and the incidence of obesity, cancer, and
cardiovascular disease are also more predominant in rural
communities.\4\
---------------------------------------------------------------------------
\2\ The Cecil G. Sheps Center for Health Services Research,
University of North Carolina at Chapel Hill. ``83 Rural hospital
closures: January 2010-present.'' http://www.
shepscenter.unc.edu/programs-projects/rural-health/rural-hospital-
closures.
\3\ ``More than 200 rural hospitals are close to closure, iVantage
study claims.'' Healthcare Finance. http://
www.healthcarefinancenews.com/news/more-200-rural-hospitals-are-close-
closure-ivantage-study-claims. Published February 16, 2016. Accessed
December 16, 2017.
\4\ Garcia M, Faul M, Massetti G, et al. ``Reducing potentially
excess deaths from the five leading causes of death in the rural United
States.'' MMWR Surveillance Summ. 2017;66(2):1-7.
Historically, Federal and State governments have made unsuccessful
attempts to stabilize rural hospitals by providing additional payments.
Because the subsidies were largely based on fee-for-service and
---------------------------------------------------------------------------
inpatient admissions, they provided little benefit.
After having worked on the Maryland All-Payer Model while at CMMI
and seeing the impressive results, we decided to design a similar model
for rural hospitals in Pennsylvania.
Pennsylvania has the third largest rural population in the United
States,\5\ and 67 of 169 hospitals are in rural communities. More than
58 percent of the hospitals have mounting financial pressures resulting
in break even or negative operating margins.\6\
---------------------------------------------------------------------------
\5\ U.S. Census Bureau. 2010 Census urban and rural classification
and urban area criteria. https://www.census.gov/geo/reference/ua/urban-
rural-2010.html.
\6\ Pennsylvania Health Care Cost Containment Council. ``Financial
analysis 2016: general acute care hospitals: an annual report on the
financial health of Pennsylvania hospitals.'' http://www.phc4.org/
reports/fin/16/docs/fin2016report_volumeone.pdf. Published April 2017.
We worked collaboratively with CMMI on designing the model. The
design period was launched in January of 2017. The objectives of the
model are to provide a path to improving health and health care
delivery in rural communities. Rural health transformation promotes
transition to higher quality, integrated, and value-based care. The
model changes the way participating hospitals will be reimbursed by
replacing the current fee-for-service system with a multi-payer global
budget based on hospitals' historic net revenue. Like Maryland, the
payment model in Pennsylvania is designed to include Medicare,
Medicaid, and commercial payers. However, it was necessary to develop a
new methodology since Maryland has the authority to establish hospital
---------------------------------------------------------------------------
rates. Pennsylvania does not.
The model moves rural hospitals from focusing on inpatient-centric
reactive health-care services to a greater focus on outpatient-centric
health-care services, with an emphasis on population health and care
management. It replaces the current fee-for-service system with little
emphasis on quality and safety to a payment model that includes direct
incentives to improve quality and safety and eliminate sub-scale
service lines.
Rural hospitals are encouraged to move from traditional care
delivery model rendered directly by onsite health care providers to
innovative care delivery models enabled by technologies such as tele-
health, video conferencing, remote monitoring, and diagnostic scanning.
The vision is that rural hospitals will invest in care coordination
such as reaching out to patients who frequently use emergency services
and connecting them with a primary care provider or guiding patients
after hospital discharge to make sure they follow up with a physician.
It also includes population health and preventative care services such
as chronic disease prevention programs and behavioral health
initiatives, including those targeting drug abuse and addiction, and
the expansion of medical health homes to include medication-assisted
treatment programs. Participating hospitals will have the ability to
invest in social services that address community issues that lead to
detrimental health outcomes--such as parenting classes and connections
to social services for eligible benefits such as WIC. The model will be
evaluated measuring improvements of health status and health care
delivery in the participating rural communities.
Based on the global budget, participating hospitals are expected to
develop a transformation plan that could outline an innovative approach
to improving health and health care delivery. The hospitals are
encouraged to work with community agencies, including United Way, Area
Agencies on Aging, and drug and alcohol treatment centers, to develop
services based on their communities' needs. To provide participating
hospitals with transformation support, Pennsylvania plans to create a
Rural Health Redesign Center (RHRC). CMS has entered a cooperative
agreement to provide Pennsylvania up to $25 million over 5 years to
support the RHRC. The RHRC will provide a way to deploy capabilities to
support all participating hospitals.
Pennsylvania is planning to engage six hospitals in the initial
performance year, gradually expanding participation to include 30 rural
hospitals across the State by the third performance year. At Geisinger,
we are a participant in the initial phase. Dr. David Feinberg,
Geisinger CEO, has been a staunch supporter of the initiative since its
inception. The model builds on Geisinger's vision for building a health
care delivery system that focuses on improving health and value
creation for each community we serve. We are looking forward to working
with the State on this important initiative.
The financial challenges of rural hospitals today are the result of
a changing health care industry. Even though rural hospitals may not
offer the same services as they did in the past, it is possible that
they can be leveraged to improve the health of those residing in rural
communities. This model, if it achieves better quality and lower costs,
could potentially be scaled as a model for the Nation for rural health-
care delivery.
Next week, I will be speaking at a Global Budgeting Summit at Johns
Hopkins University. Twenty States have registered to participate. The
Federal Government has the opportunity to engage additional States in
the Pennsylvania Rural Health Model. Implementing the model across
diverse States gives the opportunity for it to evolve. Adding
additional resources to the Rural Health Redesign Center would bring
efficiency and an ability to disseminate best practices in rural health
transformation across the United States.
Thank you for your interest in aiding rural hospitals. Rural
communities deserve access to health care. We must continue to identify
innovative approaches that offer a pathway to that goal.
______
Chairman Hatch, Ranking member Wyden, and members of the committee,
thank you for inviting me to testify today about rural hospitals. To
provide context for my perspective, I would like to share my
background. I started my career as a registered nurse in the Intensive
Care Unit in a community hospital in northeastern Pennsylvania. I held
various positions at the hospital, ultimately serving as the president
and chief executive officer. Following my time at the hospital I spent
2 years at the Center for Medicare and Medicaid Innovation (CMMI) where
I led the State Innovation Models Initiative. I then served for 2\1/2\
years in Governor Tom Wolf's cabinet as Secretary of Health, before
joining Geisinger as chief innovation officer and founding director of
the Steele Institute for Health Innovation. It was during my time with
the State that I led the Pennsylvania Rural Health Initiative. Today,
I'd like to share the development and evolution of this innovative
payment and delivery model for rural hospitals.
As a cabinet member, I recognized that I had limited time in my
role and wanted to be impactful. I began my tenure assessing the status
of the health care delivery systems in Pennsylvania. I learned that,
for the most part, hospitals in Philadelphia and Pittsburgh were doing
well and did not need my help. However, I was struck by the financial
instability of the vast majority of 67 rural hospitals. Their number of
days cash-on-hand was very low, and their facilities' age-of-plant was
well above benchmarks. This meant that the hospitals had little ability
to weather any financial challenge and had not adequately invested in
facilities for many years.
As I began to research rural hospitals in other states, I found
that the challenges faced by rural hospitals across the country
mirrored those in Pennsylvania.
Today, rural hospitals provide essential health care services for
57 million people across the country. However, the ability to achieve
financial stability is difficult for most hospitals.\1\ The reasons for
the instability are multifaceted. Nationally, inpatient admissions are
declining, a trend that is also prevalent in rural hospitals. Rural
hospitals also lack the financial and human resources to offer complex,
highly specialized inpatient care required for most admissions today.
In addition, reimbursement for rural hospitals remains predominantly
fee-for-service, with public payers contributing a sizable percentage
of the hospitals' revenue. The combination of declining inpatient
admissions resulting in decreased reimbursement and a payer mix that
yields a lower price per service has been a large contributor to the
current crisis in rural hospitals.
---------------------------------------------------------------------------
\1\ Gugliotta G. ``Rural hospitals, beset by financial problems
struggle to survive.'' Washington Post. https://www.washingtonpost.com/
national/health-science/rural-hospitals-beset-by-financial-problems-
struggle-to-survive/2015/03/15/d81af3ac-c9b2-11e4-b2a1-
bed1aaea2816_story.
html. Published March 15, 2015.
Over the past 7 years, 83 of 2,244 rural hospitals in the United
States have closed.\2\ One analysis suggests that without intervention,
an estimated 673 rural hospitals in the United States may also close
over the next 5 years.\3\ Preserving health care in rural communities
is imperative people living in rural communities tend to have poorer
health outcomes compared with residents of urban areas. For example,
opioid overdose deaths and the incidence of obesity, cancer, and
cardiovascular disease are also more predominant in rural
communities.\4\ Given the financial pressure under their current fee-
for-service reimbursement structure, rural hospitals are frequently
unable to address the health of their communities. Economic instability
is also more prevalent in rural communities. Poverty rates are higher.
Hospitals are frequently the largest employer affecting the entire
economy in the rural community.
---------------------------------------------------------------------------
\2\ The Cecil G. Sheps Center for Health Services Research,
University of North Carolina at Chapel Hill. ``83 Rural hospital
closures: January 2010-present.'' http://www.
shepscenter.unc.edu/programs-projects/rural-health/rural-hospital-
closures.
\3\ ``More than 200 rural hospitals are close to closure, iVantage
study claims.'' Healthcare Finance. http://
www.healthcarefinancenews.com/news/more-200-rural-hospitals-are-close-
closure-ivantage-study-claims. Published February 16, 2016. Accessed
December 16, 2017.
\4\ Garcia M, Faul M, Massetti G, et al., ``Reducing potentially
excess deaths from the five leading causes of death in the rural United
States.'' MMWR Surveillance Summ. 2017;66(2):1-7.
While at CMMI I had the opportunity to work on the Maryland All-
Payer Model. With this model, hospitals are reimbursed by a global
budget based. The hospitals are accountable for the total cost and
quality of care. Maryland began global budgeting for rural hospitals in
2010 with great success. Maryland extended the model to include all
hospitals in January 2014 and has yielded positive results over the
past 4 years. That provided the foundation of the Pennsylvania Rural
---------------------------------------------------------------------------
Health Initiative.
Pennsylvania has the third largest rural population in the United
States,\5\ and 67 of 169 hospitals are in rural communities. More than
58 percent of the hospitals have mounting financial pressures resulting
in break even or negative operating margins.\6\ Pennsylvania recognized
the health and socioeconomic imperative involving rural communities. We
estimated that over 27,000 people were employed by rural hospitals.
---------------------------------------------------------------------------
\5\ U.S. Census Bureau. 2010 Census urban and rural classification
and urban area criteria. https://www.census.gov/geo/reference/ua/urban-
rural-2010.html.
\6\ Pennsylvania Health Care Cost Containment Council. ``Financial
analysis 2016: general acute care hospitals: an annual report on the
financial health of Pennsylvania hospitals.'' http://www.phc4.org/
reports/fin/16/docs/fin2016report_volumeone.pdf. Published April 2017.
We began the work on the Pennsylvania initiative in the spring of
2015 and presented the initial concept to CMMI in the fall of 2015. We
worked collaboratively with CMMI on refining the model. The design
period was launched in January of 2017. The objectives of the model are
to provide a path to improving health and health care delivery in rural
communities. The model changes the way participating hospitals will be
reimbursed by replacing the current fee-for-service system with a
multi-payer global budget based on hospitals' historic net revenue.
Like Maryland, the payment model in Pennsylvania is designed to include
Medicare, Medicaid, and commercial payers. However, it was necessary to
develop a new methodology since Maryland has the authority to establish
---------------------------------------------------------------------------
hospital rates. Pennsylvania does not.
The model provides that the hospital budget will be prospectively
calculated, and each month the hospital will be paid \1/12\ of the
total budget amount. This approach is expected to provide rural
hospitals with a predictable revenue stream. Most importantly, it could
support the transformation of delivering health care services. The
global budget is intended to incentivize rural hospitals to retain the
established revenue base, regardless of hospital use. To achieve this,
payers are expected to invest in the health of the population residing
in rural communities. Annual adjustments are planned to account for
changes in market share for the commercial payers.
Based on the global budget, participating hospitals are expected to
develop a transformation plan that could outline an innovative approach
to improving health and health-care delivery. The hospitals are
encouraged to work with community agencies, including United Way, Area
Agencies on Aging, and drug and alcohol treatment centers, to develop
services based on the communities' needs. Hospitals may choose to
reconfigure or eliminate substandard or underused inpatient service
lines and invest in community-facing interventions. Expanded care
coordination, growth in behavioral health services with an emphasis on
the opioid crisis, and increased access to preventive services, such as
colonoscopy and mammography, are examples of strategies that rural
hospitals can execute to improve community health.
To support participating hospitals' transformation, Pennsylvania
plans to create a Rural Health Redesign Center (RHRC). CMS has entered
a cooperative agreement to provide Pennsylvania up to $25 million over
5 years to support the RHRC. The RHRC will provide a way to deploy
scaled capabilities to support all participating hospitals. The RHRC
will perform the following key functions throughout the performance
period of the model:
Model Oversight: Provide oversight, approve Global Budgets
and transformation plans. Advise on and approve changes to
operational and payment mechanisms, and approve reasonable
exceptions to agreed-upon payment algorithms and rules through
an approved procedure.
Global Budget Administration: Run algorithms for the defined
payment model logic to determine Global Budget amounts,
adjustments, and payer proportions.
Data Analytics: Analyze and report to support model-specific
goals. Provide stakeholders with regular reports to inform
decision-making. Securely collect and store data from payers
and providers. Clean data for performance reporting and budget
calculation.
Technical Assistance: Provide strategic and operational
technical assistance to support care delivery transformation.
Convene hospitals to share best practices. Change management.
Quality Assurance: Provide an annual assessment of
compliance with transformation plan and Global Budget targets.
Recommend corrective action plans where needed. Contract with
an independent outcome evaluation group to provide board and
CEO with rigorous evaluation of model's progress against
population health, quality of care, and cost targets. Engage
stakeholders through an advisory panel for input on program
policy and outcomes.
In addition, Pennsylvania has established savings goals for
Medicare. Over the next 5 years, participating rural hospitals are
expected to implement strategies that could save an estimated minimum
of $35 million to Medicare over the life of the model. The plan
stipulates that in the first 2 years, rural hospitals retain 100
percent of the realized savings. In the third year, the hospitals will
retain 75 percent of the savings. In subsequent years, the payers and
hospitals are expected to share an equal portion of the savings.
Pennsylvania has also agreed to demonstrate improvement in access to
health services, quality of care, and population health outcomes.
Pennsylvania is planning to engage six hospitals in the initial
performance year, gradually expanding participation to include 30 rural
hospitals across the State by the third performance year.
However, this initiative has clear challenges. While Maryland has
experienced success using global budgets, as previously pointed out, a
notable distinction is that Maryland is using its regulatory authority
to establish inpatient hospital rates for all payers. Demonstrating
success using multi-payer global payments in a non-rate setting State
will be tested in the Pennsylvania model. In addition, the size of the
State and the large number of commercial and Medicaid-managed care
organizations will pose challenges. Also, the goal of the program is to
stabilize the financial status of rural hospitals but at the same time
reduce the cost to payers. Reconciling these two goals will be a
challenge.
The lessons learned in developing this model could assist other
states in this journey. The model requires strong support from the
governor, State and Federal legislators. In Pennsylvania, Governor Wolf
was engaged early in the process and identified the model as one of his
priorities. In Pennsylvania, the model engaged several State agencies
in addition to the Department of Health. The Department of Agriculture,
Department of Human Services and the Insurance Department all
contributed to the work. The support of the Governor was critical in
achieving an effective collaboration across State agencies.
States may require enabling legislation to execute the model. In
Pennsylvania, State legislators were briefed early in the development
of the model. The Department also engaged Senator Casey's office and
the U.S. Secretary of Agriculture, Tom Vilsak, throughout the design of
the initiative.
This model is complex, requiring sophisticated data analytics and
technical assistance. State agencies ordinarily do not have those
internal resources or capabilities, and will require consultants with
expertise in payment models and health-care transformation to support
the work.
Pennsylvania also worked with experts in Maryland in the design.
The former Secretary of Health, Dr. Josh Sharfstein, and the Executive
Director of the HRSC in Maryland, Donna Kinzer, were tremendous
resources to Pennsylvania. Maryland's vast experience can be helpful in
other states in designing global budgets.
The Pennsylvania Hospital Association was extremely helpful in
supporting the model. They assisted the State in engaging hospital CEOs
early in the process and throughout the design process. States will be
required to collaborate with their State hospital association.
Engage rural hospitals early in the process is also essential. This
model requires that each participating hospital have a CEO and Board of
Directors with a vision and commitment for transformation. Hospitals
need adequate time to develop effective transformation plans. The
transition from fee-for-service reimbursement to a global budget
requires a completely new paradigm moving from volume to value.
At Geisinger, we are a participant in the initial six hospitals.
Dr. David Feinberg, Geisinger CEO, has been a staunch supporter of the
initiative since its inception. The model builds on Geisinger's vision
for building a health-care delivery system that focuses on improving
health and value creation for each community we serve. We are looking
forward to working with the State on this important initiative.
CMS and Pennsylvania have demonstrated a strong interest in
stabilizing health care in rural communities. Previous attempts to
stabilize rural hospital by Federal and State governments providing
additional payments have been unsuccessful. These subsidies were
largely based on fee-for-service and inpatient admissions, and
therefore, provided little benefit.
The financial challenges of rural hospitals today are the result of
a changing health care industry. Even though rural hospitals may not
offer the same services as the past, it is possible they can be
leveraged to improve the health of those residing in rural communities.
This model, if it achieves better quality and lower costs, could
potentially be scaled as a model for the Nation for rural health-care
delivery.
Next week, I will be speaking at a Global Budgeting Summit at Johns
Hopkins University. Twenty States have registered to participate. The
Federal Government has the opportunity to engage additional States in
the Pennsylvania Rural Health Model. Implementing the test across
diverse States gives the opportunity for the model to evolve.
Additional resources to the Rural Health Redesign Center would bring
efficiency and an ability to disseminate best practices in rural health
transformation across the United States.
Thank you for your interest in aiding rural hospitals. Rural
communities deserve access to health care. We must continue to identify
innovative approaches that offer a pathway to that goal.
______
Questions Submitted for the Record to Karen M. Murphy, Ph.D., R.N.
Questions Submitted by Hon. Orrin G. Hatch
Question. During the hearing I asked you if there is any concern,
under Pennsylvania's new multi-payer global budget model, that rural
hospitals might lose incentives to be efficient in providing health
care services. Specifically, I asked if you think participating rural
hospitals will figure out ways to lower costs and improve health
outcomes if they already know what they will get paid for procedures
under the global budget. You responded that this behavioral assumption
has been accounted for as a monitoring component within the model's
methodology. Additionally, you mentioned a transformational plan that
is in place to monitor metrics on a number of the model's assumptions
and impacts. Can you tell me a little bit more about the
transformational plan that you mentioned? What is it, how does it work,
and how will CMS, State officials, participating hospitals and
providers use it to analyze data and make adjustments as the model is
implemented?
Answer. Rural hospitals are expected to develop a transformation
plan that outlines an innovative approach to improving health and
health care delivery. The hospitals will be encouraged to work with
community agencies to develop services based on the communities needs.
Hospitals may choose to reconfigure or eliminate substandard or
underused inpatient service lines and invest in community-facing
interventions. Expanded care coordination, growth in behavioral health
services with an emphasis on the opioid crisis, and increased access to
preventive services, such as colonoscopy and mammography, are examples
of strategies that rural hospitals can execute to improve community
health.
To provide participating hospitals with transformation support,
Pennsylvania plans to create a Rural Health Redesign Center (RHRC). CMS
has entered a cooperative agreement to provide Pennsylvania up to $25
million over 5 years to support the RHRC. The RHRC is expected to
provide technical assistance to rural hospitals including review and
approval of the hospitals' global budgets and transformation plans, as
well as data collection, analytics, and practice transformation
support.
Transformation plans will be approved by CMS and the RHRC prior to
implementation. The RHRC will monitor the model performance and make
adjustments as necessary.
Question. There is a lot of excitement around the Pennsylvania
Rural Health Model. It clearly holds great promise. I am pleased to see
CMS working with States to design innovative rural health care payment
strategies. Can you explain what exactly happens if the rural hospitals
participating in the Pennsylvania Rural Health Model have costs greater
than their global budget allows? Is this also accounted for as part of
the transformation plan?
To clarify, the payment model is based on historical net revenue.
Theoretically the hospital's cost structure should be accounted for as
a part of the transformation plan. There could be a scenario where a
hospital recognized more volume than projected resulting in higher
cost. In that case the global budget for the following year would be
adjusted accordingly.
______
Question Submitted by Hon. Michael B. Enzi
Question. Medicare's Sole Community Hospital designation is
important to many Wyoming hospitals, but to qualify, a potential sole
community hospital must be located 35 miles away from the nearest
hospital in most cases, with the exclusion of Critical Access
Hospitals. How does excluding Critical Access Hospitals from the
geographic limit affect how the sole community hospital designation is
targeted?
Answer. I defer to Ms. Thompson.
______
Question Submitted by Hon. Rob Portman
and Hon. Michael F. Bennet
Question. We have previously introduced legislation to encourage
providers to participate in alternative payment models and facilitate
care coordination, including the Medicare PLUS Act (S. 2498 in the
114th Congress) and the Medicare Care Coordination Improvement Act (S.
2051 in the 115th Congress). When we consider coordinating care for
patients in rural settings, what administrative burdens do you face?
What can Congress do to ensure that value-based care is effective in
rural areas?
Answer. Heretofore it has been difficult for hospitals in rural
settings to participate in alternative payment models. Most of the
innovative payment models to date require large numbers of providers
and patients. Rural hospitals tend to have fewer providers on their
medical staff. In addition, rural hospitals tend to have relatively
small administrative staff as compared to their urban counterparts.
Innovative payment models require infrastructure to design, implement
and test. The best approach to expand value based care in rural
communities is to continue exploring several different options for
rural hospitals transformation with the understanding that rural
hospitals will require more financial support and technical assistance
as compared to urban providers.
______
Questions Submitted by Hon. Ron Wyden
pennsylvania rural health model
Question. The Pennsylvania Rural Health Model is an exciting new
model that will test whether the predictability of a global budget will
allow rural hospitals to invest more in quality and focus on preventive
care.
As Pennsylvania's Secretary of Health, what issues did you identify
as unique to rural areas that informed the design of the global payer
model?
Answer. There were several influencing factors that prompted
Pennsylvania to design the global payer model. We noted that a large
number of rural hospitals were financially challenged. It was apparent
that reasons causing the financial instability were not going to change
and threatened the survivability of rural hospitals across the State.
They included:
The number of inpatient admissions is declining nationally,
a trend that is also prevalent in rural hospitals;
Rural hospitals frequently lack the financial and human
resources to offer complex, highly specialized inpatient care
that is required for most admissions today;
Reimbursement for rural hospitals remains predominantly fee-
for-service with public payers contributing a sizable
percentage of the hospitals' revenue; and
The combination of declining inpatient admissions resulting
in decreased reimbursement and a payer mix that yields a lower
price per service is exacerbating an already unstable business
model.
Question. When considering other global payer models, such as
Maryland's, what aspects needed modification to accommodate the
specific needs of rural hospitals and allow them to focus on quality
and prevention?
Answer. While Maryland has experienced success using global
budgets, a notable distinction was that the State is a rate setting
State that can use its regulatory authority to establish inpatient and
outpatient rates for all hospitals. Pennsylvania does not have the same
regulatory authority so it was required to develop a new methodology
for the payment model. The model is based on each hospital's historical
net revenue.
Question. How did you ensure the structure of the global payer
model addressed the unique financial and operational needs of rural
hospitals in Pennsylvania?
Answer. During the design process, we worked with rural hospital
CEOs, the Hospital Association of Pennsylvania, as well as rural health
associations to be certain we were addressing the unique needs of rural
hospitals.
rural workforce
Question. As discussed during the hearing, the shortage of primary
and specialty care providers is a critical issue facing rural
communities across the country. In Oregon, 25.9 percent of residents
live in a health professional shortage area. Difficulty recruiting and
retaining physicians and other members of the care team can result in
longer patient wait times and reduced access to care for those living
in rural communities.
What concrete policy ideas would you suggest this committee pursue
to help attract more providers to rural America?
Answer. It is necessary to approach recruitment to rural
communities differently. It will be very difficult to fulfill the
physician and health-care workforce using traditional strategies. When
I was in Pennsylvania I considered developing a ``Rural Health
Workforce.'' The design would be to offer loan repayment and salary for
short term service in rural communities, such as two-week service
blocks. The community would provide housing for the physicians rotating
in the community. My thoughts were to leverage providers in the large
academic medical centers to recruit primary care and advanced nurse
practitioners. It would require many providers and strong care
coordination. The model has the potential to increase access to needed
providers in rural communities.
rural beneficiary health needs
Question. Rural communities tend to be older, sicker, and lower
income compared to their urban counterparts. When rural hospitals are
forced to close their doors, Medicare beneficiaries living in the
surrounding areas often have limited health-care options. The
prevalence of multiple chronic conditions among those living in rural
areas heightens the need to ensure all Medicare beneficiaries have
access to high quality care--regardless of where they live.
In your view, where should this committee focus its efforts to
ensure that Medicare beneficiaries living in rural areas (especially
those with multiple chronic conditions) have access to high quality
care?
Answer. I think the focus should be on developing innovative
payment and delivery models that meet the needs of rural communities.
Also, investments in technology such as virtual care to larger urban
centers is important.
Question. What Medicare policy changes would be most impactful in
the short term and long term?
Answer. CMS should change supplemental payments for rural hospitals
away from those that are inpatient centric to a more population health
based payment.
______
Question Submitted by Hon. Debbie Stabenow
and Hon. Benjamin L. Cardin
dental care
Question. Lack of oral health care is a significant public health
problem in the United States. Significant health professional shortages
and lack of access to dentistry impacts rural and underserved
communities disproportionately. We know that our seniors are negatively
impacted by the lack of a dental benefit in Medicare. We also know that
children, families and people with disabilities who rely on Medicaid
and CHIP, programs which offer coverage for pediatric dental care and
sometimes care for adults, often struggle to find providers to see
them. Nowhere is the need for comprehensive dental coverage and access
to providers more profound than in our rural and underserved
communities. We have an opportunity to address the needs of our rural
and underserved communities by improving our health care system by
incorporating dental care more holistically through better coverage in
Medicare, Medicaid and CHIP, utilizing telemedicine, and assessing
provider and workforce gaps that can and should be filled in these
communities. Ms. Thompson, Ms. Martin, Ms. Murphy, Mr. Pink, and Dr.
Mueller, what is the most important thing that we, as the Senate
Finance Committee, can do to improve dental care and coverage for
people living in rural and underserved communities?
Answer. As previously described, I think we should approach
recruitment to rural communities differently. It will be very difficult
to fulfill the physician and health-care workforce using traditional
strategies. When I was in Pennsylvania I considered developing a
``Rural Health Workforce.'' The design would be to offer loan repayment
and salary for short term service in rural communities. The community
would provide housing for the physicians rotating in the community. My
thoughts were to leverage the large academic medical centers to recruit
primary care and advanced nurse practitioners. It would require a large
number of providers and strong care coordination. This approach has the
potential to also work in dental care.
______
Question Submitted by Hon. Debbie Stabenow
maternity coverage
Question. We've heard from families and health care providers in
Michigan who are concerned about access to maternity coverage in rural
areas. Close to 500,000 women give birth each year in rural hospitals
and often face additional barriers and complications. For example,
women in rural areas report higher rates of obesity, deaths from heart
disease, and child-birth related hemorrhages. In addition, more than
half of women in rural areas must travel at least half an hour to
receive obstetric care, which can lead to decreased screening and an
increase in birth related incidents.
Since 2004, a large number of rural obstetric units have closed,
and only increased the distances that mothers must travel in order to
receive maternity and delivery care. Unfortunately, the percent of
rural counties in the United States without hospital obstetric units
increased by about 50 percent during the past decade.
Do you have experience with loss of obstetric care for women within
your respective fields?
Answer. I do not.
Question. What steps should be taken to ensure that the proper
range of maternal care services is being offered through innovative
rural health models?
Answer. Studies have demonstrated that quality outcomes in
obstetrical services are improved when they are performed in centers
that perform a large number of deliveries. In other words, the higher
the volume the better the outcomes. Rural birthing centers tend to
perform a lower number of deliveries. While I do not believe that all
rural hospitals should have obstetrical services, I do think that
utilizing virtual care for prenatal visits, lessening the need for
women to travel while receiving high quality care from urban centers.
______
Questions Submitted by Hon. Benjamin L. Cardin
telemedicine
Question. Although many may think of Maryland as an urban hub with
its DC suburbs and large cities, there are parts of my State, both on
the Eastern Shore and on the western side of the State, that are either
very rural or medically underserved. My constituents who live in these
parts of the State, must often drive long distances to get the health
care they need. One way to increase access to quality health services
to rural and underserved communities, is by offering treatment through
telehealth technology. Ms. Murphy, how do you see the role of
telehealth continuing to grow in health-care delivery, and how can it
be better utilized to increase care for Medicare beneficiaries?
Answer. I see virtual care such as telemedicine and remote
monitoring as enabling strategies to improve access to care for those
residing in rural communities.
chronic kidney disease and medigap
Question. For many Medicare beneficiaries living with kidney
failure, particularly those living in rural or underserved areas,
accessing affordable care for their complex and chronic condition is a
constant financial challenge. Over 92,000 dialysis patients live in
states with no access to Medigap. This often leaves them unable to
afford Medicare Part B's 20 percent cost sharing, which for a patient
with kidney failure can often amount to tens of thousands of dollars of
out-of-pocket costs each year. Ms. Murphy, have you had challenges with
Medicare beneficiaries who don't have access to Medigap coverage
getting the care they need? For example Medicare beneficiaries or
patients with ESRD under 65?
Answer. I have not had experience in this area.
Question. Could you speak to the challenges Medicare beneficiaries
face when they don't have access to Medigap plans and the benefits for
Medicare beneficiaries who do have access to Medigap plans?
Answer. Studies have demonstrated that seniors with Medigap
policies have higher utilization rates as compared to those that do not
have Medigap policies. Given the high cost of health care it is fair to
assume that Medicare beneficiaries without Medigap coverage would be
less likely to access health-care services.
______
Questions Submitted by Hon. Robert P. Casey, Jr.
Question. In your written testimony, you discuss the innovation of
the Pennsylvania Rural Health Model and the ways in which this model
can support the transformation of the health care service delivery.
Could you expand on the ways Pennsylvania incorporated new or existing
telehealth services into this new model of care and payment?
Answer. As we designed the model we envisioned that hospitals in
rural communities could leverage telehealth to improve access to health
care. Rural hospitals were encouraged to collaborate with larger urban
hospitals to provide the services Jacking in their respective
communities.
Question. In your written testimony you stated that ``the
challenges faced by rural hospitals across the country mirrored those
in Pennsylvania.'' Could you expand on your thoughts about the
viability of using the Pennsylvania Rural Health Model as the basis for
an initiative that other States may use to develop a global budget
model that is specific to their State?
Answer. Numerous States have expressed interest in the Pennsylvania
Rural Health Initiative. It would be beneficial to expand the
initiative to include other States. A larger sample size would allow
for the opportunity to refine and improve the model to meet the needs
of rural hospitals. In addition, there would be lessons learned that
potentially could lead to using global budgets more broadly.
What are ways the Federal Government can be involved in and be
supportive of successfully developing and implementing these innovative
models?
CMMI has the expertise and infrastructure to test innovative
payment and delivery models. Continued support of CMMI will be crucial
in expanding value-based payment models.
______
Prepared Statement of George H. Pink, Ph.D., Deputy Director, North
Carolina Rural Health Research Program; Senior Research Fellow, Cecil
G. Sheps Center for Health Services Research; and Humana Distinguished
Professor, Gillings School of Global Public Health, University of North
Carolina
Chairman Hatch, Ranking Member Wyden, and members of the committee,
thank you for the opportunity to testify today on behalf of my
colleagues at the North Carolina Rural Health Research Program and the
Gillings School of Global Public Health at The University of North
Carolina at Chapel Hill. We research problems in rural health care
delivery and are funded primarily by the Federal Office of Rural Health
Policy.
I am here to discuss what we know about rural hospital closures,
and I will start with an all too common story. Coalinga Regional
Medical Center in Coalinga, CA is a 24-bed acute care hospital with 200
employees. On May 1st, it announced that after 18 months of losses
totaling $4.5 million, it is insolvent and will close all services in
June. The closure will leave residents in the rural Fresno County city
of 17 thousand people without an emergency room. The nearest hospital
is Adventist Health in Hanford, which is over 40 miles away. Coalinga
will be the second hospital in the San Joaquin Valley to close in the
past 6 months. Tulare Regional Medical Center, a 112-bed hospital,
closed 6 months ago. Across the country, 125 rural hospitals have
closed since 2005, 83 since 2010.
Why is this happening? Long-term unprofitability is an important
factor. Years of losing money results in little cash, debt payments
that can't be made, charity care and bad debt that can't be covered,
older facilities, and outdated technology.
Why do they lose money? Small rural hospitals serve patients who
are older, sicker, poorer, and more likely to be un- or under-insured.
They staff emergency rooms, often in communities with small populations
and low patient volumes. Combine this with reimbursement reductions,
professional shortages, and many other challenges--you can see why I
prefer being a professor to a rural hospital executive.
What happens after a closure? Some convert to another type of
health care facility, but more than one half no longer provide any
health care services--they are now parking lots, apartments, or empty
buildings. Patients travel an average of 12.5 miles to the next closest
hospital, but many travel 25 miles or more. For the old, poor, and
disabled who cannot afford or do not have access to reliable
transportation, these distances can be very real barriers to obtaining
needed care.
Who is most affected? We have investigated communities served by
rural hospitals at high risk of financial distress because they may be
the next facilities to close. These communities have significantly
higher percentages of people who are black, unemployed, lacking a high
school education, and who report being obese and having fair to poor
health; in other words, vulnerable people. If the hospitals that serve
these communities reduce services or ultimately close, already
vulnerable people will be at increased risk.
What can be done? We can try to improve what we have by exploring
ways to better target Medicare payments at rural hospitals in greatest
need and where closure would have the greatest adverse consequences on
the communities.
Preferably, we should develop something new. At meetings around the
country, the most common frustration I hear is the lack of a model to
replace a distressed or closed hospital. We have acute care hospitals
with emergency rooms at one end and primary care clinics at the other
end, but we need something in-between. There is no shortage of
innovative ideas--eight to ten new rural models have been proposed by
various organizations. The profound challenges facing providers that
serve rural communities are not going away: we need to step up the pace
of innovation--faster evaluation and implementation of new models, and
development of the Medicare policies and regulations that will allow
and sustain them.
Thank you again for the opportunity to discuss these issues with
you today, particularly because during the past 35 years, some of the
most innovative and effective developments in rural health policy have
emerged from the Finance Committee.
______
Prepared Statement of George H. Pink, Ph.D., Deputy Director, North
Carolina Rural Health Research Program; Senior Research Fellow, Cecil
G. Sheps Center for Health Services Research; and Humana Distinguished
Professor, Gillings School of Global Public Health; and G. Mark Holmes,
Director, North Carolina Rural Health Research Program; Director, Cecil
G. Sheps Center for Health Services Research; and Professor, Gillings
School of Global Public Health, University of North Carolina
Chairman Hatch, Ranking Member Wyden, and members of the committee,
thank you for the opportunity to testify today on behalf of my
colleagues at the North Carolina Rural Health Research Program (NC
RHRP) and the Gillings School of Global Public Habout our research into
financial distress and closure of rural hospitals.
The NC RHRP at the Cecil G. Sheps Center for Health Services
Research is built upon a 44-year history of rural health research at
The University of North Carolina at Chapel Hill and draws on the
experience of a wide variety of scholars and researchers, analysts,
managers, and health service providers associated with the Center. NC
RHRP studies problems in rural health care delivery through basic
research, policy-relevant analyses, geographic and graphical
presentation of data, and the dissemination of information to
organizations and individuals who can use the information for policy or
administrative purposes to address complex social issues affecting
rural populations. We are funded primarily by the Federal Office of
Rural Health Policy (FORHP) in the Health Resources and Services
Administration.
Our testimony summarizes our research on rural hospital closures
and the financial distress of rural hospitals. To explain, we will
focus on the following four categories: rural hospital closures between
2005-18, causes of financial distress and closure, characteristics of
communities served by hospitals at high-risk of financial distress, and
potential strategies that might be considered.
rural hospital closures between 2005-18
We define rural hospital closures as rural hospitals (including all
Critical Access Hospitals) that close their inpatient service or move
their services fifteen or more miles away from the current location.
The definition is important because of the variation in circumstances
that might be considered open or closed.
Rural hospital closures are sometimes difficult to identify because
they may close and re-open, be part of a merger, a move, a disaster,
etc. For example, they may close temporarily due to hurricane damage or
they may close their emergency department, but keep inpatient care
open. Our primary method of discovering closed hospitals is through
media outlets. Applying this definition helps us keep an accurate and
defensible count as not every hospital administrator sees their
situation as a closure.
Figure 1 shows that since January 2005, 125 rural hospitals have
closed (83 since January 2010).\1\ These closures increased annually
until 2016, but have started to slow.
---------------------------------------------------------------------------
\1\ ``Rural Hospital Closures.'' 2014; http://
www.shepscenter.unc.edu/programs-projects/rural-health/rural-hospital-
closures/.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Rural hospitals are often the largest or second largest employer in
their communities, so the closure of the only hospital in the county
can have significant negative economic effects on a rural community.\2\
After the closure of inpatient services, alternative health care
delivery models offer the potential to retain local access to some
health care services as well as soften the economic impact of closure
on the community. Of the 125 closed hospitals, some have converted to
outpatient/primary care clinics (18.1%), urgent or emergency care
(21.7%), or skilled nursing facilities (6%), but more than half either
converted to non-health care use (54.2%), such as condominiums, or were
abandoned.
---------------------------------------------------------------------------
\2\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1702512/.
Most closures and ``abandoned'' rural hospitals are in the South
(60%), where poverty rates are higher and people are generally less
healthy and less likely to have health insurance (private or
public).\3\ Southern States have also been less likely to expand
Medicaid. Ten out of 18 States that have not expanded Medicaid are
southern States.\4\,\5\ It is difficult to accurately
determine whether it is the expansion decision per se that has led to
higher closure rates, or whether States that have not expanded Medicaid
have other factors leading to higher closure rates; this is an
important question on which many researchers are currently working.
---------------------------------------------------------------------------
\3\ Garfield R, Damico A. ``The Coverage Gap: Uninsured Poor Adults
in States That Do Not Expand Medicaid.'' Kaiser Family Foundation.
November 1, 2017. https://www.kff.org/medicaid/issue-brief/the-
coverage-gap-uninsured-poor-adults-in-states-that-do-not-expand-
medicaid/.
\4\ ``Current Status of State Medicaid Expansion Decisions.''
Kaiser Family Foundation. https://www.kff.org/health-reform/slide/
current-status-of-the-medicaid-expansion-decision/.
\5\ Rural Health Information Hub. ``Rural Health Disparities: What
regions of the country experience high levels of rural health
disparities?'' November 14, 2017. https://www.
ruralhealthinfo.org/topics/rural-health-disparities.
Figure 2 shows that patients in affected communities are probably
traveling at least 5 to 30 miles to access inpatient care (12.5 miles
on average); however, 43% of the closed hospitals are more than 15
miles to the nearest hospital, and 15% are more than 20 miles.\6\ The
additional travel burden is of concern because residents of rural
communities are less likely to have reliable transportation (due to
age, health conditions, and income) than urban residents.\7\
---------------------------------------------------------------------------
\6\ Clawar M, Thompson K, Pink G. ``Range Matters: Rural Averages
Can Conceal Important Information.'' (January 2018). NC Rural Health
Research and Policy Analysis Program. UNC-Chapel Hill. http://
www.shepscenter.unc.edu/download/15861/.
\7\ ``Rural Health Snapshot 2017.'' (May 2017). NC Rural Health
Research and Policy Analysis Program. UNC-Chapel Hill.http://
www.shepscenter.unc.edu/download/14853/.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
causes of financial distress and closure
The causes of financial distress and closure of rural hospitals are
numerous and complex. We have developed a model to predict financial
distress among rural hospitals. After exploring a large number of
potential causes, we found that four types of factors predict financial
distress: (1) financial performance and profitability; (2) proportion
of Medicare and Medicaid in the payer mix; (3) hospital ownership and
size, and (4) characteristics of the market served by the hospital,
including competition, economic condition, and market size.
Among these factors, profitability is particularly important.
Nationally, urban hospitals were twice as profitable as rural hospitals
in 2016: the U.S. median profit margin for urban hospitals was 5.51%
which was more than double the margins for Critical Access Hospitals
(2.56%) and other types of rural hospitals (2.01%). There was also
substantial geographic variation in profitability: among census
regions, Critical Access Hospitals in the South and other types of
rural hospitals in the Northeast were less profitable than hospitals in
other regions.
Figure 3 shows that, in 2016, 31 percent of all acute care
hospitals (1,375/4,471) were unprofitable, and the majority of
unprofitable hospitals were rural: 847 unprofitable rural hospitals
versus 528 unprofitable urban hospitals.\8\
---------------------------------------------------------------------------
\8\ GH Pink, K Thompson, HA Howard, GM Holmes. ``Geographic
Variation in the 2016 Profitability of Urban and Rural Hospitals.'' NC
Rural Health Research Program Findings Brief. March 2018.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
*Note: Other Rural Hospitals are Medicare Dependent Hospitals, Sole
Community Hospitals, and rural PPS hospitals (as well as not CAHs and
not urban)
There was also substantial geographic variation in the number of
unprofitable hospitals: among census regions, the greatest number of
unprofitable hospitals were ``other rural hospitals'' in the South,
urban hospitals in the South, and Critical Access Hospitals in the
Midwest. There are many reasons for geographic variation in the
profitability of urban and rural hospitals: for example, compared to
urban hospitals, rural hospitals serve older, poorer, and sicker
communities where higher percentages of patients are covered through
public insurance programs, if they are covered at all. Most rural
hospitals are located in the South, the region with the highest rates
of poverty, and in the Midwest, the region with the lowest rates of
poverty. Regardless of the reasons, unprofitable hospitals are at
greater risk of closing and warrant elevated concern by policy makers
and those concerned with access to hospital care by rural residents.
characteristics of communities served by hospitals at
high risk of financial distress
We used profitability and the other three factors to develop a
model to predict financial distress of rural hospitals.\9\ Among 2,177
rural hospitals in 2015, 9 percent (197 hospitals) were classified at
high risk of financial distress and 16 percent (339 hospitals) at
medium-high risk. Most high-risk hospitals are located in the South:
States with the largest percentages of rural hospitals at high risk
were Oklahoma (31%, n=24), Tennessee (25%, n=13), Florida (25%, n=6),
Virginia (24%, n=7), and Alabama (23%, n=10).
---------------------------------------------------------------------------
\9\ GM Holmes, BG Kaufman, GH Pink. ``Predicting Financial Distress
in Rural Hospitals.'' Journal of Rural Health 33 (2017) 239-249.
[GRAPHIC] [TIFF OMITTED] T2418.008
One finding of particular concern was a racial disparity among
communities served by hospitals at high-risk of financial distress
compared to those served by hospitals not at high risk. Communities
served by rural hospitals at high risk of financial distress had a
significantly higher percentage of non-Hispanic black residents (16%
vs. 7%), while those served by rural hospitals not at high risk had a
higher percentage of non-Hispanic white residents (84% vs. 75%).
Communities served by rural hospitals at high risk of financial
distress had a significantly higher percentage of residents who did not
graduate high school and who were unemployed. Finally, communities
served by rural hospitals at high risk of financial distress had a
significantly higher percentage of residents who reported having fair
to poor health, who were obese, who smoked, and who had increased years
---------------------------------------------------------------------------
of potential of life lost (premature mortality).
Hospitals at high risk of financial distress serve a more
vulnerable population than those not at high risk. Because hospitals at
high risk of financial distress are more likely to close or curtail
services, these vulnerable populations are at increased risk of reduced
access to hospital services, exacerbation of health disparities, and
loss of hospital and other types of local employment.
potential strategies to address financial distress and
closure of rural hospitals
Given the factors above and the fact that during the past 35 years
some of the most innovative and effective developments in rural health
policy have emerged from the Finance Committee, we hope the committee
will consider our two suggested approaches to address financial
distress and closures.
1. Improve what exists--Assess whether Medicare payment
designations could be better targeted. Over the past 25 years, Congress
has created special payment classifications and adjustments to assist
rural hospitals, including Critical Access Hospital, Sole Community
Hospital (SCH), Medicare Dependent Hospital, Rural Referral Center,
Medicare Disproportionate Share Hospital and low-volume hospital
adjustment. These programs are important to many rural hospitals;
however, some of them might be refined to better target rural hospitals
at high risk of financial distress. For example, the SCH program
provides payment enhancements to safety-net hospitals that are often
the only source of such services for many rural communities. In our
initial study we found that there would be significant financial
consequences to hospitals if the SCH program did not exist, However, we
also found that the hospitals that benefited the least from the SCH
program were in the South,\10\ the region with the greatest prevalence
of rural hospitals at high risk of financial distress and closures.\11\
In our subsequent study, we found that hospitals that benefited from
the SCH program were: (1) located in markets with greater total
population, lower unemployment and poverty rates, and higher high
school graduation rates; (2) located in counties with lower percentages
of people who are obese, have fair/poor self-rated health, and have no
health insurance, as well as a lower number of potential years of life
lost, and; (3) more profitable (higher total and operating margins),
larger (greater net patient revenue), more efficient (higher occupancy
rate), and employed more FTE staff per bed.\12\ These findings raise
the question of whether the SCH program could be better targeted by
reassessing eligibility criteria, conditions of participation, or the
payment method. This could be done for other Medicare hospital payment
classifications and other types of providers, such as ambulances and
home health.
---------------------------------------------------------------------------
\10\ SCHs in the South would be less affected by cessation of the
SCH program because more are already paid at the IPPS rate (because
their hospital-specific rates are lower than the Federal IPPS rate).
\11\ SR Thomas, R Randolph, GM Holmes, GH Pink. ``The Financial
Importance of the Sole Community Hospital Payment Designation.'' NC
Rural Health Research Program Findings Brief. November 2016.
\12\ SR Thomas, GM Holmes, GH Pink. ``Differences in Community
Characteristics of Sole Community Hospitals.'' NC Rural Health Research
Program Findings Brief. November 2017.
2. Develop something new--Select some models for demonstration and
accelerate evaluation of current demonstration projects. The Centers
for Medicare and Medicaid Services' Innovation Center has several rural
demonstration projects, including the Rural Community Hospital
Demonstration, the Frontier Community Health Integration Project and
the Pennsylvania Rural Health Model. The Medicare Payment Advisory
Commission has proposed a 24/7 emergency department model and a clinic
and ambulance model for communities that may have insufficient
inpatient volume.\13\ The American Hospital Association Task Force on
Ensuring Access in Vulnerable Communities Emerging Strategies to Ensure
Access to Health Care Service identified several rural models.\14\ The
National Rural Health Association has proposed the Community Outpatient
Hospital as a model to ensure emergency access to care for rural
patients.\15\ The Kansas Hospital Association is promoting ``Primary
Health Centers'' to shift small rural hospitals away from a focus on
admissions to more outpatient and transitional services.\16\ The Oregon
Rural Health Reform Initiative is an effort to sustain rural hospitals
financially by transitioning them away from a cost-based reimbursement
model.\17\ Thus there is no shortage of innovative ideas that could
lead to demonstration projects and proposed models that may hold the
ultimate solutions for enhancing access to care in rural communities.
The profound challenges facing providers that serve rural communities
are getting worse: we believe that innovation needs to be accelerated--
testing of new models, simpler approval processes, faster evaluation
and implementation, and development of new Medicare payment methods,
Conditions of Participation, and regulations that will allow and
sustain new models of rural care and Medicaid as foundational elements
of demonstration models.
---------------------------------------------------------------------------
\13\ ``Improving Efficiency and Preserving Access to Emergency Care
in Rural Areas.'' Chapter 7 in Report to Congress: Medicare and the
Health Delivery System. Medicare Payment Advisory Commission. June
2016.
\14\ https://www.aha.org/system/files/content/16/ensuring-access-
taskforce-exec-summary.pdf.
\15\ https://www.ruralhealthweb.org/advocate/save-rural-hospitals.
\16\ Kansas Hospital Association Rural Health Visioning Technical
Advisory Group. March 2015. ``Sustaining Rural Health Care in Kansas:
The Development of Alternative Models.'' Topeka, Kansas. Kansas
Hospital Association.
\17\ http://www.oregon.gov/oha/pages/rhri.aspx.
---------------------------------------------------------------------------
conclusion
In conclusion: (1) Rural hospital closures are likely to continue
and will probably occur more frequently in disadvantaged communities;
(2) the causes of financial distress and closure are complex and the
number of rural hospitals at high risk of financial distress is
growing; and (3) assessment of whether Medicare payment designations
could be better targeted and acceleration of innovation and testing of
more new models are recommended strategies.
Many communities across the United States are concerned about the
ability of their hospitals to continue providing health care to their
residents. Rural hospitals at high risk of financial distress and
closure are not well positioned to meet the challenges of the new
realities in the health care delivery system. Major payment reform and
industry restructuring will put pressures on hospitals of all types,
but especially on financially weak organizations. Thus, it will be
critical to assess carefully how these changes are affecting rural
hospitals, the care they deliver, the populations they serve, as well
as how existing and potential policies might impact hospitals.
______
Questions Submitted for the Record to George H. Pink, Ph.D.
Questions Submitted by Hon. Orrin G. Hatch
Question. Since Critical Access Hospitals are reimbursed on a cost
basis, which covers their expenses to provide services to Medicare
beneficiaries, do you believe that some of these facilities'
reimbursement challenges stem from the lack of commercial
reimbursement? Can you explain in more detail why only certain Critical
Access Hospitals are financially distressed and losing money?
Answer. Yes, most Critical Access Hospitals (and other rural
hospitals as well) have payer mixes with a lower percentage of
commercial insurance and a higher percentage of Medicare, Medicaid, and
uncompensated care (bad debt and charity care) in comparison with urban
hospitals. One study found:
Rural Urban
Hospitals Hospitals
Medicare 52% 41%
Medicaid 15% 18%
Commercial 24% 31%
Selfpay and other 9% 10%
Source: M Hall and MF Owings, ``Changing Patterns in Hospitalization and
Inpatient Surgery of Rural and Urban Residents,'' National Center for
Health Statistics, 2015 National Conference on Health Statistics.
Although CAHs were originally reimbursed 101 percent of costs for
Medicare beneficiaries, many continue to struggle under the 2-percent
reduction imposed by sequestration (101 percent minus 2-percent
sequester for actual value of 99 percent of cost). Cost-based
reimbursement is a buffer against volume decline or cost increases, but
it doesn't provide profit to cover high fixed costs that are not
covered by rates paid by non-Medicare payers.
A particular payer mix challenge that we have investigated is
uncompensated care. In a recent study, we found that between 2014-16,
the median uncompensated care as a percent of operating expense was
highest for smaller hospitals. Specifically, it was highest for
hospitals with less than $10 million in net patient revenue and next
highest for hospitals with $10-$20 million in net patient revenue,
almost all of which are CAHs. Furthermore, between 2015 and 2016,
uncompensated care increased for hospitals with less than $20 million
in net patient revenue and decreased for hospitals with more than $20
million in net patient revenue.
Higher levels of uncompensated care reduce profitability and
increase the risk of financial distress among CAHs and other rural
hospitals.
The causes of financial distress of CAHs and other rural hospitals
are numerous and complex. We have developed a model to predict
financial distress among rural hospitals. After exploring a large
number of potential causes, we found that four types of factors predict
financial distress: (1) financial performance and profitability; (2)
proportion of Medicare and Medicaid in the payer mix; (3) hospital
ownership and size, and; (4) characteristics of the market served by
the hospital, including competition, economic condition, and market
size (see GM Holmes, BG Kaufman, and GH Pink, ``Predicting Financial
Distress in Rural Hospitals,'' Journal of Rural Health 33 (2017) 239-
249).
[GRAPHIC] [TIFF OMITTED] T2418.009
Among these factors, profitability is particularly important.
Nationally, urban hospitals were twice as profitable as rural hospitals
in 2016: the U.S. median profit margin for urban hospitals was 5.51
percent, which was more than double the margins for Critical Access
Hospitals (2.56 percent) and other types of rural hospitals (2.01
percent).
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
There are many reasons why CAHs and other rural hospitals are more
unprofitable than urban hospitals. Low patient volumes, workforce
shortages, and lack of access to capital are pervasive. Rural hospitals
serve older, poorer, and sicker communities where higher percentages of
patients are covered through public insurance programs, if they are
covered at all. Regardless of the reasons, unprofitable hospitals are
at greater risk of closing and warrant elevated concern by policy
makers and those concerned with access to hospital care for rural
residents.
Question. According to your testimony, small rural hospitals that
are paid under Medicare's traditional inpatient payment system also
face financial stress. What would be an appropriate Medicare margin for
these rural hospitals to make?
Answer. This is a difficult question to answer. In its March 2018
Report to the Congress, MedPAC reported that, in 2016, rural IPPS
hospitals (excluding CAHs) had a -7.4 percent overall Medicare margin,
which was 2.4 percentage points higher than the -9.8 percent margin for
urban hospitals. Some of this difference could be accounted for by
Medicare disproportionate hospital (DSH) payments: the adjustment
formula is capped for <500-bed rural hospitals but there is no cap for
>100-bed urban hospitals. MedPAC concludes that, ``While Medicare
payments do not cover the full costs (fixed and variable) of the
average hospital, they are approximately 8 percent higher than the
marginal cost of adding additional Medicare patients. Therefore,
hospitals with excess capacity have an incentive to serve more Medicare
patients.'' Although most rural hospitals have excess capacity and want
to serve more Medicare patients, this is a challenge in communities
with stable or declining numbers, and high proportions of Medicare
beneficiaries who are poor, disabled, and without access to
transportation. Nevertheless, some would say that -7.4 percent is an
appropriate Medicare margin for rural IPPS hospitals.
In contrast, recent articles in the practitioner literature claim
that declining Medicare margins are resulting in layoffs and reductions
in services, particularly in rural markets where there hasn't been an
influx of new employers offering commercial coverage (Dickson V,
``Slumping Medicare margins put hospitals on precarious cliff,'' Modern
Healthcare, November 25, 2017). Another article claims that unless
hospitals contain losses from treating Medicare patients, their
financial futures are in jeopardy (Goldsmith J and Bajner R, ``5 Ways
U.S. Hospitals Can Handle Financial Losses From Medicare Patients,''
Harvard Business Review, November 15, 2017). This would suggest that
current Medicare margins for rural IPPS hospitals are too low.
So what is an appropriate Medicare margin? At the risk of sounding
like an economist, on the one hand, it can be argued that Medicare
should cover its own costs in which case 0 percent is an appropriate
Medicare margin. On the other hand, it could be argued that cost
shifting is appropriate and desirable, and the Medicare Trust Fund
cannot afford to absorb price increases that would result in an average
Medicare margin of 0 percent. One thing is certain, if the gap between
Medicare rates and commercial rates continues to grow, this will be a
problem. As MedPAC states, ``the disparity in incentive to see Medicare
patients and commercially insured patients will have to be addressed .
. . or eventually the difference between commercial rates and Medicare
rates will grow so large that some hospitals will have an incentive to
focus primarily on patients with commercial insurance'' (March 2018
Report to the Congress, page 117).
______
Questions Submitted by Hon. Michael B. Enzi
Question. There has been a lot of focus on Critical Access
Hospitals, and rightfully so, but how is patient care delivered and
reimbursed in hospitals that are close to meeting the CAH designation
but not quite there, like Campbell County Health in my hometown of
Gillette?
Answer. Over the past 25 years, Congress has created special
payment classifications and adjustments to assist rural hospitals,
including Critical Access Hospital, Sole Community Hospital (SCH),
Medicare Dependent Hospital, Rural Referral Center, Medicare
Disproportionate Share Hospital and low-volume hospital adjustment. (A
good summary of these designations can be found at https://
www.ruralhealth
info.org/topics/hospitals#designations.)
Campbell County Health includes Campbell County Memorial Hospital,
a 90-bed acute care hospital that is designated a Sole Community
Hospital (SCH). Congress created the SCH program to support small rural
hospitals for which ``by reason of factors such as isolated location,
weather conditions, travel conditions, or absence of other hospitals,
is the sole source of inpatient hospital services reasonably available
in a geographic area to Medicare beneficiaries.'' A hospital qualifies
as a SCH by meeting the following criteria:
(1) It is located at least 35 miles from a similar hospital; or
(2) It is between 25 and 35 miles from a similar hospital, and
meets one of the following criteria: (a) no more than 25 percent of its
total inpatients or 25 percent of Medicare inpatients admitted are also
admitted to similar hospitals within a 35-mile radius; or (b) it has
fewer than 50 acute care beds and would admit at least 75 percent of
inpatients from the service area were it not for patients requiring
specialized care that the hospital does not offer; or
(3) It is between 15 and 25 miles from other similar hospitals
that are inaccessible for at least 30 days in each of two out of three
years due to topography or weather; or
(4) Travel time to the nearest hospital is at least 45 minutes
because of distance, posted speed limits, or predictable weather.
A SCH is often the only source of hospital care for isolated rural
residents. As such, Medicare SCH classification helps to keep these
institutions financially viable through certain payment enhancements
and protections to the hospital. For inpatient services, Sole Community
Hospitals receive the higher of payments under (1) the Inpatient
Prospective Payment System (IPPS) or (2) an updated hospital-specific
rate (HSR), which are payments based on their costs in a base year
(1982, 1987, 1996, or 2006) updated to the current year and adjusted
for changes in their case mix. Since 2006, SCHs also receive an
additional adjustment set at 7.1 percent above the Outpatient
Prospective Payment System (OPPS) rate for outpatient services.
Additionally, SCHs can qualify for adjustments due to decreases in
inpatient volume and participation in the Hospital Value-Based
Purchasing Program, Hospital Readmissions Reduction Program, and
Hospital-Acquired Condition program.
Senator Enzi may find the following comparative information for
Campbell County Memorial Hospital and other hospitals in Wyoming to be
of interest.
Comparison of Campbell County Memorial Hospital to all Wyoming Hospitals
PMedicare Cost Reports Ending in 2016
------------------------------------------------------------------------
Critical Other
Campbell Access Rural Urban
County Hospitals Hospitals Hospitals
Value in WY in WY in WY
Median Median Median
------------------------------------------------------------------------
Profitability
Operating margin -7.4% -3.0% 5.1% 2.8%
Total margin 3.7% 0.4% 8.9% 2.8%
Cash flow margin 2.7% 1.8% 12.4% 6.8%
Return on equity 2.8% 1.5% 6.8% 1.1%
Liquidity
Current ratio 1.9 3.5 2.9 2.6
Days cash on hand 202 81 118 238
Days in gross accounts 45 57 49 56
receivable
Days in net accounts 85 55 62 59
receivable
Capital structure
Equity financing 73% 68% 89% 82%
Debt service coverage 4.7 7.4 6.5 2.4
Long-term debt to 21% 18% 6% 13%
capitalization
Revenue
Medicare inpatient payer 35% 71% 42% 51%
mix
Medicare outpatient 17% 41% 26% 30%
payer mix
Outpatient revenue to 74% 67% 66% 39%
total revenue
Patient deductions 48% 31% 48% 60%
Medicare outpatient cost 0.40 0.57 0.40 0.26
to charge
Cost
Average age of plant N/A 9.9 9.5 8.2
FTEs per adjusted bed 12.1 11.4 8.4 6.5
Average salary per FTE $58,364 $63,123 $67,422 $79,072
Salaries to net patient 40.6% 55.5% 38.8% 37.2%
revenue
Uncompensated care to 6.4% 7.3% 5.8% 6.9%
total operating expense
Utilization
Acute averarge daily 19 3 17 91
census
Number of hospital cost 16 7 3
reports
------------------------------------------------------------------------
For further information about Sole Community Hospitals, we have
recently produced two findings briefs:
S Thomas, K Thompson, and GH Pink, ``The Community Experience
of Sole Community Hospitals,'' NC Rural Health Research Program
Findings Brief, June 2017.
S Thomas, K Thompson, and GH Pink, ``The Financial Experience
of Sole Community Hospitals,'' NC Rural Health Research Program
Findings Brief, November 2016.
______
Questions Submitted by Hon. Ron Wyden
rural workforce
Question. As discussed during the hearing, the shortage of primary
and specialty care providers is a critical issue facing rural
communities across the country. In Oregon, 25.9 percent of residents
live in a health professional shortage area. Difficulty recruiting and
retaining physicians and other members of the care team can result in
longer patient wait times and reduced access to care for those living
in rural communities.
What concrete policy ideas would you suggest this committee pursue
to help attract more providers to rural America?
Answer. Despite considerable evidence that health professionals
trained in rural sites are more likely to practice in rural
communities, health workforce training remains concentrated in urban
settings. The Federal Government spends $14.5 billion annually on
graduate medical education (GME), but only about 1 percent goes to
rural settings (GAO 2018). Federal GME investments were set by the
Balanced Budget Act of 1997 and are not targeted toward specialties,
health-care settings and geographic regions of the country facing
shortages (Mullan et al 2013; Fraher et al 2017). The National Academy
of Medicine (NAM) has made numerous recommendations that could be
enacted by Congress including: 1. modernizing Federal GME payments to
reward performance, ensure accountability, and incentivize innovation;
2. creating a GME Policy Council in the Office of the Secretary in DHHS
and a GME Center within CMS; and 3. using a portion of existing GME
funds to develop and evaluate innovative GME programs, determine and
validate appropriate GME performance measures, pilot alternative GME
payment methods, and award new Medicare-funded GME training positions
in priority disciplines and geographic areas.
While Medicare spending makes up 71 percent of Federal GME funds,
Congress funds the Teaching Health Center (THC) Program at about $76
million annually. Evaluations have shown that physicians who complete
THC residencies are more likely to work in underserved communities
(Bazemore et al. 2015; Talib et al. 2018). The THC program could be
expanded and funded on a permanent basis, rather than having to rely on
an annual appropriation from Congress. Congress could also expand
programs like the Rural Training Tracks (RTT). Current regulations
require new RTTs to be affiliated with an urban program that has never
had Medicare-supported residents. While Congress can't change this
regulation, it could create and expand funding for a similar program
that does not have this stipulation but does require additional
training slots to be placed in rural areas.
Federally qualified health centers (FQHCs), rural health centers
(RHCs) and Critical Access Hospitals (CAHs) where rural training often
occurs, are often financially fragile. Adding students to these sites
places even greater strains on the organizations. CAHs are considered
non-hospital providers under Medicare funding which means that any time
a resident spends in a CAH results in a loss of Medicare funding for
the parent residency program. One solution would be to classify CAHs
similarly to RHCs and FQHCs so that resident time spent in those
facilities would not result in a loss of Medicare funding for the
parent trainingprogram. Congress could also provide supplemental
funding to CAHs, FQHCs and RHCs that provide residency training to
incent more sites to take on trainees.
In contrast to the $14.5 billion pent annually on GME for
physicians, the Federal Government spends very little on clinical
training for Nurse Practitioners (NPs) and other advanced practice
nurse practitioners (APRNs). Yet NPs play in an increasingly important
role in meeting the primary care needs of rural communities. In 2016,
Nurse Practitioners (NPs) constituted 25.2 percent of providers in
rural practices, up from 17.6 percent in 2008 (Barnes et al. 2018). A
recent evaluation of a CMS demonstration project funding Graduate Nurse
Education (GNE) for AP RNs increased the number of NPs available to
deliver primary care in community-based settings and primary care
(Aiken et al 2018). Funding/or the GNE program could be increased and
targeted toward rural hospitals, rural health clinics, and FQHCs.
For a handout summarizing research on redesigning GME to better
meet population health needs, follow this link: http://
www.shepscenter.unc.edu/workforce_product/research-on-redesigning-
graduate-medical-education-to-better-meet-population-health-needs/.
This handout was also shared with the House Committee on Veterans
Affairs in June 2018.
References
Barnes H, Richards MR, McHugh MD, Martsolf G. ``Rural and Nonrural
Primary Care Physicians Increasingly Rely on Nurse Practitioners.''
Health Affairs. 2018;37(6); 908-9/4.
Bazemore A, Wingrove BS, Petterson S, Peterson L, Raffoul M,
Phillips RL. ``Graduates of Teaching Health Centers Are More Likely to
Enter Practice in the Primary Care Safety Net.'' American Family
Physician. 2015; 92(10): 868-868.
Fraher E, Knapton A, Holmes GM. ``A Methodology for Using Workforce
Data to Decide Which Specialties and States to Target for GME
Expansion.'' Health Services Research. 2017 Feb; 52 Suppl 1: 508-528.
Government Accountability Office, U.S. Department of Health and
Human Services. ``HHS Needs Better Information to Comprehensively
Evaluate Graduate Medical Education Funding.'' GA0-18-240: Published:
March 9, 2018. Publicly Released: March 29, 2018.
Institute of Medicine (IOM). 2014. ``Graduate Medical Education
That Meets the Nation's Health Needs.'' Washington, DC: The National
Academies Press.
Mullan F, Chen C, and Steinmetz E. 2013. ``The Geography of
Graduate Medical Education: Imbalances Signal Need for New Distribution
Policies.'' Health Affairs (Project Hope) 32(11): 1914-21.
Talib Z, Jewers MM, Strasser JH, Popiel DK, Goldberg DG, Chen C,
Kepley H, Mullan F, Regenstein M. ``Primary Care Residents in Teaching
Health Centers: Their Intentions to Practice in Underserved Settings
After Residency Training.'' 2018; 93(1): 98-103.
rural beneficiary health needs
Question. Rural communities tend to be older, sicker, and lower
income compared to their urban counterparts. When rural hospitals are
forced to close their doors, Medicare beneficiaries living in the
surrounding areas often have limited health care options. The
prevalence of multiple chronic conditions among those living in rural
areas heightens the need to ensure all Medicare beneficiaries have
access to high quality care--regardless of where they live.
In your view, where should this committee focus its efforts to
ensure that Medicare beneficiaries living in rural areas (especially
those with multiple chronic conditions) have access to high quality
care?
Answer. The Finance Committee took important steps toward
addressing chronic disease management with the passage of last year's
CHRONIC legislation that created new and important flexibility within
the Medicare Advantage program. An open question is whether the
benefits from the CHRONIC legislation could be expanded to rural
Medicare FFS beneficiaries who have multiple chronic conditions. For
example, it might be possible to pay providers a per member per month
fee for care given to FFS Medicare beneficiaries with multiple chronic
diseases. This might give small and rural practices more freedom to
focus on the unique needs of this population in a non-risk bearing
payment environment. This could also be done in a budget neutral manner
for small practices in geographic isolated areas to limit the costs and
focus on areas of greatest need.
Recommendation: Investigate the feasibility of paying providers a
per member per month fee for care given to FFS Medicare beneficiaries
with multiple chronic diseases.
Question. What Medicare policy changes would be most impactful in
the short term and long term?
Answer. In the short run, the committee could better target
Medicare payments at rural hospitals in greatest need--and where
closure would have the greatest adverse consequences on the
communities. Among rural hospitals types, PPS hospitals with 26-50 beds
(known as ``tweener'' hospitals because they are too large to quality
for CAH status but still relatively small hospitals) and Medicare
Dependent Hospitals have the lowest profitability compared to other
hospitals, Most of these hospitals are located in more rural areas with
a higher percentage of elderly (SR Thomas, GM Holmes, GH Pink, 2012-14,
``Profitability of Urban and Rural Hospitals by Medicare Payment
Classification,'' NC Rural Health Research Program Findings Brief March
2016).
In the longer run, we believe that the best solution is to develop
and implement new models of rural health care. There is no shortage of
innovative ideas that could lead to demonstration projects and proposed
models that may hold the ultimate solutions for enhancing access to
care in rural communities. We believe that the future of rural health
care is new and innovative health-care delivery and payment models that
allow for low patient volumes, recognize fixed costs of maintaining
access to emergency care, use rural relevant quality measures, and are
flexible enough to meet the specific needs of local rural residents.
The profound challenges facing providers that serve rural communities
are not going away.
Recommendation: Step up the pace of innovation--faster evaluation
and implementation of new models, and development of the Medicare
policies and regulations that will allow and sustain them.
______
Questions Submitted by Hon. Debbie Stabenow
rural access to mental health care
Question. Many areas of the United States have little or no access
to psychiatrists to meet the demand for mental health and opioid
treatment services. Recent studies show that 60 percent of all counties
in this Nation--including fully 80 percent of rural counties--do not
have a single psychiatrist to treat residents with mental illnesses.
Based upon HRSA Mental Health Professional Shortage Area data, just 590
psychiatrists serve more than 27 million Americans--most of whom live
in rural areas.
In your testimony, you discussed the role of telemedicine in
expanding access to health care in rural parts of the country.
Do you think these technologies can be employed to enhance the
delivery of mental health and substance abuse treatment services as
well?
Answer. Telehealth, particularly in mental health, has great
potential. Although the volume is growing, it is a very small part of
Medicare service volume: ``The use of telehealth services under the PFS
has grown rapidly in recent years, but remains low. In 2016, 108,000
beneficiaries (0.3 percent of FFS beneficiaries) accounted for over
300,000 telehealth visits totaling $27 million. These services were
most commonly used for basic physician office and mental health
services. Use was concentrated among a small group of clinicians and
beneficiaries'' (MedPAC, March 2018, Report to the Congress, page
xxvii).
The use of telehealth for mental health and substance abuse
treatment could expand if: (1) financial incentives were aligned with
this objective--a distant specialist is paid a professional fee for
telehealth services by FFS Medicare, but a small rural hospital or
clinic receives a $25 facility fee that frequently does not cover its
cost, and rural providers offer the services because it benefits their
patients and keeps care local, but they do this in the absence of a
financial incentive; and (2) the distinction between originating sites
and distant sites was eliminated, which would allow Rural Health
Clinics and FQHCs to provide as well as receive telehealth services.
Recommendation: Assess the adequacy of the facility fee paid to
rural hospitals and clinics for telehealth services, and consider
elimination of originating versus distant sites.
Question. Senator Barrasso and I introduced the Seniors Mental
Health Access Improvement Act, S. 1879, which would add licensed mental
health counselors and marriage and family therapists to the Medicare
program.
While telehealth offers great potential, is there more we can do to
take advantage of mental health professionals already on the ground in
rural America?
Answer. Access to licensed mental health counselors and marriage
and family therapists by Medicare beneficiaries continues to be an
important issue in rural health. Forty years ago, Rural Health Clinics
were the first test sites for the use of nurse practitioners and
physician assistants. RHCs could serve the same role for licensed
mental health counselors and marriage and family therapists. RHCs would
provide a well-defined and limited setting to assess the impact and to
determine whether these providers should be added to the list of
eligible Medicare providers.
Recommendation: Consider testing the impact of increased access to
mental health counselors and marriage and family therapists in Rural
Health Clinics.
The WWAMI Rural Health Research Center is a leader in this area of
research. Recent publications related to your questions include:
Andrilla CHA, Coulthard C, Larson EH, Patterson DG, Garberson LA,
``Geographic Variation in the Supply of Selected Behavioral Health
Providers,'' American Journal of Preventive Medicine Volume 54, Issue
6, Supplement 3, pages S199-S207.
Andrilla CHA, Garberson LA, Patterson DG, Larson EH, ``The supply
and distribution of the behavioral health workforce in America: A
State-level analysis,'' Seattle, WA: WWAMI Rural Health Research
Center, University of Washington, July 10, 2017.
Andrilla CHA, Coulthard C, Larson EH, ``Changes in the supply of
physicians with a DEA DATA Waiver to prescribe buprenorphine for opioid
use disorder,'' Seattle, WA: WWAMI Rural Health Research Center,
University of Washington Data Brief #J62, May 1, 2017.
maternity coverage
Question. We've heard from families and health-care providers in
Michigan who are concerned about access to maternity coverage in rural
areas. Close to 500,000 women give birth each year in rural hospitals
and often face additional barriers and complications. For example,
women in rural areas report higher rates of obesity, deaths from heart
disease, and childbirth-related hemorrhages. In addition, more than
half of women in rural areas must travel at least half an hour to
receive obstetric care, which can lead to decreased screening and an
increase in birth related incidents.
Since 2004, a large number of rural obstetric units have closed,
and only increased the distances that mothers must travel in order to
receive maternity and delivery care. Unfortunately, the percent of
rural counties in the United States without hospital obstetric units
increased by about 50 percent during the past decade.
Do you have experience with loss of obstetric care for women within
your respective fields?
Answer. Loss of obstetrics services has been a prominent issue in
North Carolina. Blue Ridge Regional Hospital in Spruce Pine closed its
labor and delivery unit on September 30th. Angel Medical Center in
Franklin shut down its maternity ward in July 2017. For residents in
these mountain communities, the next closest hospital with a maternity
ward is 20 or more miles away. In the summer, the drive is 30 minutes
but the roads through the mountains during labor pose a major concern
during winter. The peaks in this region are the highest in the eastern
United States (C Pearson and F Taylor, ``Mountain maternity wards
closing, WNC women's lives on the line,'' Carolina Public Press,
September 25, 2017).
Question. What steps should be taken to ensure that the proper
range of maternal care services are being offered through innovative
rural health models?
Answer. A frequently reported reason for closure of obstetrics by a
rural hospital is insufficient volume for a financially viable service.
In rural areas with more than one hospital, the aggregate obstetrics
volume may be financially viable if it is centralized in one facility.
Incentives could be provided by states to develop regional networks of
obstetrical care, perhaps through existing or new Medicaid waiver
authority. Networks could include hospitals and other providers that
focus on pre-natal care, coordinated case management, and high-risk
pregnancies and deliveries. Tele-fetal monitoring could provide backup
specialty coverage and support for some networks. In comparison to a
single facility, a regional network of obstetrical care could have more
success in recruitment and retention of OB-GYN physicians and nurses
and in bearing the high liability costs for rural family practice
physicians (for example, Federally Qualified Health Centers provide
liability to their providers through the Federal Tort Claims Act or
FTCA).
Recommendation: Explore the feasibility of regional networks of
obstetrical care.
The University of Minnesota Rural Health Research Center is a
leader in this area of research. Recent publications related to your
questions include:
http://rhrc.umn.edu/2018/03/association-between-loss-of-hospital-
based-obstetric-services-and-birth-outcomes-in-rural-counties-in-the-
united-states/.
http://rhrc.umn.edu/2017/09/access-to-obstetric-services-in-rural-
counties-still-declining-with-9-percent-losing-services-2004-14/.
http://rhrc.umn.edu/2017/04/state-variability-in-access-to-
hospital-based-obstetric-services-in-rural-u-s-counties/.
http://rhrc.umn.edu/2017/04/closure-of-hospital-ob-services/.
______
Question Submitted by Hon. Debbie Stabenow
and Hon. Benjamin L. Cardin
dental care
Question. Lack of oral health care is a significant public health
problem in the United States. Significant health professional shortages
and lack of access to dentistry impacts rural and underserved
communities disproportionately. We know that our seniors are negatively
impacted by the lack of a dental benefit in Medicare. We also know that
children, families and people with disabilities who rely on Medicaid
and CHIP, programs which offer coverage for pediatric dental care and
sometimes care for adults, often struggle to find providers to see
them. Nowhere is the need for comprehensive dental coverage and access
to providers more profound than in our rural and underserved
communities. We have an opportunity to address the needs of our rural
and underserved communities by improving our health care system by
incorporating dental care more holistically through better coverage in
Medicare, Medicaid and CHIP, utilizing telemedicine, and assessing
provider and workforce gaps that can and should be filled in these
communities. Dr. Pink, what is the most important thing that we, as the
Senate Finance Committee, can do to improve dental care and coverage
for people living in rural and underserved communities?
Answer. The Senators' question very effectively summarizes the
challenges rural and underserved communities face as they seek to
improve their population's oral health. The inclusion of dental
benefits in Medicare and creating incentives for all States to expand
Medicaid dental coverage for adults would have the potential for making
the greaLest impact on the oral health of rural communities, which have
higher rates of poverty and relatively larger numbers of the elderly.
Additionally, providing reimbursement through public benefit programs
(Medicare, Medicaid and CHIP) to a diverse, interdisciplinary work
force, practicing at the top of their scope of practice in a patient-
centered model, would help to address worliforce shortages and improve
quality and oral health outcomes.
______
Prepared Statement of Susan K. Thompson, M.S., B.S.N., R.N., Senior
Vice President, Integration and Optimization, UnityPoint Health; and
Chief Executive Officer, UnityPoint Accountable Care
Chairman Hatch, Ranking Member Wyden, and honorable members of the
committee, on behalf of UnityPoint Health and UnityPoint Accountable
Care, thank you for the opportunity to submit written testimony as a
supplement to the oral testimony provided on May 24, 2018 at the
``Rural Health Care in America: Challenges and Opportunities'' hearing.
By way of background, I am pleased to submit the following comments to
further illustrate health-care challenges experienced in rural Iowa,
along with greater detail regarding potential solutions highlighted in
my oral testimony.
background
UNITYPOINT HEALTH
UnityPoint Health' is one of the Nation's most
integrated health systems. Through relationships with more than 280
physician clinics 280 physician clinics, 38 hospitals in metropolitan
and rural communities and home care services throughout its 9 regions,
UnityPoint Health provides care throughout Iowa, western Illinois and
southern Wisconsin.
UnityPoint Health entities employ more than 30,000 physicians,
providers, clinicians and staff. Each year, through more than 5.4
million patient visits, UnityPoint Health, UnityPoint Clinic and
UnityPoint at Home provide a full range of coordinated care to patients
and families. With projected annual revenues of $4.08 billion,
UnityPoint Health is the Nation's 13th largest nonprofit health system
and the fourth largest nondenominational health system in America.
UNITYPOINT ACCOUNTABLE CARE
Iowa Health Accountable Care, L.C., doing business as UnityPoint
Accountable Care, L.C., is an Iowa limited liability company that
brings together a diverse group of health-care providers, including
hospitals, physicians, and home health entities. As part of UnityPoint
Health, UnityPoint Accountable Care is one of the largest Accountable
Care Organizations (ACO) in the Nation, with a growing network
including 47 hospitals and more than 7,750 Iowa, Illinois, Wisconsin
and Missouri physicians and providers and more than 85 skilled nursing
facilities. In 2017, UnityPoint Accountable Care provider networks
provided care for more than 200,000 lives in governmental and
commercial insurance value-based arrangements. UnityPoint Accountable
Care is one of the largest participants in the Centers for Medicare and
Medicaid Services' (CMS) Next Generation ACO Model and is a leader in
industry transformation.
In my oral testimony before the committee, I referenced the
experiences of UnityPoint Health-Trinity Regional Medical Center (TRMC)
in Fort Dodge, IA, and those of the five Critical Access Hospitals
(CAH) it partners with in the UnityPoint Health-Fort Dodge region--both
in regard to designations under rural payment rules and TRMC's
participation as the Trinity Pioneer ACO--are responsible for the total
cost of care of attributed Medicare beneficiaries.
UNITYPOINT HEALTH--FORT DODGE (TRINITY HEALTH SYSTEMS)
Trinity Health Systems, also known as the UnityPoint Health--Fort
Dodge region, covers an eight-county area in North Central Iowa with a
population of approximately 137,000. The region includes 27 primary and
specialty care clinics, home care services, a Community Mental Health
Center and its flagship hospital, TRMC. In addition, the region
includes partnerships with five ``affiliate'' CAHs.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
UNITYPOINT HEALTH--TRINITY REGIONAL MEDICAL CENTER
TRMC, located in Fort Dodge, IA, is a licensed, non-profit
hospital. In addition, TRMC is a safety-net hospital, designated by the
CMS as a sole community hospital and a rural referral center. Most
recently, TRMC converted from a Prospective Payment System (PPS)
hospital to a ``tweener'' status hospital by reducing its inpatient
beds to below 50. This conversion allowed TRMC to become eligible to
participate in the CMS Rural Demonstration Program for the year
2018.\1\
---------------------------------------------------------------------------
\1\ Centers for Medicare and Medicaid Services. (2017, April 17).
Rural Community Hospital Demonstration [Press release]. https://
www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-
items/2017-04-17.html.
TRMC employs over 1,000 health-care professionals, technicians, and
individuals with a medical staff of approximately 90 providers. In
2016, TRMC served 3,460 patients, with 51.9 percent having Medicare as
a primary payor.
CRITICAL ACCESS HOSPITAL PARTNERS
As referenced above, TRMC provides management services to five CAHs
in its eight-county service area. These hospitals include Buena Vista
Regional Medical Center (Storm Lake, IA); Humboldt County Memorial
Hospital (Humboldt, IA); Loring Hospital (Sac City, IA); Pocahontas
Community Hospital (Pocahontas, IA); and Stewart Memorial Community
Hospital (Lake City, IA). With a common electronic health record (EHR)
platform shared between these entities, the CAHs serve as important
extensions of the region's care continuum.
TRINITY PIONEER ACO
In 2011, several health-care entities, including TRMC and Trimark
Physicians Group (now part of UnityPoint Clinic, the primary and
specialty care arm of UnityPoint Health), came together to create the
Trinity Pioneer ACO. Originally 1 of 32 planned organizations using the
Center for Medicare and Medicaid Innovation Center's (CMS Innovation
Center) Pioneer ACO Model, its success took it to the final stages,
positioning it as one of the final 19 Pioneer ACOs. It is important to
note that the five CAHs referenced in the previous section provide care
to some of the Medicare beneficiaries attributed to the Trinity Pioneer
ACO; however, the hospitals themselves were not participating entities
in the ACO.
Despite the small size of TRMC, the hospital and its region have
been an early adopter of value-based service delivery. As a CMS Pioneer
ACO Model participant, TRMC wholeheartedly embraced delivery system
reform efforts to move from service volume to population value. This
entails a shift in investment away from inpatient care towards
preventive and primary care with an emphasis on greater access to care
in outpatient settings. The Trinity Pioneer ACO was able to produce two
years of savings under the model while demonstrating strong performance
in quality and patient experience,\2\,\3\ all of which
earned national recognition from the U.S. Department of Health and
Human Services (HHS), including an onsite visit from then HHS Secretary
Sylvia Burwell, who commented that, ``I'm here today to visit one of
the great models of people accelerating change that the rest of the
Nation needs to do.''\4\
---------------------------------------------------------------------------
\2\ Pioneer ACO Model Performance Year 3 (2014) Quality and
Financial Results. https://innovation.cms.gov/Files/x/pioneeraco-fncl-
py3.pdf.
\3\ ``Evaluation of CMMI Accountable Care Organization Initiatives:
Pioneer ACO Evaluation Findings From Performance Years One and Two.''
March 10, 2015. (2015, March 10). https://innovation.cms.gov/Files/
reports/PioneerACOEvalRpt2.pdf
\4\ ``Burwell Touts UnityPoint Health ACO'' (2016, July 15). The
Messenger. http://www.messengernews.net/news/local-news/2016/07/
burwell-touts-unitypoint-health-aco/
Due in part to its success in the Pioneer ACO Model, the Trinity
Pioneer ACO has since migrated to the CMS Innovation Center's Next
Generation ACO Model under UnityPoint Accountable Care. Participation
in this model makes many of the UnityPoint Health--Fort Dodge region's
physicians and providers eligible for Advanced Alternative Payment
Model (AAPM) status under the Medicare Access and CHIP Reauthorization
Act of 2015 (MACRA).
THE DICHOTOMY CREATED BY OPPOSITE INCENTIVES FOR PROVIDERS IN RURAL
MARKETS IS A CHALLENGE
It is through this work that the challenges facing rural
communities, hospitals and providers have become so palpably clear to
us. While the success of the Trinity Pioneer ACO came by meeting
quality metrics and lowering the total cost of care, its CAH partners
were then and are still operating under a cost-based reimbursement
model. The CAH designation is designed to reduce the financial
vulnerability of rural hospitals and improve access to care by keeping
services in rural communities. To accomplish this goal, CAHs receive
certain benefits, such as cost-based reimbursement for Medicare
services. Through this model, CMS reimburses CAHs for their
``allowable'' costs; that is, costs that CMS deems core to the business
of operating a hospital.\5\ This cost-based reimbursement model creates
a different and often contradictory incentive to that which is in place
under value-based models, including the Pioneer ACO and Next Generation
ACO Models, among others.
---------------------------------------------------------------------------
\5\ Critical Access Hospitals Payment System. (2017, October).
http://medpac.gov/docs/default-source/payment-basics/
medpac_payment_basics_17_cah_final09a311adfa9c665e80adff0000
9edf9c.pdf?sfvrsn=0.
This dichotomy that exists between those who operate under total
cost of care programs like ACOs, Medicare Advantage (MA) plans and
bundled payments, and their rural CAH counterparts, who operate under a
cost-based reimbursement model is not optimal. The population health
movement, and more generally the movement to managed care in both the
Medicare and Medicaid programs, and further encouraged by the construct
of MACRA have left rural providers behind. Policy must be adjusted to
encourage our rural partners to engage more deeply in value-based
models, of which are outlined in the sections below.
access to health-care services continues to be a
significant challenge for rural communities
The second challenge highlighted in my oral testimony is the most
daunting: access to health-care services in rural areas. Bringing
quality care to rural Americans comes at a cost. The cost is distinct
from the actual provision of the medical service. These additional,
unique costs relate to the time and distance from major service
centers, lack of comprehensive community services, and health-care
workforce dead zones.
POTENTIAL SOLUTIONS FOR THE CHALLENGES IDENTIFIED
i. redesign rural reimbursement in a manner which divides
the medical spend from the cost of providing access
We propose payment for health-care delivery services in rural areas
include a value-based component tied to quality medical outcomes and
expenditures, and that a separate and distinct payment structure is
developed for the portion of cost-based reimbursement that pays for the
costs associated with access in rural areas.
In Iowa, 82 of our 117 hospitals are identified as CAH.\6\ Given
the geographic density of these rural health-care entities, there is
potential to develop and implement a new rural health-care delivery
model that evaluates a cluster of hospitals in a defined geographic
area of the State (for example, CAHs in a 30-mile area or a defined
number of counties) that focus on select areas of care. Or, if these
hospitals, in order to retain their cost-based structure, develop local
integrated delivery systems that would then be aligned to an AAPM.
These local delivery systems would be required to include either a
minimum percentage or a defined number of aligned lives of the AAPM. As
part of the local integrated delivery system, the CAHs would be
required to offer a defined set of services, such as extended hours for
primary care and mental health services (either face-to-face or through
telehealth), 24/7 emergency department care and immediate connections
to community-based social services that can address the needs of
patients such as transportation, housing or food insecurity, among
others. If these minimum criteria are met, the participating CAHs in
the local integrated delivery system would keep their cost-based
reimbursement. If CAHs unable to demonstrate success in the model,
policy for modifying the cost-based reimbursement might be considered.
---------------------------------------------------------------------------
\6\ Rural Health for Iowa Introduction--Rural Health Information
Hub. https://www.rural
healthinfo.org/states/iowa.
---------------------------------------------------------------------------
Policy Recommendations:
1. Design ACO benchmarks to accommodate for the additional cost of
bringing access to rural markets.
2. Access to care payments should be left out of ACO benchmark
calculations.
3. While access to care payments between rural and urban centers
need to differ, rural providers need to be held to the same quality of
care standards as urban providers for areas within their scope of
expertise.
ii. create rural designations that are meaningful
to modern day rural america
Policy Recommendation: Congress should create new designations for
Rural Emergency Rooms and Rural Access Centers. Specifically:
Rural hospitals should be redefined in to specified
categories based on average daily census. An example
categorization could define the hospitals as: (1) Small Rural
(average daily census of five or fewer patients); (2) Rural
(average daily census of six to 25 patients); and (3)
``Tweener'' (average daily census of 26 to 49 patients).
``Small Rural'' hospitals would receive cost-
based reimbursement for outpatient services in exchange for
discontinuing acute inpatient services while maintaining 24/7
emergency department services.
``Rural'' hospitals would continue to receive
cost-based reimbursement if they are participating in an ACO,
MA plan, or other value-based model that includes a component
of downside risk.
``Tweener'' hospitals would receive
``permanent,'' ongoing cost-based reimbursement for inpatient
services if they are participating in an ACO, MA plan, or other
value-based model that includes downside risk. In turn, these
tweener hospitals should become a rural health ``aggregator,''
serving as a convener by which the populations served by the
tweener and local ``Small Rural'' and ``Rural'' hospitals
patient populations could form a rural ACO or other value-based
arrangement.
Support bills like the Rural Emergency Acute Care Hospital (REACH)
Act \7\ that allow rural hospitals to transition to new designations
designed to meet modern needs. The Act would allow CAHs and PPS
hospitals with 50 or fewer beds to convert to Rural Emergency Hospitals
and continue providing necessary emergency and observation services.
Rural Emergency Hospitals would receive enhanced reimbursement rates of
110 percent of reasonable costs, and enhanced reimbursement for the
transportation of patients to acute care hospitals in neighboring
communities.
---------------------------------------------------------------------------
\7\ Rural Emergency Acute Care Act, S. 1130, 115th Cong. (2017-
2018). https://www.
congress.gov/bill/115th-congress/senate-bill/1130/
text?q=%7B%22search%22%3A%5B%22
%5C%22Rural+Emergency+Acute+Care+Hospital+Act%5C%22%22%5D%7D&r=1.
---------------------------------------------------------------------------
iii. adjust the medicare advantage program to tie rural
health regions into population health resources
Policy Recommendation: Encourage the CMS Innovation Center to
develop pilots that test MA programs designed to work in rural markets
like Iowa. We see great potential for MA to bring the benefits of
population health methods to rural areas.
An MA/ACO Hybrid Model could leverage the successes of and lessons
learned from high-performing, two-sided risk Medicare ACOs to shift
from volume-based payments to a model designed to promote the delivery
of higher quality care to rural Medicare beneficiaries. The underlying
shared savings model for ACOs is not sustainable and ACO reimbursement
still relies on a Fee-For-Service foundation. Although the MA Model has
been increasing its national market penetration, regional market
penetration varies significantly and rural States have been slow
adopters due in part to stringent network adequacy rules and Medigap
plans that perpetuate Traditional Medicare.
Models submitted to the CMS Innovation Center that facilitate rural
enrollment into MA Organizations (with integrated provider partners)
and give regulatory flexibility to integrate clinically-nuanced ACO
approaches into their benefit design, should be tested. It may be upon
the chassis of MA plans that rural markets have the ability to tap into
additional workforce, population health resource and connection to
specialty care.
iv. fully utilize telehealth as an extender of in-person visits
Policy Recommendation: Congress has recently dramatically increased
the telehealth services that are available through the Medicare
program. We are appreciative of this movement, and encourage Congress
to continue the loosening of restrictions surrounding when telehealth
services are covered by the program.
v. freestanding ambulatory surgery centers
are threatening rural health care
Medicare covers surgical procedures provided in freestanding or
hospital-operated ambulatory surgical centers (ASC). ASCs are distinct
facilities that furnish ambulatory surgery; the most common procedures
in 2015 were cataract removal with lens insertion, upper
gastrointestinal endoscopy, colonoscopy, and nerve procedures.
According to preliminary estimates from the CMS, Medicare payments to
ASCs were $4.4 billion in 2016, including both program spending and
beneficiary cost sharing.
With recent reports that routine surgeries performed outside of
hospitals in ASCs have led to 260 deaths since 2013, continued concerns
about the lack of connection between ASCs and hospitals exist. As part
of a national study on ASCs, Kaiser Health News and USA Today found
that, while Medicare requires ASCs to have processes in place with
local hospitals in the event that emergencies arise, the geographic
location between a rural ASC and the nearest hospital can have fatal
impact on patients in need of emergent post-surgical care provided in
the rural ASC setting.\8\
---------------------------------------------------------------------------
\8\ Jewett, C., Alesia, M., and USA Today Network. (2018, April
24). ``As Surgery Centers Boom, Patients Are Paying With Their Lives.''
https://khn.org/news/medicare-certified-surgery-centers-are-expanding-
but-deaths-question-safety/https://khn.org/news/medicare-certified-
surgery-centers-are-expanding-but-deaths-question-safety/.
In January 2008, Medicare began paying for facility services
provided in ASCs-- such as nursing, recovery care, anesthetics, drugs,
and other supplies--using a new payment system that is primarily linked
to the Hospital Outpatient Prospective Payment System (OPPS). Under the
OPPS, Medicare pays for the related physician services--surgery and
anesthesia--under the physician fee schedule. Like the OPPS, the ASC
payment system sets payments for procedures using a set of relative
weights, a conversion factor (or base payment amount), and adjustments
for geographic differences in input prices. Beneficiaries are
---------------------------------------------------------------------------
responsible for paying 20 percent of the ASC payment rate.
Policy Recommendation: Prohibit freestanding ASCs from establishing
residence in rural markets.
in closing
Health-care entities are the backbone of our many of our rural
communities. They care for their residents from birth to death and
should remain the resource for health-care emergencies, connection to a
broader array of health-care services, and wellness epicenters. We need
our rural health-care delivery systems to be viable and we need them to
make the transition to the rural health access centers we know they can
become.
Thank you for the opportunity to share these views.
______
Questions Submitted for the Record to Susan K. Thompson, M.S., B.S.N.,
R.N.
Questions Submitted by Hon. Orrin G. Hatch
Question. As one of a very small number of Next Generation ACO
participants located in a rural market, how have you been successful in
getting your attributed Medicare patients to stay within your ACO
network? Because UnityPoint seems to be an outlier success story in
this regard, can you please talk a little bit more about how your
organization has been able to thrive in an advanced ACO program while
other rural providers struggle to participate even in the non-risk
bearing Track One payment structure?
Answer. A key to maintaining attribution was learned from our
participation in the Center for Medicare and Medicaid Innovation
Center's (CMS Innovation Center) Pioneer ACO Model-beneficiaries will
stay where they have a reliable and personal relationship with their
primary care provider. We attribute our success in large part to
creating a provider culture. To drive and support their patients within
a network or system of organized care, providers must understand the
role of the ACO and find value (e.g., access, communication,
consistency) for their patients. Our Trinity Pioneer ACO intensively
outreached to providers for a year ahead of ACO participation.
Yet even with this success in provider outreach, beneficiary
``stickiness'' is a continuing challenge as our attributed
beneficiaries still receive greater than 40 percent of their care from
providers outside our ACO. This margin is due to unlimited beneficiary
choice within the Medicare program. As structured, there is little
incentive for beneficiaries to consider cost or quality when selecting
a provider. While the Next Generation ACO is testing benefit
enhancements, such as discounted co-pays, to encourage beneficiaries to
stay within the ACO for services, these efforts are still being tested
but do not appear to completely address this challenge.
In terms of our success, program features that have been helpful
include prospective attribution, sheer cohort size and ACO composition.
Simply knowing the beneficiaries that an ACO is accountable for in
advance within the Pioneer ACO Model and Next Generation ACO programs
has enabled us to target interventions to improve the health of those
with specific needs. We have been able to deploy predictive analytics
and decision support tools to identify individuals with high and rising
risks and effectively manage care. Retrospective attribution, common in
most Medicare Shared Savings Program (MSSP) contracts, is subject to
beneficiary churn on a quarterly basis \1\ and creates a moving target
for population health initiatives. By combining our Medicare ACO
programs, we were able to spread downside risk across a large cohort of
attributed lives. Without sufficient size,\2\ rural providers are
exposed to uncertain financial risk--as the number of attributed lives
grows, the random variation in financial results increasingly
stabilizes. Our providers were also more willing to participate because
tertiary hospitals were ACO Participants, providing an anchor for
services and infrastructure and a large-scale partner to share in risk.
For operational features that contributed to our success, we would
refer you to the response to Senator Wyden in regards to ``Rural
ACOs.''
---------------------------------------------------------------------------
\1\ Under the UnityPoint Accountable Care MSSP program, our churn
rate was as high as 25 percent per quarter. It was common for a patient
attributed in Q1, to lose attribution in Q2 and then to be attributed
back in Q3.
\2\ The roughly 400 ACOs with fewer than 20,000 lives routinely
experience savings and losses of 10 percent to 20 percent simply due to
statistical variation in health-care spending. Barr, L, Loengard, A.,
Hastings, L., and Gronniger, T. ``Payment Reform in Transition-Scaling
ACOs for Success,'' Health Affairs Blog, May 11, 2018. Accessed at
https://www.healthaffairs.org/do/10.1377/hblog20180507.812014/full/.
We agree that many rural providers struggle to make the leap to
value. Current AAPM model design has not targeted rural providers, and
current models have uncertain advantages, require infrastructure
investments, and have changing participation rules. Even though
UnityPoint Health is a seasoned early adopter, when we look to the
future, it is uncertain--the Next Generation ACO is a CMS Innovation
Center demonstration and will eventually sunset. In exploring options
for our rural health-care network, a preferred solution seems to blend
ACO provider-driven programming with the payment stability of Medicare
Advantage (MA). This blended ACO-MA model also appears to address many
of the barriers to AAPMs for rural providers with the added benefit
---------------------------------------------------------------------------
that it removes the Federal Government from health-care administration.
Question. Can you ever perceive of a time in the future where ACOs
located and operating in rural and frontier parts of the country will
be able to take on two-sided risk?
Answer. We believe this is possible with the right model and
appropriate size. The current shared savings model is predicated on an
urban design, and rural providers are not measured on par with their
urban counterparts for the same amount of clinical and care management
effort. While traditional ACOs in their current form may not provide
appropriate vehicles for rural providers with limited scale, provider-
sponsored Medicare Advantage plans with broad geographic reach could
provide a more viable model. In addition, rural reimbursement is often
different than urban reimbursement and needs to be considered in model
design to ensure financial incentives are appropriately aligned on the
journey to value.
______
Questions Submitted by Hon. Michael B. Enzi
Question. In your testimony, you proposed a ``separate and distinct
payment structure [be] developed for the portion of cost-based
reimbursement that pays for the costs associated with access in rural
areas.'' Please provide a copy of this proposal or specific outline
that explains your views on what costs are associated with access in
rural areas, haw such casts should be reimbursed, and what criteria
rural hospitals should have to meet in order to participate in such a
payment system.
Answer. Ultimately, there needs to be a balance between
incentivizing rural providers to reduce the overall cost of care,
investing in healthcare resources needed to improve quality in extreme
rural areas and providing satisfactory access to Medicare beneficiaries
in rural geographies. This concept of a separate ``cost of access'' has
been percolating since our participation in the Pioneer ACO Model to
address regional population health initiatives involving a multi-county
service area that encompassed a sole community hospital and five
Critical Access Hospitals (CAHs). At issue was that approximately 65%
of Medicare beneficiaries attributed to the Trinity Pioneer ACO lived
in communities served by cost-based CAHs. The rewards for cost-based
reimbursement were, and still are, firmly rooted in inpatient versus
ambulatory and community-based costs. While the ACO or other regional
delivery system could lower utilization/cost of care in an individual
CAH, its interim rates under the cost-reimbursement structure simply
readjusted the following year to correct for the lower volume, and
subsequently Medicare reimbursed more on a ``per day'' basis. Over
time, CAHs always received their costs. In addition, the CAH
reimbursement created a disincentive for other cost-saving measures;
for instance, many transitional services fall outside allowable CAH
reimbursement calculations. The CAH reimbursement structure was, and
is, generally at odds with value-based care. By separating the ``cost
of access'' from the ``cost of care,'' reimbursement incentives and
high-value care can be aligned in rural areas.
The ``cost of care'' concept is the equivalent of traditional
medical care and could be reimbursed through Medicare Fee-For-Service
rate schedules. Like all health-care facilities, small/rural hospitals
should be held accountable for reducing the cost of care while
maintaining quality standards. A value-based payment program could be
implemented for cost of care services with the potential to be rewarded
through a shared savings or other quality program. ``Cost of access''
refers to services that maintain/improve access for beneficiaries in
rural areas that are proven to lower the total cost of care. These
items should be encouraged. Examples of access costs include care
coordination teams, palliative care, telehealth, homecare, hospice,
eVisits, and urgent care clinics. These cost items could be reimbursed
using an incremental rate founded on cost-based reimbursement and
proposed adjustments could be made via cost reports or similar
mechanisms. We acknowledge that actuarial modeling would need to occur
to offer greater formula/adjustment details.
As envisioned, an add-on earned for rural access could be applied
to any value-based program. It would allow rural providers and
facilities to participate in value-based programs for their ``cost of
care'' component while still receiving proportional cost-based
reimbursement to promote ``cost of access'' infrastructure.
Question. Medicare's Sole Community Hospital designation is
important to many Wyoming hospitals, but to qualify, a potential sole
community hospital must be located 35 miles away from the nearest
hospital in most cases, with the exclusion of Critical Access
Hospitals. How does excluding Critical Access Hospitals from the
geographic limit affect how the sole community hospital designation is
targeted?
Answer. The Sole Community Hospital (SCH) designation and its
reimbursement structure bolster the fragile margins of these hospitals.
In comparison to SCHs, CAHs are not ``like hospitals'' and offer
markedly different services per their Conditions of Participation. In
Iowa, there are seven SCHs, including two associated with UnityPoint
Health. lf the SCH 35-mile geographic limit were revised to include
CAHs, this change would effectively remove all Iowa hospitals from
receiving a SCH designation. Instead of a change in mileage criteria,
Congress must create incentives that encourage regional care
coordination, access and delivery to strengthen the collective ability
of health-care providers and facilities to meet the needs of their
rural communities.
______
Question Submitted by Hon. Ron Portman
and Hon. Michael F. Bennet
Question. We have previously introduced legislation to encourage
providers to participate in alternative payment models and facilitate
care coordination, including the Medicare PLUS Act (S. 2498 in the
114th Congress) and the Medicare Care Coordination Improvement Act (S.
2051 in the 115th Congress). When we consider coordinating care for
patients in rural settings, what administrative burdens do you face?
What can Congress do to ensure that value-based care is effective in
rural areas?
Answer. Thank you for introducing these pieces of legislation.
UnityPoint Health has previously suggested Stark Law exceptions and
Anti-Kickback Statute safe harbor provisions for providers
participating in value-based payment network arrangements. As Advanced
Alternative Payment Models (AAPMs) are developed, each requires a
separate analysis and raises individual compliance concerns. For an
industry that is generally risk adverse, this creates further
hesitation to innovate and move from volume to value payments. To
promote further adoption of risk-bearing models, Stark Law exceptions
and/or Anti-Kickback Statute safe harbor provisions would be an
appreciated first step. In addition, UnityPoint Health has also
suggested that Medicare Advantage models be accepted as an AAPM under
the Quality Payment Program. Participation in MA models should be
considered under the Medicare-only participation threshold without the
need for a separate determination under the All-Payer participation
threshold. With participation thresholds set to increase in both 2019
and 2021, the ability to count MA models towards both revenue and
patient count thresholds without the paperwork submissions required
under the All-Payer Determination would encourage continued movement to
value.
In addition, the present payment structure for health-care delivery
services in rural areas does not incentivize the movement from volume
to value. We would suggest a redesign of rural reimbursement in a
manner which divides the medical spend from the cost of providing
access. A value-based component could then be tied to quality medical
outcomes and expenditures, and a separate and distinct payment
structure could be developed for the portion of cost-based
reimbursement that pays for the costs associated with access in rural
areas.
______
Questions Submitted by Hon. Ron Wyden
rural workforce
Question. As discussed during the hearing, the shortage of primary
and specialty care providers is a critical issue facing rural
communities across the country. In Oregon, 25.9 percent of residents
live in a health professional shortage area. Difficulty recruiting and
retaining physicians and other members of the care team can result in
longer patient wait times and reduced access to care far those living
in rural communities.
What concrete policy ideas would you suggest this committee pursue
to help attract more providers to rural America?
Answer. We would suggest this committee strengthen rural training
programs, permit top of licensure practice, and expand telehealth as
tool to reduce provider isolation.
While rewarding, rural practice is not a lifestyle that fits all,
and missteps in recruitment efforts are costly and disruptive to
patient continuity of care. This committee should focus efforts on
targeting students/employees that have a heightened affinity to rural
practice. My experience in rural Iowa has mirrored studies that show
that physicians who grow up in rural areas are more likely to pursue
careers there and further that medical students who graduate from rural
residency programs are more likely to practice in rural areas as
opposed to those who graduate from urban programs. Expansion of rural
residency programs, Area Health Education Centers in rural areas, or
other training programs located in rural settings would enhance
recruitment and retention in rural locales generally. Academic
institutions in rural areas or with targeted outreach to rural students
should likewise be incentivized.
Aside from physicians, shortages exist for other health-care
professionals. As detailed in the response to Senators Stabenow and
Cardin's question on dental care, workforce strategies should encompass
a comprehensive look at health care as a whole. One example is nursing,
another profession with shortages that would benefit from targeted
rural residency programs. As an integrated health system, UnityPoint
Health has nursing vacancies in acute care settings (covering all
departments), ambulatory settings and home health environments. A
residency that offered rotations in various care settings, not just
hospital departments, would enable nurses to test different settings
prior to making a career decision.
Provider shortages can be combated and rural recruitment assisted
by allowing providers and healthcare professionals to practice at top
of license. There are a number of Federal law and regulations which
supersede State licensure requirements. For example, Iowa, in addition
to several other States, allows for independent practice by an Advanced
Registered Nurse Practitioner (ARNP). Iowa hospitals, particularly CAHs
and those located in rural areas, have increasingly turned to advanced
practice providers for an onsite presence in providing services in
Emergency Departments. The Emergency Medical Treatment and Active labor
Act (EMTALA) permits emergency care to be provided by advanced practice
providers within the scope of the license as determined by the States;
however, the EMTALA statute and corresponding regulations supersede
State licensure with respect to certifying patient transfers. In
particular, EMTALA requires consultation between an ARNP and a doctor
of medicine or osteopathy to certify the transfer of a patient. This
consultation requirement must occur in every case regardless of ARNP
knowledge and experience. This requirement does not allow independent
practice, imposes an undue delay in providing care, and has financial
implications for hospitals that are already operating on tight margins.
We request that EMTALA be revised to allow certification of patient
transfers to follow State scope of practice laws.
Recruitment in rural areas is challenged by geographic silos and
the perception that a provider is alone. We would recommend the
acceleration of more robust investment opportunities in support of an
advanced telehealth infrastructure. Telehealth can be a powerful tool
to create a provider support community for consults and educational
opportunities.
rural beneficiary health needs
Question. Rural communities tend to be alder, sicker, and lower
income compared to their urban counterparts. When rural hospitals are
forced to close their doors, Medicare beneficiaries living in the
surrounding areas often have limited health-care options. The
prevalence of multiple chronic conditions among those living in rural
areas heightens the need to ensure all Medicare beneficiaries have
access to high-quality care--regardless of where they live.
In your view, where should this committee focus its efforts to
ensure that Medicare beneficiaries living in rural areas (especially
those with multiple chronic conditions) have access to high quality
care?
Answer. We agree that rural residents have a higher prevalence of
multiple chronic conditions. To address this, we encourage this
committee to focus its efforts on enabling rural residents to age in
place. Strategies that can improve quality of life for our seniors are
palliative care, leveraging community resources, use of telemedicine,
and quality post-acute alternatives. Please note that these supports
all fall within the suggested reimbursement category of ``cost of
access'' for rural facilities as described in our response to Senator
Enzi.
Palliative care--Palliative care is intended to increase the
ability of seriously ill patients to remain within their homes for as
long as they are comfortable. Palliative care is provided by an
interdisciplinary team (specialized physicians, nurses, social workers
and others, such as chaplains) and the team treats pain and other
symptoms; provides time intensive communication; supports complex
medical decision making; ensures practical, spiritual and psychological
support; and co-manages care across settings. While UnityPoint Health
has demonstrated that this team-based care reduces costs,\3\ Medicare
reimbursement structures provide limited support.
---------------------------------------------------------------------------
\3\ At UnityPoint Health, we conducted a longitudinal study to
estimate the financial impact of palliative care consults and
subsequent enrollment in the palliative care programs. Administrative
accounting and claim files were reviewed for 1,973 patients consulted
between October of 2011 and September of 2012. We analyzed the use and
cost of hospital service 6 months prior to the palliative care consult
and 6 months following the consult, for these same patients as they
were continuously monitored. It was found that there were 1,401 less
Emergency Department visits and hospitalizations (a 54-percent
decrease). This amounted to $4,312,458 savings in associated variable
direct cost in this acute setting (a 47-percent decrease).
Community resources--Many health issues are the result of or
exacerbated by other life circumstances. Care coordination is often a
challenge borne out of social determinants of health--lack of
transportation, limited food and pharmacy options, reduced funds for
medication, and low health literacy. Health-care professionals must
leverage its community agencies as appropriate to provide wrap-around
services, including public health, Area Agencies on Aging, community
action agencies, food pantries, schools, social service agencies,
mental health agencies, skilled nursing facilities, faith-based
organizations, and United Way agencies. As an example, the ``Stepping
On'' falls prevention programming is a recent collaboration with Area
Agency on Aging in Fort Dodge, IA. As part of this effort, our ACO
clinics offer falls assessments to retain older residents within their
homes. Although the resources and relative capacity of community
partners will vary among regions, when they are available, they should
be leveraged. The care coordination function is vital and should be
---------------------------------------------------------------------------
reimbursed and expanded by Medicare.
Telemedicine--Although addressed in other responses, telemedicine
is a tool that allows patients to remain in place--whether at a skilled
nursing facility and receiving a palliative care consult via a tablet,
whether at home with equipment to monitor a pace maker rhythm, whether
at the Emergency Department receiving a neurology consult, whether at
the community mental health center receiving a psychiatry visit, or at
home with a home health aide sending an image to a wound care
specialist. These services bring care to the patient, and reimbursement
policy should remove geographic and originating site restrictions.
Skilled Nursing Facility support--Our Medicare ACO has participated
in the SNF 3-day rule waiver. Beneficiaries, if medically appropriate,
may receive skilled nursing care and/or rehabilitative services at SNFs
without prior hospitalization or a 3-day inpatient admission. This
waiver requires that participating SNFs meet and maintain quality
standards and has resulted in heightened SNF collaboration. SNFs
participate in group shared learning meetings, develop shared
population health policies/goals for items such as avoidable
readmissions or Emergency Department visits, and collect data and
monitor progress. On an individual basis, outreach and training is
provided to SNF staff to increase/maintain competency. Outreach and
tools have included Adaptive Design (rapid cycle improvement), SBAR
(order and communication processes), INTERACT HI tools (care pathways),
and IPOST (advanced care conversations). This benefit enhancement has
resulted in cost avoidance, \4\ and these waivers should continue to be
available to providers engaged in value-based arrangements.
---------------------------------------------------------------------------
\4\ Trinity Pioneer ACO reduced average SNF length of stay by
almost a week.
Question. What Medicare policy changes would be most impactful in
---------------------------------------------------------------------------
the short term and long term?
Answer. In the short term, this committee should consider enhancing
claims data that are available to providers who engage in population
health initiatives.
For AAPM Participants, a more robust system should be instituted to
share Medicare claims data for attributed patients. This should include
an option to receive both raw claims-level data and claims summary
data. In addition, we would encourage HIPAA flexibility to facilitate
improved service delivery:
Access to substance abuse records by treating providers.
Permit sharing of patient medical information between
managed care plans and associated providers.
Permit sharing of patient medical information within a
clinically integrated care setting. HIPAA currently restricts
the sharing of a patient's medical information for ``health-
care operations.''
On a larger scale, we support the development of all-payer claims
databases that would collect information from all private and public
payers to promote transparency and increase the quality of health care
provided to the patients we serve. In this effort, we would encourage
Congress and CMS to take a lead role in creating data standardization
and governance rules for these databases with input and feedback from
stakeholders. As a multistate health-care organization, we cannot
overstate the importance of having a single standard across States,
instead of complying with one-off solutions in each State. When
treating complex patients, comprehensive information on disease
incidence, treatment costs and health outcomes is essential to inform
and evaluate population health initiatives, but it is not readily
available.
In the long term, we encourage this committee to address drug
pricing to reduce the total cost of care. The spiraling costs of price
of prescription drugs needs to be addressed by Congress to curtail
Medicare spending. We are encouraged by the recent Request for
Information from Health and Human Services on drug pricing, and would
comment that for many rural residents drug costs compete with meeting
other daily needs.
telehealth
Question. Building on the proven success of telehealth in the rural
setting, Congress passed the CHRONIC Care Act earlier this year, which
expanded access to telehealth in Medicare to allow individuals
receiving dialysis services at home to do their monthly check-ins with
their doctors via telehealth, to ensure individuals who may be having a
stroke receive the right treatment at the right time, to allow Medicare
Advantage plans to include additional telehealth services, and to give
certain ACOs more flexibility to provide telehealth services.
In your view, what, if any, Medicare payment barriers to adoption
and utilization of telehealth services remain in the rural setting
today?
Answer. Medicare payment is definitely a barrier to telehealth
adoption and utilization not only in rural areas but generally. The
first barrier relates to policy generally and the fear of over-
utilization of telehealth services for unnecessary services. This fear
persists despite tack of supporting evidence to demonstrate
overutilization. Due to this fear, telehealth law has been plagued by
burdensome documentation requirements, provider and site of care
limitations, and eligible service restrictions. We would suggest that
Congress empower two-sided risk AAPMs to fully test telehealth by
permitting reimbursement for these services without provider or site of
service restrictions. Two-sided risk AAPMs would have no incentive to
overutilize telehealth and presumably develop appropriate and
innovative use studies that promote high value (reducing cost while
maintaining quality).
The rural geographic limitation is in itself a barrier to wider
adoption in rural areas. Organizations and providers frequently focus
resources and efforts required to start a new telehealth service (e.g.,
technology, training and implementation of an electronic medical record
setup) in areas with greater numbers of patients. While it would seem
that urban areas would be ripe for telehealth, Medicare's rural
reimbursement policy has excluded the nearly eighty percent of Medicare
beneficiaries that live in a Metropolitan Statistical Area. As a
result, the market is dissuaded from implementing telehealth solutions
generally due to relatively small percentage of the population eligible
for reimbursement. If the rural geographic restriction were eliminated,
it is likely that more health-care organizations, providers and
specialists would adopt and provide telehealth services, thus
increasing the availability of services to rural areas from the larger
pool of providers delivering services.
Question. To the extent that barriers remain, what Medicare policy
changes would you suggest the committee consider to address them?
Answer. State licensure is a significant barrier to telehealth
delivery. Similar to the recent Department of Veteran's Administration
rule, we would request that licensed health-care providers be
authorized to treat beneficiaries through telehealth irrespective of
the State, or of the location in a State, of the health-care provider
or the beneficiary. This would not expand the scope of practice for
health-care providers beyond what is statutorily defined in the laws
and practice acts of the health-care provider's State of licensure,
including and restrictions regarding the provider's authority to
prescribe and administer controlled substances. We would call out the
VA's rationale that ``Just as it is critical to ensure there are
qualified health-care providers onsite at all VA medical facilities, VA
must ensure that all beneficiaries, specifically including
beneficiaries in remote, rural, or medically underserved areas, have
the greatest possible access to mental health care, specialty care, and
general clinical care.'' \5\ The same need applies to rural residents
universally, regardless of veteran status.
---------------------------------------------------------------------------
\5\ ``Authority of Health Care Providers to Practice Telehealth,''
Federal Register, Vol. 83, No. 92, Friday, May 11, 2018, https://
www.federalregister.gov/documents/2018/05/11/2018-10114/authority-of-
health-care-providers-to-practice-telehealth.
Additionally, we would recommend that arrangements for two-sided
risk AAPMs be provided operational flexibility. For instance,
UnityPoint Accountable Care is currently participating in the Next
Generation ACO and, through a benefit enhancement, has the ability to
receive reimbursement for services provided through telehealth in urban
areas and to patients in their homes. While the telehealth benefit
enhancement has allowed additional case uses, it is limited to
providers on our Next Generation ACO ``Preferred Provider'' list. Since
telehealth leverages providers from multiple geographic areas and
sometimes other States, many of the providers delivering care through
telehealth belong to a different ACO and therefore we are unable to
leverage these telehealth services. Additionally, it is
administratively burdensome to match the provider and beneficiary
before the visit (to confirm coverage) and then confirming the visit
occurred as scheduled. Utilization of the telehealth benefit
enhancement would increase and enable a better demonstration of its
potential by lifting requirements for a preferred provider list and
matching of providers to beneficiaries.
rural acos
Question. Aligning a fragmented delivery system can be particularly
challenging in rural areas, where there is often a shortage of health
care professionals, limited financial capital available, and a patient
population composed of older and sicker patients. Although several
rural Accountable Care Organizations (ACOs) have records of success,
many rural providers still find the prospect of joining an ACO
daunting. Creating opportunities for rural providers to participate in
value-based payment models, such as ACOs, is critical to transitioning
to a health care system that rewards value instead of simply volume of
services provided.
What characteristics have allowed some rural ACOs to succeed?
Answer. The ACO model was initially established as a provider-
driven solution to bridge the fragmented delivery system. We would like
to take this opportunity to share characteristics from our Trinity
Pioneer ACO, the most rural of the Pioneer Participants, which enabled
our success and allowed us to achieve two years of savings over the
course of our three-year contract.
Hub medical practice with a strong relationship
with a local hospital. In our case, the medical practice had a
strong primary care presence, although the practice was multi-
specialty. The relationship between the ambulatory and acute
care settings does not have to be an ownership relationship,
but location proximity is important. Some of our clinics are
actually co-located on the hospital site.
Structure for providers. This references the
existence of a broader physician community. The governance and
committee structure facilitated provider engagement in the ACO
model and monitored progress and areas of opportunity.
Responsibility for all aspects of care. There was
engagement in all settings of care across the continuum--
inpatient, outpatient, home health, behavioral health and
skilled nursing facilities. Silos of care were broken down to
provide holistic services.
Services coming to patients, unless medically
indicated. For an elderly population with multiple chronic
conditions, services were largely provided locally when
possible. For the most part, transportation was not a barrier,
as specialty care and tests were mainly provided at the medical
hub and hospital.
Well-defined tertiary hospital in the ACO with
``skin in the game.'' Since inpatient care is often the most
expensive service, hospitals that do not share an accountable
role can easily negate otherwise high-value care through longer
lengths of stay and/or additional tests. For the Trinity
Pioneer ACO, Trinity Regional Medical Center served as the
program Participant with primary responsibility for shared
losses and savings. This hospital is a sole community hospital
and rural referral center and has management arrangements with
five area CAHs within an eight-county service area.
Palliative care. This type of care is focused on
providing patients with relief from the symptoms, pain and
stress of a serious illness--whatever the diagnosis--and can be
provided in conjunction with curative treatment. Overall, this
service prioritizes patient goals of care and quality of life
issues and resulted in reduced emergency department visits,
readmission rates and lengths of stay. The Trinity Regional
Medical Center was an early adopter of this service line and
its role was greatly expanded under the ACO.
Post-acute care. In recognition of the frequent
transitions of care to Skilled Nursing Facilities (SNFs) and
the ACO's 3-day waiver, the Trinity Pioneer ACO established a
post-acute preferred provider network. The network provided a
forum for shared learning and to disseminate training to
augment the confidence and skill level of SNF staff in caring
for medically needy patients. Participating SNFs were able to
maintain or increase quality scores, and communications with
acute care and ambulatory providers were enhanced.
Community consortiums. To keep patients in the
community and address social determinants of health, public
health and social services agencies were leveraged. For
instance, the public health agency provided certain
vaccinations and performed environmental assessments for bed
bug infestations.
Question. Are there certain ``lessons learned'' from these success
stories that may be helpful to rural providers interested in
participating in a rural ACO?
Answer. While the attributes of our very small rural ACO are listed
above, the lessons learned relate to our providers and their support
team who operationalized our accountable care experiment.
Outreach, outreach, and more outreach--Get out
well in advance of planned participation and build expectations
for the work ahead. Rural providers want to know what is in it
for the patient. While there will be learning along the way,
start the dialogue early. Since providers and the supporting
team will be on the front lines, they will be the best
advocates for the work. The more preparation time, the better
the comfort level with the work; however, once launched
outreach and communication must be ongoing and frequent. It is
important to keep the team apprised of progress as well as
opportunities for improvement.
Provider incentives need to be meaningful--Rural
providers do not have the patient volume to permit anything
other than going all in. Incentive packages need to be
straightforward and coupled with quality performance. If done
correctly, these incentives will serve as the platform to have
purposeful conversations about the anticipated work and
outcomes. Shared savings distribution should recognize
individual contribution at specific levels. To make the amount
meaningful, the Trinity Pioneer ACO banked all Medicare
incentive program monies into one pot for distribution in the
following year.
Electronic Health Record (EHR) use--If a common
EHR platform is not used, there must be a plan for sharing
medical records in real time. While an EHR investment is an
expense, it assists with timely care and drives population
health initiatives.
transition from volume to value
Question. The passage of the bipartisan Medicare Access and CHIP
Reauthorization Act of 2015 (MACRA) was a milestone in Congress's
efforts to repeal the flawed SGR and move our health care system from
one that rewards volume to one that rewards value. In many cases,
however, rural providers report that participating in value-based
payment models is a significant challenge for them, particularly when
it comes to taking on financial risk for patient health outcomes and
population health. In order to successfully transition our health care
system to one that rewards value, it is critical to ensure there are
meaningful opportunities for rural providers to participate in a value-
based payment system.
What barriers exist today that discourage rural providers from
participating in value-based payment models?
Answer. As mentioned in my oral and written testimony, the present
reimbursement structure does not encourage rural provider
participation. It is a hard sell to convince rural hospitals to forego
the security of cost-based reimbursement or a cost report adjustment to
accept a value-based arrangement. To engage rural America1 tailored
opportunities in the value space are needed. While UnltyPoint Health
has hospitals that are participating in the Rural Community Hospital
Demonstration program and we are encouraged by the Pennsylvania Rural
Health Model, these models are too few and the development of more
rural options should be accelerated. Suggestions for models are
provided in response to the question below.
For rural practitioners, CMS has expanded the exemption of rural
low-
volume providers from Merit-based Incentive Payment System (MIPS)
participation, even on a reporting-only basis. This expansion excuses
rural providers from transitioning to Rural Health Care in America:
Challenges and Opportunities value. Then should providers desire to
participate, current AAPM models are poor fits and providers often lack
EHR and analytic sophistication. Specifically, current AAPM models are
subject to uncertain and even arbitrary financial results when
attributed populations are small. This is compounded by the absence of
an overall hierarchy of AAPMs, making it unclear how these programs
overlap or interact. For instance, beneficiary attribution to episodic
care models should not trump attribution to overall population health
initiatives (like ACOs), which jeopardize already relatively small
attributed populations. In addition, rural providers often do not have
the financial up-front resources to make investments in needed
population health infrastructure for quality reporting, data sharing
and analysis.
Question. What, if any, Medicare policy changes would help ensure
that rural providers and communities are not left behind in the
transition to value-based payment?
Answer. Prior to suggesting policy for specific reimbursement
structures or incentives that could be explored to promote access and
value in rural areas, we would encourage Congress to use a wide lens.
This country cannot continue to promote siloed and isolated care.
Rather, we would urge Congress to promote regional health-care
solutions and incentives for larger collaboratives of health-care
providers to work collectively and become accountable for regional
communities. While sufficient population bases are necessary to deliver
value-based care consistently and in a sustainable manner, it is most
important to assure that care is delivered safely.
Among areas to explore for rural models, we would suggest:
Rural ACO model with different benchmarks for a smaller pool
of attributed lives as well as differentiated risk--medical
costs versus access costs.
Re-designation of rural hospitals into specified categories
based on average daily census. For instance:
``Small Rural'' hospitals (average daily
census of five or fewer patients) would receive cost-based
reimbursement for outpatient services in exchange for
discontinuing acute inpatient services while maintaining 24/7
emergency department services.
``Rural'' hospitals (average daily census of
six to 25 patients) would continue to receive cost-based
reimbursement if they are participating in an ACO, MA plan or
other value-based model that includes a component of downside
risk.
``Tweener'' hospitals (average daily census
of 26 to 49 patients) would receive ``permanent,'' ongoing
cost-based reimbursement for inpatient services if they are
participating in an ACO, MA plan or other value-based model
that includes downside risk. In turn, these tweener hospitals
should become a rural health ``aggregator,'' serving as a
convener by which the populations served by the tweener and
local ``Small Rural'' and ``Rural'' hospitals patient
populations could form a rural ACO or other value-based
arrangement.
Rural Emergency Departments/Centers: Support bills like the
Rural Emergency Acute Care Hospital (REACH) Act \6\ that allow
rural hospitals to transition to new designations designed to
meet modern needs.
---------------------------------------------------------------------------
\6\ Rural Emergency Acute Care Act, S. 1130, 115th Cong. (2017-
2018). https://www.
congress.gov/bill/1l5th-congress/senate-bill/1130/text?g-
%7B%22search%22%3A%5B%22
%5C%22Rural+Emergency+Acute+Care+Hospital+Act%SC%22%22%SD%7D&r=1.
Critical Access Hospital Excess Capacity Demonstration:
Allow a pilot to relax the 96-hour rule or other Condition of
Participation barriers to test innovative service delivery
models. For instance, using CAH beds as psychiatric beds in
---------------------------------------------------------------------------
mental health HPSA areas.
For rural providers, Congress could consider tax incentives as a
channel to address current participation barriers amongst providers and
reward those physicians whom have already transitioned to AAPM models.
Incentives could take form as tax-free retained earnings, retained by
the physician practices, which could exclusively be utilized as
infrastructure development and risk reserve offsets to assist in the
transition to an AAPM model. Distributed incentive earnings should not
be considered as a loan and should not require physicians to match
funds.
______
Questions Submitted by Hon. Debbie Stabenow
and Hon. Benjamin L. Cardin
dental care
Question. Lack of oral health care is a significant public health
problem in the United States. Significant health professional shortages
and lack of access to dentistry impacts rural and underserved
communities disproportionately. We know that our seniors are negatively
impacted by the lack of a dental benefit in Medicare. We also know that
children, families and people with disabilities who rely on Medicaid
and CHIP, programs which offer coverage for pediatric dental care and
sometimes care for adults, often struggle to find providers to see
them. Nowhere is the need for comprehensive dental coverage and access
to providers more profound than in our rural and underserved
communities. We have an opportunity to address the needs of our rural
and underserved communities by improving our health-care system by
incorporating dental care more holistically through better coverage in
Medicare, Medicaid, and CHIP, utilizing telemedicine, and assessing
provider and workforce gaps that can and should be filled in these
communities. What is the most important thing that we, as the Senate
Finance Committee, can do to improve dental core and coverage for
people living in rural and underserved communities?
Answer. As mentioned during my comments and responses to committee
members, we believe that Congress has opportunities to support
integrated care models and innovative programs that offer patients
access to physical, behavioral, and social health care. Specific to
improvement of dental care and coverage for our fellow Americans living
in rural and underserved communities, integrating oral health care into
primary care is the first priority. This integration increases access
to and use of dental services to reduce disparities in rural and
underserved areas by:
Building on relationships between providers and patients;
Allowing for direct or warm hand-offs between medical and
dental providers;
Reducing barriers to care such as transportation, time off
work, childcare, etc.; and
Enabling care coordination especially for patients with
chronic issues.
In Iowa, our Federally Qualified Health Centers (Community Health
Centers) are an example of how this integration can be developed and
offered to rural and underserved patients. To ensure these programs
continue to be sustainable and successful in providing affordable and
high-quality services, health centers and other providers need stable
funding and resources so they can continue to serve this unique patient
population, recruit talented providers and expand services where
appropriate. In particular, incentivizing integrated programs promotes
whole person health andresults in the greatest return on Federal
investments.
As a complement to this effort, improving dental care and coverage
for people living in rural and underserved communities should include
incentives and funding to develop innovative workforce pilot projects.
These projects should have the flexibility to utilize more economical
dental workforce strategies within medical, dental and public health
settings. Examples could include Community Health Workers with oral
health training, expanded function dental assistants and dental
hygienists, opportunities for additional mid-level dental professionals
such as dental therapists to be licensed in States and serve as an
additional provider option, and the use of tele-dentistry to increase
the reach of the limited number of dentists. Further, programs such as
the National Health Service Corps could assist in allowing dental
students to take jobs in rural and underserved areas which may be cost
prohibitive due to their student loans. These or other pilot programs
aimed at workforce solutions for dental provider shortages can only
improve access issues.
______
Questions Submitted by Hon. Debbie Stabenow
maternity coverage
Question. We've heard from families and health-care providers in
Michigan who are concerned about access to maternity coverage in rural
areas. Close to 500,000 women give birth each year in rural hospitals
and often face additional barriers and complications. For example,
women in rural areas report higher rates of obesity, deaths from heart
disease, and childbirth related hemorrhages. In addition, more than
half of women in rural areas must travel at least half an hour to
receive obstetric care, which can lead to decreased screening and an
increase in birth related incidents.
Since 2004, a large number of rural obstetric units have closed,
and only increased the distances that mothers must travel in order to
receive maternity and delivery care. Unfortunately, the percent of
rural counties in the United States without hospital obstetric units
increased by about 50% during the past decade.
Do you have experience with loss of obstetric care for women within
your respective fields?
Answer. Of the 118 hospitals in Iowa, 35 percent (43) do not offer
obstetric care. For rural Iowans served by Critical Access Hospitals,
50 percent (41 of 82) do not provide obstetric care. Three obstetric
unit closures have occurred in the last 5 years, with the most recent
involving a hospital with less than 30 births annually and 27 miles
from the nearest hospital with obstetric services.
Question. What steps should be taken to ensure that the proper
range of maternal care services are being offered through innovative
rural health models?
Answer. While this question targets maternity care, it is
representative of the larger policy issue facing rural America--how to
safely right size service delivery. Maternity care, as a specialty
area, illustrates the need for rural models to address the cost of
access--i.e., time and distance from major service centers, lack of
comprehensive community services, and healthcare workforce dead zones.
Innovative models must carefully define service areas with these access
characteristics in mind and promote service delivery flexibility to
allow providers to practice at top of licensure, use centers of
excellence models when appropriate, and capitalize on technology to
overcome distance barriers. For maternity, a special emphasis should
include prenatal care and outreach and leverage child and maternal
health funding.
In terms of the larger picture, rural service delivery needs a
regional emphasis with weight concentrated on the front end of the
story (i.e., preventive services). A regional emphasis does not mean
common healthcare ownership; instead, providers must be connected to a
healthcare facility/facilities with enough volume to provide safe and
quality care. These strong linkages are imperative to respond in an
emergency to an acute event or over time to manage a chronic disease.
As a country, we cannot support an OB specialist, cardiologist,
neurologist, or pulmonologist at each hospital, nor can advanced
practice professionals fill every gap. We would encourage Congress to
incentivize collaborative relationships in rural areas to uphold
Medicare's duty to provide quality services regardless of location.
______
Questions Submitted by Hon. Benjamin L. Cardin
telemedicine
Question. Although many may think of Maryland as an urban hub with
its DC suburbs and large cities, there are parts of my State, both on
the Eastern Shore and on the western side of the State, that are either
very rural or medically underserved. My constituents who live in these
parts of the State, must often drive long distances to get the health
care they need. One way to increase access to quality health services
to rural and underserved communities, is by offering treatment through
telehealth technology. How do you see the role of telehealth continuing
to grow in healthcare delivery, and how can it be better utilized to
increase care for Medicare beneficiaries?
Answer. Telehealth offers an important tool to increase access to
health care. The use of telehealth continues to increase as a means to
enhance access to and improve quality of care in the most cost-
effective setting.\7\ Telehealth technologies are quickly evolving and
becoming increasingly patient-focused in terms of attempting to provide
access to care in a location of the patient's preference. To support
telehealth, laws should be flexible to accommodate new and emerging
technologies and reduce administrative burden to enable rural
facilities to shift costs to infrastructure investment to best serve
the needs of rural and underserved patients. In particular, we would
recommend that two-sided AAPMs and MA plans should be provided with
regulatory flexibility to encourage telehealth and its role in high
value service delivery.
---------------------------------------------------------------------------
\7\ In 2001, the Congressional Budget Office estimated it would
cost the Medicare program $150 million to cover telehealth services for
the first 5 years ($30 million a year). Fifteen years later, total
payments (2011-2016) still have not cracked that $150-million forecast,
and annual spend has not hit $30 million. Lacktman, Nathaniel,
``Medicare Payments for Telehealth Increased 28% in 2016: What You
Should Know,'' National Law Review, August 28, 2017.
In general, the case use for telehealth has been restrained by
Medicare payment policy. It is difficult in some areas to determine its
efficacy because it has not been widely used. The following are options
that Congress could consider to better serve Medicare beneficiaries
---------------------------------------------------------------------------
through telehealth:
Remove licensure barriers. As stated in the response to
Senator Wyden, this would enable licensed health care providers
to be authorized to treat beneficiaries through telehealth
irrespective of the State, or of the location in a State, of
the health-care provider or the beneficiary.
Remove geographic restrictions. This would allow telehealth
to be provided in locations regardless of rural or HPSA status.
This is currently allowed in the Next Generation ACO benefit
enhancement and is scheduled to be expanded to other ACOs in
2020.\8\ This policy should encompass all AAPMs as an incentive
to take risk; however, it could be expanded further.
---------------------------------------------------------------------------
\8\ Balanced Budget Act of 2018.
Expand coverage. Explore a broader approach to telehealth
coverage beyond the ``replicate and repeat'' of the Medicare
---------------------------------------------------------------------------
Fee-For-Service reimbursement schedule.
Define ``clinically appropriate.'' MA plans will soon be
allowed to offer additional, clinically appropriate telehealth
benefits in their annual bid amounts. We encourage Congress and
CMS to clarify that clinically appropriate should reflect the
full scope of practice as determined by State licensing boards
and should not be restricted by CMS.
Authorize additional coverage areas. This would entail
revising Social Security Act section 1834(m) to allow Medicare
telehealth services for:
``Store-and-forward'' services such as wound
management and diabetic retinopathy;
Provider services otherwise covered by
Medicare, such as physical therapy, occupational therapy, and
speech-language-hearing services; and
Already covered health procedures rendered by
a telehealth method.
Expand ``originating site'' to include a beneficiary's
residence. Unlike Medicare, many healthcare systems and
commercial insurance providers have adopted and cover direct-
to-consumer telehealth services. Medicare's noncoverage shifts
the cost burden to the beneficiary for self-pay, instead of a
co-pay, and potentially delays care due to scheduling and
travel. This is another item that is available to certain
Medicare ACOs, but should be considered for expansion to all
AAPMs and perhaps beyond.
chronic kidney disease and medigap
Question. For many Medicare beneficiaries living with kidney
failure, particularly those living in rural or underserved areas,
accessing affordable care for their complex and chronic condition is a
constant financial challenge. Over 92,000 dialysis patients live in
States with no access to Medigap. This often leaves them unable to
afford Medicare Part B's 20-percent cost sharing, which for a patient
with kidney failure can often amount to tens of thousands of dollars of
out-of-pocket costs each year. Have you had challenges with Medicare
beneficiaries who don't have access to Medigap coverage getting the
care they need? For example Medicare beneficiaries or patients with
ESRD under 65?
Answer. Iowa does not require Medigap policies for people under 65
and eligible for Medicare because of a disability or End-Stage Renal
Disease (ESRD). We would agree that when beneficiaries, particularly
those with chronic illnesses, are uninsured or underinsured, financial
pressures exist. It appears that this question is larger than Medigap
coverage and may demand alternative models for addressing these chronic
conditions, such as the CMS Innovation Center's Comprehensive ESRD Care
(CEC) Model.
Question. Could you speak to the challenges Medicare beneficiaries
face when they don't have access to Medigap plans and the benefits for
Medicare beneficiaries who do have access to Medigap plans?
Answer. We lack the specifics to appropriately respond, as there
are upwards of 11 different standard benefit packages for Medigap with
varying cost sharing levels.
in closing
Thank you for permitting us to share our thoughts as this committee
considers the future of rural health care. We are passionate about our
work in rural health care and its impact on the well-being of our
residents and the vitality of our communities. We welcome and look
forward to continuing this dialogue in the future and extend an offer
to this committee to come see us in action.
______
Prepared Statement of Hon. Ron Wyden,
a U.S. Senator From Oregon
Every year I hold open-to-all town hall meetings in every rural
Oregon county, and I meet with a lot of leaders from the rural health
care community. There are a few potential health-care calamities that
have them afraid for what's coming down the pike.
First, people in rural communities feel like there's a wrecking
ball headed their way because the Trump administration and half of
Congress have spent the last 15 months desperately trying to make huge
cuts to Medicaid. Now there are rumblings that another assault may be
coming. The fact is, Medicaid is a lifeline for rural hospitals and
patients. The experts will tell you that if you wanted to turn rural
America into sacrifice zones where hospitals shut down and people
cannot get the health care they need, the quickest way to do it is by
slashing Medicaid.
Second, people in rural areas today feel like their local hospitals
are already teetering on the brink of closing their doors. And if the
local hospital goes under, that means no more emergency department open
in a crisis.
This isn't a far-off, theoretical problem. Decades ago, back when
getting routine health care more often meant spending multiple nights
in a hospital inpatient bed, rural hospitals were much more secure.
They could afford to maintain the emergency department. But that
service may be on the ropes, because rural hospitals today are under
huge financial pressure. Offering a variety of inpatient services and
keeping that emergency room open is enormously expensive, and at the
same time, more and more Americans are turning to outpatient settings
for chronic care, rehab and routine surgeries. Since 2010, 83 rural
hospitals have closed services, and hundreds more are in dire straits.
Bottom line, when you live in a big city like Portland, Chicago, or
Los Angeles, you take it for granted that there's always going to be an
emergency department nearby. But rural Americans who fear their
hospital will be the next to close are left wondering where they'd turn
if their son or daughter breaks a leg in a high school basketball game.
Where would they go if an older loved one suffers a stroke? Would they
get to a hospital in time if dad suffers a heart attack?
Keeping these hospital emergency departments open is a key
challenge when it comes to rural health care. In my view, it's step one
when you're working to prevent rural America from turning into that
sacrifice zone where people can't get the care they need. In a country
as wealthy as this one, where we spend $3.5 trillion a year on health
care, it absolutely must be possible to guarantee rural Americans
aren't on the outside looking in.
______
Communications
----------
American Ambulance Association
8400 Westpark Drive, Second Floor
McLean, VA 22102
Ph 703-610-9018
Fax 703-610-0210
www.the-aaa.org
The American Ambulance Association (AAA) is pleased that the Senate
Finance Committee is holding a hearing entitled ``Rural Health Care in
America: Challenges and Opportunities.'' The AAA represents ambulance
services of all types and sizes and from all areas of the United
States, including ambulance services in the most rural areas of the
country.
Founded in 1979, the AAA's Mission is to promote health care policies
that ensure excellence in the ambulance services industry. The AAA
represents ambulance services across the United States that participate
in serving more than 75 percent of the U.S. population with emergency
and nonemergency care and medical transportation services. The
Association views prehospital care not only as a public service, but
also as an essential part of the total public health care system.
Ambulance services are the front line and initial access point of our
local and national health care and emergency response systems.
Ambulance services provide crucial medical emergency response to
patients when they need it most. They also assist beneficiaries who
require skilled medical transportation and services in certain non-
emergency situations. In addition the vast majority of ambulance
services are small business. 54 percent of ambulance services provide
250 or fewer Medicare transports each year.
Ambulance services located in rural and super-rural areas face many of
the same challenges that other providers and suppliers are trying to
address. For example, while the Congress continues to extend the rural
and super-rural add-ons, these amounts do not make ambulances whole;
the Medicare rates still do not cover the cost of providing services in
rural areas, as the GAO has noted in two different studies. In
addition, CMS changed the ZIP code designations for several rural and
super-rural areas that has resulted in some clearly rural areas, such
as Siequoia National Forest, being deemed ``urban.'' A ZIP code being
designated as rural has a significant impact on reimbursement under the
Medicare ambulance fee schedule. Transports that originate in a rural
ZIP code receive an additional 1 percent increase to the base and
mileage rates, but more importantly a 50 percent increase in the
mileage rates for miles 1 to 17. This can mean as much as an 8 percent
increase in reimbursement for providers who serve rural areas.
In addition, ambulance services find it difficult to maintain the
skilled workforce necessary to provide high quality services. Given the
low Medicare rates, EMTs and paramedics can often earn more at fast
food restaurants than by providing life-
saving and life-sustaining care as part of an ambulance team.
The low-density population in rural areas also presents serious
challenges. Economies of scale possible in more densely population
areas are not achievable in rural areas, especially when ambulances are
required to transport patients to highly skilled facilities in far-away
urban areas that can be hours away from their locations.
Moreover, rural ambulance services often find themselves as the safety
net for citizens and only available health care provider in communities
in which the hospital has closed ore or other health care providers
have left or limited their hours. This safety net is being strained.
However, despite these challenges, there is hope--ambulance services
can help rural communities maintain access to health care services.
Ambulance services can and do provide highly specialized and skilled
care that 20 years ago was only available in hospital emergency
departments. In addition, Medicare demonstration projects have shown
that ambulance services can provide important community health care
services, including services such as care management, pharmacological
interventions, airway management, and vaccinations, as well as patient
safety checks and education.
MedPAC recognized in its 2016 Report to the Congress Chapter on
``Improving efficiency and preserving access to emergency care in rural
areas'' that ``communities that cannot support a 24/7 ED . . . may have
to rely on an ambulance service to stabilize and transfer patients.''
\1\ In some instances, an ambulance service may work with a primary
care practice. Some communities are already testing these models, such
as the Kansas Hospital Association efforts in rural areas of the State.
---------------------------------------------------------------------------
\1\ MedPAC, ``Improving efficiency and preserving access to
emergency care in rural areas,'' Ch. 7, Report to the Congress (June
2016).
Other models, such as community paramedicine, offer additional avenues
through which ambulance can assist in addressing the rural health care
crisis. Results from the Centers for Medicare and Medicaid Innovation
have shown that ambulance services are able to improve patient outcomes
and reduce overall Medicare spending when allowed to provide innovative
models of care. In the analysis of this pilot, Regional Emergency
Management Services Authority (REMSA) through its community
paramedicine showed statistically significant reductions in inpatient
admissions. While REMSA's sample size was small, REMSA's data show that
it saved during the four-year grant period $1.8 million in program
---------------------------------------------------------------------------
savings by avoiding 1,509 emergency department visits.
To enable ambulance services to fill the gaps in these communities, the
Congress should:
1. Stabilize the Medicare ambulance fee schedule by making the add-ons
permanent and taking into consideration 132 rural census tracts when
determining how ZIP codes are designated as rural and super-rural.
2. Consider other funding mechanisms, such as MedPAC's recommendation
for federal subsidies, to incentivize ambulance services in underserved
areas to remain when other providers have closed their doors.
3. Allow ambulance services to be defined as ``providers'' under
Medicare and reimburse them for the care provided, even if a patient
does not require transport to a designated facility.
4. Eliminate unnecessary and overly-burdensome regulatory requirements
by:
a. Eliminating the requirement for the Physician Certificate
Statement when a beneficiary is transported between hospitals or by
Specialty Care Transport, which duplicates other paperwork
requirements;
b. Requiring ambulance providers to update the 8558 Ambulance
Enrollment Form no more than once a year, rather than any time a
vehicle is added to, or removed from, the service;
c. Eliminating the requirement that patients sign ambulance
claims when other documentation establishing that the beneficiary
received the service is available; and
d. Requiring the Secretary to take into account inaccuracies in
Social Security records or other official death records before revoking
billing authority for ambulance services.
As the Committee considers ways to address the rural health care
crisis in America, the AAA encourages Members to find ways not only to
stabilize the economics of ambulance services to ensure access to these
critically important health care services in rural American, but also
to incentivize these services so that they remain in the communities.
The AAA appreciates the Committee's attention to this important issue
and offers our assistance in working with you to develop, pass, and
implement appropriate policies that make sure that rural ambulance
services can overcome the challenges they face, as well as to eliminate
statutory and regulatory barriers that make it difficult for ambulance
services to develop innovative care delivery models to meet the needs
of patients and to address the unique situations rural communities
face.
______
American Clinical Laboratory Association (ACLA)
1100 New York Avenue, N.W., Suite 725 West
Washington, DC 20005
(202) 637-9466
Fax: (202) 637-2050
Introduction
The American Clinical Laboratory Association (ACLA) appreciates the
opportunity to provide this statement for the record for the May 24,
2018 hearing entitled, ``Rural Health Care in America: Challenges and
Opportunities.''
ACLA is a not-for-profit association representing the nation's leading
clinical and anatomic pathology laboratories, including national,
regional, specialty, ESRD, hospital and nursing home laboratories. The
clinical laboratory industry employs nearly 277,000 people directly and
generates over 115,000 additional jobs in supplier industries. Clinical
laboratories are at the forefront of personalized medicine, driving
diagnostic innovation and contributing more than$100 billion to the
nation's economy.
Flawed Implementation of PAMA Section 216
Congress passed the Protecting Access to Medicare Act (PAMA) in 2014.
Section 216 of PAMA dramatically changed how laboratories are
reimbursed for providing clinical laboratory services to Medicare
beneficiaries, moving from a static fee schedule to determining
payments based on commercial payments to the broad spectrum of
laboratory providers.
Congress directed the Centers for Medicare & Medicaid Services (CMS) to
collect private payor payment rates and associated volumes
(``applicable information'') from independent laboratories, hospital
laboratories, and physician office laboratories (``applicable
laboratories''), and to calculate a weighted median for each test on
the Clinical Laboratory Fee Schedule (CLFS) to determine a Medicare
payment rate for each test.
However, CMS deliberately disregarded Congress' instructions by
gathering rate and volume information from less than one percent of
laboratories nationwide. This blatant omission ignores the fundamentals
of a market-based system. By ignoring the data from more than 99
percent of the nation's laboratories, CMS' actions will have a chilling
effect on patient care and delivery system reforms moving forward.
Furthermore, per CMS' own analysis, only 36 rural laboratories in the
entire United States reported data.\1\ That is less than 2 percent of
the total number of laboratories, although 23 percent of Medicare
beneficiaries live in rural areas.\2\
---------------------------------------------------------------------------
\1\ Summary of Data Reporting for the Medicare Clinical Laboratory
Fee Schedule Private Payor Rate-Based System (``Summary''), available
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
ClinicalLabFeeSched/Downloads/CY2018-CLFS-Payment-System-Summary-
Data.pdf.
\2\ ``Health Care Spending and the Medicare Program,'' MedPAC,
available at http://www.medpac.gov/docs/default-source/data-book/
jun17_databookentirereport_sec.pdf.
Additionally, as shown below, the volume of applicable information CMS
received from independent laboratories, physician office laboratories,
and hospital laboratories is far out of proportion to their respective
shares of CLFS volume.\3\,\4\
---------------------------------------------------------------------------
\3\ Summary of Data Reporting for the Medicare Clinical Laboratory
Fee Schedule Private Payor Rate-Based System (``Summary''), available
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
ClinicalLabFeeSched/Downloads/CY2018-CLFS-Payment-System-Summary-
Data.pdf.
\4\ ``Medicare Payments for Clinical Diagnostic Laboratory Tests in
2016: Year 3 of Baseline Data,'' available at https://oiq.hhs.gov/oei/
reports/oei-09-17-00140.pdf.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Clearly, independent laboratories submitted a far larger proportion of
applicable information than their share of CLFS volume. Hospital
laboratories and physician office laboratories submitted significantly
less applicable information by volume than their share of CLFS volume.
Simply put, the preliminary rates cannot be characterized as ``market-
based'' when the data does not reflect the market.
PAMA Payment Amounts Not Market-Based
The flawed data reporting requirements established by CMS have resulted
in Medicare payment rates that are not market-based. The Medicare
payment rate cuts could be unsustainable for many laboratories
furnishing services to Medicare beneficiaries and threaten access to
laboratory services in some areas, particularly in rural and
underserved communities. The cuts go far beyond what Congress and the
Office of Management and Budget (0MB) anticipated, calling into
question CMS' approach to implementing the law.
The below chart includes the increasing estimates of the PAMA cuts. The
Congressional Budget Office (CBO) estimated the initial three-year
transition to a market-based system at $1 billion. CMS now estimates
the cuts at $3.6 billion, an increase of 360 percent.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Under PAMA Sec. 216, nine of the top 10 laboratory tests (by CLFS
spending) will be cut by more than 30 percent when fully phased-in.
Moreover, 18 of the top 25 lab tests (by CLFS spending) will be cut by
more than 30 percent, and another three of the top 25 tests will be cut
by between 20 and 30 percent. For example:
Comprehensive metabolic panel will be cut by 37 percent (41.6
million tests performed in 2016).
Complete blood count will be cut by 35 percent (42 million tests
performed in 2016).
Vitamin D test will be cut by 35 percent (9 million tests
performed in 2016).
Glycosylated hemoglobin Ale test will be cut by 36 percent (19.3
million tests performed in 2016).
Thyroid stimulating hormone test will be cut by 35 percent (21.5
million tests performed in 2016).
Collectively, laboratories performed more than 133 million of the
foregoing five tests for Medicare beneficiaries in 2016. The top 25
tests by CLFS spending represented fully 63 percent of all Medicare
payments for lab tests in 2016, or $4.3 billion.\5\ But the deep cuts
are in no way limited to the highest volume test codes. The majority of
test codes will be cut by more than 10 percent when they are fully
phased-in.\6\
---------------------------------------------------------------------------
\5\ ``Medicare Payments for Lab Tests in 2016: Year 3 of Baseline
Data'' (OEI-09-17--00140) at 3.
\6\ Summary at 6. CMS itself said that ``about 58 percent of HCPCS
codes will receive a phased-in payment reduction in CYs 2018, 2019, and
2020, rather than a full private payor rate-based payment amount in CY
2018 because the total payment decrease'' will exceed 10 percent.
Cuts of this magnitude could be unsustainable for many laboratories
serving beneficiaries in rural areas, physician office labs in many
locations, and nursing homes, and they could threaten beneficiary
access to even basic laboratory testing. The costs of providing
laboratory testing to Medicare beneficiaries in these areas is higher
than in urban areas. It is likely that the cost could exceed the return
for some routine tests, meaning some rural labs may shutter and some
physician offices no longer will offer routine lab testing to their
patients to inform treatment and enable diagnosis at the time of a
patient's visit. It is unlikely other laboratories will rush in to fill
---------------------------------------------------------------------------
the void once these laboratories stop operating.
This misguided approach to PAMA implementation will directly harm
millions of beneficiaries, and beneficiaries in rural areas will be
most severely impacted. Over the next three years, ACLA has estimated
that laboratories in an urban area like Washington, DC will experience
a 15 percent cut, while some laboratories in rural areas, for instance
rural hospital laboratories, will experience a 28.5 percent cut.\7\ By
drastically cutting rates, particularly for the top-25 most performed
lab tests, CMS is severely affecting beneficiaries managing diabetes,
heart disease, liver disease, kidney disease, prostate and colon
cancers, anemia, infections, opioid dependency and countless other
common diseases and conditions. Reducing access to clinical lab service
will ultimately drive up the cost of care for beneficiaries and
taxpayers and result in delays in care as well as adverse outcomes.
---------------------------------------------------------------------------
\7\ CMS Final 2018 Clinical Lab Fee Schedule Rates, 2016 100%
Outpatient Standard Analytic File, 2016 Physician/Supplier Procedure
Summary File.
The harm from these cuts only increases for beneficiaries who are frail
or reside in medically underserved communities, such as rural areas.
These communities and patients rely on a shrinking number of smaller,
local laboratories: laboratories that will face the brunt of these
cuts. These cuts will force laboratories serving the most vulnerable
and homebound to either shut down operations, reduce services,
eliminate tests, or lay off employees. Ultimately, patients will have
fewer options to receive the lab test services that will keep them
healthy and out of the hospital, particularly patients who are less
mobile or would have to travel unreasonable distances to receive
---------------------------------------------------------------------------
laboratory services.
Cuts to Medicaid Payments for Labs Further Threaten Rural Patient
Access
In addition to the direct cuts to Medicare laboratory rates, we have
seen additional cuts in state Medicaid reimbursement rates. More than
one-third of all states have pegged their Medicaid rates for laboratory
services to the Medicare CLFS. Those state that base their Medicaid
reimbursement on then-current Medicare CLFS rates experienced a cut in
Medicaid reimbursement, in addition to Medicare reimbursement, as the
new PAMA rates went into effect on January 1, 2018. Since the new CLFS
rates went into effect, some states have reduced Medicaid reimbursement
for laboratory services even further, beyond the already deep PAMA
cuts. The application of an even lower percentage of Medicare rates by
state Medicaid programs imposes even greater reductions than
anticipated for Medicaid beneficiaries particularly in rural and areas
where there are relatively few providers. These Medicaid cuts, in
addition to the Medicare cuts, may leave providers no choice but to
discontinue laboratory services for Medicaid patients as the rates will
be less than what they cost to provide the services.
Conclusion
ACLA thanks the Committee for consideration of our comments. We look
forward to working with the Senate Finance Committee and stakeholders
on advancing legislation to address the flawed implementation of
Section 216 of the Protecting Access to Medicare Act, protecting access
to laboratory services for Medicare beneficiaries.
______
American Hospital Association
800 10th Street, NW
Two CityCenter, Suite 400
Washington, DC 20001-4956
(202) 638-1100 Phone
www.aha.org
On behalf of our nearly 5,000 member hospitals, health systems and
other health care organizations, and our clinician partners--including
more than 270,000 affiliated physicians, 2 million nurses and other
caregivers--and the 43,000 health care leaders who belong to our
professional membership groups, the American Hospital Association (AHA)
appreciates the opportunity to provide input regarding action Congress
can take to maintain access to health care in rural communities.
Nearly 60 million Americans live in rural areas and depend on their
hospital as an important--and often only--source of care in their
communities. Rural hospitals face multiple instabilities due to the
unique circumstances of providing care in rural areas, including remote
geographic location, low-patient volumes, workforce shortages, and a
population that is often older and sicker and more dependent upon
federal programs, such as Medicare and Medicaid, which reimburse below
the cost of care.
During the 1990s, Congress created the critical access hospital (CAH)
program and other special payment programs to help address the
financial distress facing many rural providers, as well as an increase
in the number of rural hospital closures.
Over time, as health care delivery has shifted from volume to value,
and as more services are provided in the outpatient setting, many of
these special rural programs have become outdated and fail to provide
the intended financial stability. Over this same period, federal
payment changes and the cost of meeting increasing regulatory
requirements (e.g., Medicare's 96-hour rule and ``direct supervision''
policy, Meaningful Use, etc.) have further exacerbated the financial
instability of many rural providers. According to the North Carolina
Rural Health Research Program, 83 rural hospitals have closed since
2010 due to ``likely multiple contributing factors, including failure
to recover from the recession, population demographic trends, market
trends, decreased demand for inpatient services, and new models of
care.''
Recognizing these challenges and the need for new integrated and
comprehensive health care delivery and payment strategies, the AHA
Board of Trustees created in 2015 the Task Force on Ensuring Access in
Vulnerable Communities. The following year, the task force issued a
report outlining nine emerging strategies that can help preserve access
to health care services in vulnerable communities. These strategies
will not apply to or work for every community, and each community has
the option to choose one or more that are compatible with its needs.
The AHA is pleased to include those recommendations in this statement,
along with additional policy recommendations from the AHA Rural
Advocacy Agenda and the 2018 AHA Advocacy Agenda.
Our statement provides an overview of the unique circumstances and
challenges facing rural communities and hospitals, as well as
recommendations for action. We appreciate the opportunity to submit
this statement for the record.
UNIQUE CIRCUMSTANCES AND CHALLENGES FACING RURAL COMMUNITIES AND
HOSPITALS
DECLINING POPULATION, INABILITY TO ATTRACT NEW BUSINESSES AND BUSINESS
CLOSURES
Rural communities are challenged by declining populations because
population growth from natural change (births minus deaths) is no
longer sufficient to counter migration losses when they occur.
According to the U.S. Department of Agriculture (USDA), from April 2010
to July 2012, the estimated population of non-metro counties as a whole
fell by close to 44,000 people.\1\ Although this may seem like a small
decline, the USDA indicates that it is a sizeable downward shift from
the 1.3 percent growth these counties experienced during 2004-2006.\2\
From July 2012 to July 2013, the population in non-metro areas
continued this three-year downward trend.\3\ Such declines may have a
ripple effect, leading to other negative impacts, such as business
closures. They may change the health or needs of the community, which
may in turn affect the viability of certain businesses. When businesses
close or a community is unable to attract new businesses, it becomes
more difficult for it to retain existing health care services and
recruit new providers. As a result, these communities tend to have
fewer active doctors and specialists, and face difficulties in
accessing care, which can complicate early detection and regular
treatment of chronic illnesses.
---------------------------------------------------------------------------
\1\ United States Department of Agriculture Economic Research
Service. ``Rural America at a Glance, 2013 Edition.'' Last accessed 1/
19/16 at: http://www.ers. usda.gov/media/1216457/eb-24_single-
poges.pdf.
\2\ Id.
\3\ United States Department of Agriculture Economic Research
Service. ``Rural America at a Glance, 2014 Edition.'' Last accessed 1/
19/16 at: http://www.ers. usda.gov/media/1697681/eb26.pdf.
---------------------------------------------------------------------------
POOR ECONOMY, HIGH UNEMPLOYMENT AND LIMITED ECONOMIC RESOURCES
The presence of a poor economy typically leads to high levels of
unemployment and a limited amount of economic resources. These factors
are linked to poor health outcomes. For example, poverty may result in
individuals purchasing processed food instead of fresh produce, which
over time could lead to hypertension, obesity and diabetes. This also
may affect individuals' mental health and result in other health
conditions, such as high blood pressure, high cholesterol, diabetes and
obesity.\4\ Rural and inner city areas more often show the effects of a
poor economy. For example, overall, rural areas have seen moderate
growth in employment, but certain areas face losses in jobs (including
much of the South, Appalachia, Northwest and the Mountain West).\5\
---------------------------------------------------------------------------
\4\ Think Progress. ``Four Ways That Poverty Hurts Americans' Long-
Term Health.'' Last accessed 10/24/16 at: http://thinkprogress.org/
health/2013/07/30/2381471/four-ways-poverty-impacts-americans-health/.
\5\ United States Department of Agriculture Economic Research
Service. ``Rural America at a Glance, 2014 Edition.'' Last accessed 1/
19/16 at: http://www.ers. usda.gov/media/1697681/eb26.pdf.
---------------------------------------------------------------------------
AGING POPULATION
America's rural areas have a high proportion of Medicare patients,
which means changes and cuts to federal reimbursement programs have a
disproportionate effect on rural providers. U.S. Census data indicate
that close to 18 percent of rural counties' total population is aged 65
or older.\6\ This is in contrast to the general average of 14.3 percent
in large metropolitan statistical areas (MSAs) and 14.8 percent in
other MSAs.\7\ Given that older individuals are more likely to have one
or more chronic diseases, these communities may face poorer health
outcomes. This challenge can be exacerbated if access to health care
services in the community is already limited.
---------------------------------------------------------------------------
\6\ U.S. Census Bureau. ``2009-2013 American Community Survey 5-
Year Estimates.'' Note: Urban/Rural status is assigned to counties
based on FY 2015 CBSA designations.
\7\ Id. Note: Large MSAs have a population of 1 million or more;
other MSAs have a population of less than 1 million.
---------------------------------------------------------------------------
LOWER VOLUME AND LOWER PROVIDER SUPPLY
Rural hospitals' low-patient volumes make it difficult for these
organizations to manage the high fixed costs associated with operating
a hospital. This in turn makes them particularly vulnerable to policy
and market changes, and to Medicare and Medicaid payment cuts. Many
rural hospitals operate with modest balance sheets and have more
difficulty than larger organizations accessing capital to investment in
modern equipment or renovating or ``right-sizing'' aging facilities.
Rural hospitals also have a difficult time attracting and retaining
highly skilled personnel, such as doctors and nurses.
GEOGRAPHIC ISOLATION
Rural communities are often self-contained and located away from
population centers and other health care facilities. Public
transportation is rare and, if it does exist, it is sporadic. In
addition, for many rural communities, inclement weather or other forces
of nature can make transportation impossible or, at the very least,
hazardous. Challenges with transportation for many rural residents
means that preventive and post-acute care, pharmaceutical and other
services are delayed, or, forgone entirely, which can increase the
overall cost of care once services are delivered.
LACK OF ACCESS TO PRIMARY CARE SERVICES
High-quality primary care involves health care providers offering a
range of medical care (preventive, diagnostic, palliative, therapeutic,
behavioral, curative, counseling and rehabilitative) in a manner that
is accessible, comprehensive and coordinated.\8\ A meaningful and
sustained relationship between patients and their primary care health
care providers can lead to greater patient trust in the provider, good
patient-provider communication, and the increased likelihood that
patients will receive, and comply with, appropriate care.\9\
Unfortunately, access to primary care services is unavailable for many
Americans. Today, nearly 20 percent of Americans live in areas with an
insufficient number of primary care physicians. These health
professional shortage areas for primary care face clear recruitment and
retention issues and have less than one physician for every 3,500
residents.\10\ They also tend to be more common in remote rural towns.
Lack of access makes it difficult for millions of Americans to access
preventive health care services, leaving them and their communities
susceptible to fragmented, episodic care and poorer health outcomes.
---------------------------------------------------------------------------
\8\ American Medical Association. ``Health and Ethics Policies of
the AMA House of Delegates.'' Last accessed 10/24/16 at: http://
www.ama-assn.org/ad-com/polfind/Hlth-Ethics.pdf.
\9\ Office of Disease Prevention and Health Promotion. ``Healthy
People 2020 Access to Health Care.'' Last accessed 10/24/16 at: http://
www.healthypeople.gov/2020/topics-objectives/topic/Access-to-Health-
Services.
\10\ Health Resources and Services Administration Data Warehouse.
Last accessed 10/24/16 at: http://datawarehouse.hrsa.gov/Topics/
ShortageAreas.aspx.
The AHA's Task Force on Ensuring Access in Vulnerable Communities
identified additional challenges facing rural communities in its
report. In addition, the task force identified the essential health
care services that should be provided in all communities, including
emergency services, primary care services, transportation and a robust
referral structure.
RECOMMENDATIONS
ALTERNATIVE PAYMENT MODELS
Rural Emergency Medical Center Designation. The AHA's Task Force on
Ensuring Access in Vulnerable Communities considered a number of
integrated, comprehensive strategies to reform health care delivery and
payment. The ultimate goal was to provide vulnerable communities and
the hospitals that serve them with the tools necessary to determine the
essential services they should strive to maintain locally, and the
delivery system options that will allow them to do so.
One such option is the 24/7 Emergency Medical Center (EMC) model. The
EMC would allow existing facilities to meet a community's need for
emergency and outpatient services, without having to provide inpatient
acute care services. EMCs would provide emergency services (24 hours a
day, 365 days a year) as well as transportation services. They also
would provide outpatient services and post-acute care services,
depending on a community's needs.
The AHA urges Congress to consider the Rural Emergency Acute Care
Hospital (REACH) Act (S. 1130), which would establish a 24/7 rural
emergency medical designation under the Medicare program to allow small
rural hospitals to continue providing necessary emergency and
observation services (at enhanced reimbursement rates), but cease
inpatient services.
Additionally, the AHA strongly supports the Rural Emergency Medical
Center (REMC) Act (H.R. 5678), which would allow exiting CAHs and those
with 50 or fewer beds to convert to a new designation (REMC) under the
Medicare program. REMCs would provide 24/7 emergency services and the
type of services a hospital provides on an outpatient basis to Medicare
beneficiaries, including observation, diagnostic and telehealth
services. REMCs also could provide post-acute care in a separately
licensed skilled nursing facility unit. Payment for REMCs would be a
fixed facility fee and the outpatient prospective payment system (OPPS)
rate for services. REMCs would be required to provide transportation
services to higher acuity facilities as needed. (The Medicare Payment
Advisory Commission recently expressed support for isolated, rural
stand-alone emergency departments that would bill at the OPPS rate and
provide annual payments that would assist with fixed costs.)
Rural Community Hospital Demonstration Program. Special hospital
designations and demonstration programs have the potential to enable
rural hospitals to maintain access to critical health care services.
The Rural Community Hospital (RCH) Demonstration is a program Congress
created in the Medicare Modernization Act of 2003, extended and
expanded in the Patient Protection and Affordable Care Act, and
extended again in the 2016 as part of the 21st Century Cures Act. The
RCH program allows hospitals with 26- 50 beds to test the feasibility
of cost-based reimbursement. These hospitals are too large to qualify
for the CAH program, but too small to benefit from economies of scale.
The AHA urges Congress to expand the RCH program and make it permanent.
In addition to the EMC model and RCH Demonstration program, the AHA
recommends the establishment of additional alternative payment models,
including global budgets, a frontier health strategy and urgent care
centers. These are discussed in detail in the attached report.
WORKFORCE
Recruiting and retaining health professionals in rural areas remains
challenging and expensive. Telehealth offers a promising solution to
some of the challenges related to physician shortages in rural areas
and limited access to certain services including behavioral health and
addiction treatment. However, coverage and payment for telehealth
services must be expanded in order to better address the issue (see
additional information below regarding improving access to telehealth).
Additionally, Congress should expand existing programs that make it
easier for physicians to practice in rural areas and expand scope of
practice laws to allow nurses and other allied professionals to
practice at the top of their license.
The AHA urges Congress to pass the Conrad State 30 and Physician Access
Act (S. 898/H.R. 2141) to extend and expand the Conrad State 30 J-1
visa waiver program, which allows physicians holding J-1 visas to stay
in the U.S. without having to return home if they agree to practice in
a federally designated underserved area for three years; and the
Resident Physician Shortage Reduction Act (S. 1301/H.R. 2267) to
increase the number of Medicare-funded residency positions.
REIMBURSEMENT
Medicare reimburses hospitals below the cost of care for the services
they provide and does not account for the high fixed costs associated
with operating a hospital. Medicare sequestration cuts of 2 percent of
reimbursement have further destabilized many small, rural hospitals.
The AHA urges Congress to end Medicare sequestration and ensure
providers are appropriately reimbursed for the care they provide.
REGULATORY RELIEF
A recent AHA report on the regulatory burden faced by hospitals
indicates that the burden is substantial and unsustainable. Hospital
and health systems spend nearly $39 billion a year solely on
administrative activities related to regulatory compliance from four
federal agencies, such as quality reporting, Medicare conditions of
participation, and audits of various kinds.
Meeting regulatory requirements requires an investment of both staff
and resources, which can be more challenging for rural providers who
must meet many or all of the same requirements as other hospitals.
Federal regulation is largely intended to ensure that health care
patients receive safe, high-quality care. In recent years, however,
clinical staff find themselves devoting more time to regulatory
compliance, taking them away from patient care. An overall reduction in
regulatory burden would enable providers to focus on patients, not
paperwork, and reinvest resources in innovative approaches to improve
care, improve health, and reduce costs.
Additionally, certain federal regulations are unnecessary; do not
positively impact patient care; and have the potential to limit access
to services. Some examples are provided below.
Direct Supervision. The Centers for Medicare and Medicaid Services'
(CMS) ``direct supervision'' rule requires that CAHs and hospitals with
100 or fewer beds provide outpatient therapeutic services under the
``direct supervision'' of a physician. These services have always been
provided by licensed, skilled professionals under the overall
supervision of a physician and with the assurance of rapid assistance
from a team of caregivers, including a physician. While hospitals
recognize the need for ``direct supervision'' for certain outpatient
services that pose a high risk or are very complex, the agency's policy
generally applies to even the lowest risk services. The AHA urges
Congress to pass the Rural Hospital Regulatory Relief Act (S. 243/H.R.
741) to make permanent the enforcement moratorium on CMS's ``direct
supervision'' policy for outpatient therapeutic services provided in
CAHs and small, rural hospitals.
Ninety-six-hour Physician Certification. Medicare currently requires
physicians to certify that patients admitted to a CAH will be
discharged or transferred to another hospital within 96 hours in order
for the CAH to receive payment under Medicare Part A. While CAHs must
maintain an annual average length of stay of 96 hours, the y may offer
some critical medical services that have standard lengths of stay
greater than 96 hours. Enforcing the condition of payment will force
CAHs to eliminate these ``96-hour-plus'' services. The AHA urges
Congress to pass the Critical Access Hospital Relief Act (H.R. 5507) to
remove permanently the 96-hour physician certification requirement as a
condition of payment for CAHs, thus recognizing that this condition of
payment could stand in the way of promoting essential, and often
lifesaving, health care services to rural America. These hospitals
would still be required to satisfy the condition of participation
requiring a 96-hour annual average length of stay.
Electronic Health Records (EHRs) and Interoperability. America's
hospitals are strongly committed to the adoption of EHRs, and the
transition to an EHR-enabled health system is well underway. We are
pleased that CMS proposed some significant changes to the newly renamed
Promoting Interoperability program to increase flexibility in 2019.
This includes moving to a performance-based scoring system and removing
several measures that unfairly hold hospitals accountable for the
actions of others. In addition, the agency proposes a 90-day reporting
period in 2019 and 2020. Unfortunately, CMS proposes to require the use
of the 2015 Edition certified EHR in 2019 and to retain the requirement
to connect ``apps'' to a hospital's system without the ability to vet
them for security. The AHA urges Congress to pass the EHR Regulatory
Relief Act (S. 2059), which would eliminate the ``all or nothing''
approach, establish a 90-day reporting period, and expand hardship
exemptions.
Co-location. Hospitals in rural communities often create arrangements
with other hospitals or providers of care in order to offer a broader
range of medical services and better meet the needs of patients. For
example, a rural hospital may lease space once a month to medical
specialists from out of town, such as a cardiologist, behavioral health
professional or oncologist. These kinds of arrangements can improve
access to care and care coordination, while also increasing convenience
for patients.
However, in 2015, a CMS presentation created concern among hospitals
that longstanding co-location arrangements would be declared ``non-
compliant with CMS's rules.'' Since then, hospitals have heard mixed
messages related to co-location. Hospital staffs have spent significant
amounts of time trying to ascertain the rules and determine how to
sustain the most effective patient care for their community while
considering whether re-construction would be required in some
circumstances. Out of an abundance of concern and in the absence of
clear direction, some hospitals have begun to unwind their co-location
or shared service arrangements. Unfortunately, these changes can result
in patients having difficulty accessing needed care.
If CMS does not clearly and appropriately define how hospitals can
share space, services and staff with other providers in rural areas,
Congress should statutorily define such arrangements in order to
protect access to specialists in rural communities.
Stark and Anti-Kickback. Hospitals and other providers are adapting to
the changing health care landscape and new value-based models of care
by eliminating silos and replacing them with a continuum of care to
improve the quality of care delivered, the health of their communities
and overall affordability. Standing in the way of their success is an
outdated regulatory system predicated on enforcing laws no longer
compatible with the new realities of health care delivery. Chief among
these outdated barriers are portions of the Anti-kickback Statute, the
Ethics in Patient Referral Act (also known as the ``Stark Law'') and
certain civil monetary penalties. These laws make it difficult for
providers to enter into clinical integration agreements that would
allow them to collaborate to improve care in ways envisioned by new
care models. Providers also need additional opportunities and support
to participate in new models of care, especially in rural areas where
there may be limited funds available for the significant infrastructure
investments that many of the existing models require.
The AHA urges Congress to create a safe harbor under the Anti-kickback
Statute to protect clinical integration arrangements so that physicians
and hospitals can collaborate to improve care, and eliminate
compensation from the Stark Law to return its focus to governing
ownership arrangements.
EXPAND ACCESS TO TELEHEALTH SERVICES
Telehealth is changing health care delivery. Through videoconferencing,
remote monitoring, electronic consultations and wireless
communications, telehealth expands patient access to care while
improving patient outcomes and satisfaction.
Telehealth offers a wide-range of benefits, such as:
Immediate, around-the-clock access to physicians, specialists,
and other health care providers that otherwise would not be available
in many communities;
The ability to perform remote monitoring without requiring
patients to leave their homes;
Less expensive and more convenient care options for patients;
and
Improved care outcomes.
Medicare Coverage of Services. Coverage for telehealth services by
public and private payers varies significantly and whether payers cover
and adequately reimburse providers for telehealth services is a complex
and evolving issue. However, without adequate reimbursement and revenue
streams, providers may face obstacles to investing in these
technologies. This may be especially detrimental to hospitals that
serve vulnerable rural and urban communities--where the need for these
services may be the greatest. For Medicare specifically, more
comprehensive coverage and payment policies for telehealth services
that increase patient access to services in more convenient and
efficient ways would likely be necessary to make these strategies work
for vulnerable communities. This would include elimination of
geographic and setting location requirements and expansion of the types
of covered services.
As the use of telehealth has grown in recent years, well over half of
U.S. hospitals connect with patients and consulting practitioners at a
distance through the use of video and other technology. However, there
are several barriers to wide use of telehealth, including statutory
restrictions on how Medicare covers and pays for telehealth. While the
AHA was pleased that the Bipartisan Budget Act (BiBA) of2018 expanded
Medicare coverage for telestroke and provided waivers in some
alternative payment models, more fundamental change is needed. In
addition, many hospitals and health systems find that the
infrastructure costs for telehealth are significant. Establishing
telehealth capacity requires expensive videoconferencing equipment,
adequate and reliable connectivity to other providers, and staff
training, among other things. The fiscal year (FY) 2018 omnibus
appropriations bill included more than $50 million for rural telehealth
programs, but greater support is needed.
The AHA urges Congress to further expand telehealth capacity by
establishing a grant program to fund telehealth start-up costs.
Congress also should remove Medicare's limitations on telehealth by:
Eliminating geographic and setting requirements so patients
outside of rural areas can benefit from telehealth;
Expanding the types of technology that can be used, including
remote monitoring;
Covering all services that are safe to provide, rather than a
small list of approved services; and
Including telehealth in new payment models.
Access to Broadband. Adequate broadband infrastructure is necessary to
improve access to telehealth services and facilitate health care
operations, such as widespread use of EHRs and imaging tools. Many
innovative approaches to care delivery require a strong
telecommunications infrastructure. However, according to the Federal
Communications Commission (FCC), 34 million Americans still lack access
to adequate broadband. Lack of affordable, adequate broadband
infrastructure impedes routine health care operations, such as
widespread use of EHRs and imaging tools, and limits the ability to use
telehealth in both rural and urban areas. Congress took steps to
address this challenge in the FY 2018 omnibus appropriations bill,
which included $600 million to the Department of Agriculture for a new
pilot program offering grants and loans for broadband projects in rural
areas with insufficient broadband. The FCC also has a Rural Health Care
Program, which supports broadband adoption for non-profit rural health
care providers. Unfortunately, the $400 million annual cap has been
unchanged for over 20 years, and was exceeded in both 2016 and 2017,
leading to significant cuts for rural health care providers that have
limited budgets. These cuts not only affect the ability of these rural
health care providers to maintain strong broadband connections but also
could force tough decisions affecting funding for essential health care
services. In a February 2nd letter, we asked the FCC to restore this
funding and supported an FCC proposal to adjust the funding cap
annually for inflation, including a ``catch up'' increase for FY 2017
to account for inflation since the program began. We also urged the
Commission to assess future demand for broadband-enabled health care
services to set a more accurate cap.
The AHA appreciates Congress's focus in this area and urges continued
support for funding to help improve rural broadband access for health
care providers.
CONCLUSION
The AHA applauds this Committee's focus on issues facing rural
hospitals and the patients and communities they serve. The AHA looks
forward to working with you and the Congress to take meaningful action
to ensure access to health care services in vulnerable communities and
to support rural hospitals and the patients they serve.
See also:
AHA Task Force on Ensuring Access in Vulnerable Communities Report
AHA Rural Advocacy Agenda
AHA 2018 Advocacy Agenda
______
Association of Air Medical Services (AAMS)
909 N. Washington St., Suite 410
Alexandria, VA 22314
(703) 836-8732 Fax (703) 836-8920
www.aams.org
Established in 1980, the Association of Air Medical Services (AAMS) is
an international, non-profit 501(c)(6) trade association headquartered
in the Washington, DC area that represents and advocates on behalf of
our membership to enhance their ability to deliver quality, safe, and
effective medical care and medical transportation for every patient in-
need. AAMS is a dedicated team, committed to representing and
advocating for the air medical and the critical care ground transport
industry and supporting our members who proudly serve their communities
throughout the United States and around the world.
AAMS, on behalf of the 257 AAMS members representing over 95% of the
air medical operations in the United States, submits the following
statement to the Senate Finance Committee.
Air Medical Services
The use of air medical services has become an essential component of
the rural health care system. Air medical critical care transport saves
lives and reduces the cost of health care. It does so by minimizing the
time the critically injured and ill spend out of a hospital, by
bringing more medical capabilities to the patient than are normally
provided by ground emergency medical services, and by helping get the
patient to the right care quickly. Helicopter emergency medical
services (HEMS) and fixed wing aircraft are flying emergency intensive
care units deployed at a moment's notice to patients whose lives depend
on rapid care and transport. While air medical services may appear to
be expensive on a single-case basis compared with ground ambulance
service, examining the benefits behind the cost on an individual and a
system-wide basis shows that it is cost-effective. This is especially
true in rural America, where patients are simultaneously at greater
risk of severe injury and farther from definitive care.
Emergency air medical transport services are:
Required to respond to all requests for emergency transport
without knowledge or regard to the patient's ability to pay.
Available 24 hours a day, 7 days a week, 365 days a year, for
response to emergency requests, with some states requiring a minimum
response time.
Are always requested by medical professionals (physicians or
first responders). They do not self-dispatch and have no control over
their volume.
Air Medical's Critical Role in Rural Health Care
Air medical services provide a valuable medical resource that can
transport patients and medical staff long distances, as well as carry
medical equipment and medical supplies directly to the scene of the
onset of an illness or injury. The air medical industry dramatically
improves access to Level 1 and 2 trauma centers for over 120 million
Americans who would not be able to receive emergent care in a timely
manner otherwise. Over 90% of air medical flights are for treating
trauma, cardiac, and stroke--all conditions that are dependent on rapid
treatment at advanced medical facilities for the best outcome possible.
In rural and frontier areas, HEMS and fixed wing aircraft play a
particularly important role. For example, when the nearest ground
ambulance is farther, by travel-time, from the scene of injury than the
nearest HEMS, the air medical service may be the primary ambulance for
critically ill and injured patients in that area. Similarly, when the
nearest advanced life support (ALS)-capable medical facility is
farther, by travel-time, from the scene of the injury than a HEMS or a
fixed wing provider, the air medical service may be the primary ALS
provider for critically ill or injured patients in that area.
The air medical service can transport specialized medical staff
(surgical, emergency medicine, respiratory therapy, pediatric,
neonatal, obstetric, and specialized nursing staff) to assist with a
local mass casualty event or to augment the rural/frontier hospital's
staff in stabilizing patients needing special care before transport.
Increased need for these services, combined with the highly trained
staff, medical equipment, aviation and patient safety improvements, and
overhead costs, have increased operating costs significantly since the
Centers for Medicare and Medicaid Services (CMS) established the air
medical services fee schedule.
Study on Air Medical Costs
Current Medicare rates were never based on the cost of providing the
service and must be updated to reflect modern-day costs. AAMS engaged
an independent research firm, Xcenda LLC, to explore the cost of
providing emergency air medical transport using common Medicare cost
reporting methods. The purpose of the study was to provide unbiased
data to CMS, the Government Accountability Office (GAO), and members of
Congress regarding the actual costs of providing emergency air medical
services. The study was designed to represent the entire industry, not
just one business model or type, and to be as inclusive as possible
across the air medical community. AAMS strongly believes this study
provides an actual cost baseline for transport providers regardless of
business model.
Key findings from this groundbreaking study include:
While the study shows the break-even cost of an emergent
transport is estimated to be $10,199, it is important to understand
that CMS, as a government payer, does NOT include the costs of
uncompensated care generated by transporting un-insured and under-
insured patients and by patients covered by under-paying government
programs like Medicaid, Indian Health, TRICARE, and others.
When those costs (the accumulated deficit from transporting un-
insured, under-insured, and under paying government programs, weighted
according to the percentage of patients they cover) are accounted for,
the break-even cost of an emergent transport is estimated to be over
$26,000.
Those break-even costs do NOT include any operating income to
ensure air medical services are able to continue to operate. Every
business must be financially viable to sustain its operations. A modest
positive change in net assets (non-profit companies) or a modest margin
(for-profit companies) enable air medical programs to invest in their
people (medical licensing, certifications, etc.), new equipment
(aircraft, medical equipment, etc.), safety improvements (night vision
systems, flight data monitors, etc.), training (flight simulators,
medical training, etc.), and other systemic improvements to ensure they
provide the finest, patient-centered emergent care possible, 24/7/365,
for every patient-in-need.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Shortfall in Reimbursements for Air Medical Services
The air medical transport industry is faced with consistent reductions
in reimbursement payments for the emergency medical services provided
to patients in need. Despite the regularly increasing costs of
providing these emergency services, Medicare reimbursement has remained
stagnant and many state Medicaid programs cover little or no
reimbursement for these emergency transports. On average, 40% to 50% of
the patients transported are covered by Medicare, an additional 20% to
30% are covered by Medicaid, and 10% are uninsured. This means that
only 2 or 3 out of ten patients are commercially insured--an average
that worsens in rural America--and while the cost of providing the
transport is relatively the same for the majority of patients, the
amount reimbursed for that cost can vary widely from patient to
patient. Those costs must be recouped from somewhere, or the service
cannot survive in that location; this raises the price for all
patients, in the hopes of preserving the service and the access to
healthcare it provides.
Commercial insurers play a very large role in the ability of air
medical services to survive. If they refuse payment, delay payment, or
question the medical necessity of a service that can only respond when
requested by a physician or trained first-responder, air medical
services are unable to provide ongoing critical healthcare access.
Worse, varying state insurance laws allow insurance companies in some
states to arbitrarily limit payments to air medical transport
providers, leaving patients responsible for covering the remainder of
their bill. Patients are left in the middle and often used as leverage
to lower insurers' payment responsibilities.
While insurers must be held accountable and patients protected from
being used as leverage, the root cause of the problem can be addressed
by reforming Medicare and providing transparency through mandatory cost
reporting.
The ``Ensuring Access to Air Ambulance Services Act of 2017'' (S. 2121)
Congress can protect access to definitive care for the most critically
ill and injured patients by supporting the Ensuring Access to Air
Ambulance Services Act of 2017 (S. 2121), introduced last November by
Senators Heller (R-NV) and Bennet (D-CO). This legislation would
establish mandatory cost and quality reporting requirements on air
medical operators and update the Medicare fee schedule for air medical
services. The bill was designed and drafted to provide a long-term
solution to the shortfall in Medicare reimbursements which is already
leading to base closures and the curtailment of air medical operations
across the country.
This legislation helps ensure:
Transparency: Cost and quality reporting measures will provide
transparency to the public on the high cost of providing air medical
transport, especially in rural areas.
Efficiency: Increased transparency on costs and quality will
drive a more efficient system, rewarding those who can perform higher
quality services at a lower cost.
Quality: Value based purchasing program rewards high performing
air medical transport services and incentivizes increased quality in
healthcare transportation across the air medical community.
Access: Most importantly, the bill helps ensure that the largest
single payer of air medical transports--Medicare--funds those
transports at or near the cost of that service. This provides for the
stability of existing services and the access they provide to
healthcare.
We urge the Senate Finance Committee to report S. 2121 to the full
Senate, as it will address the chronic shortfall in Medicare
reimbursements and support the continued provision of this life-saving
service across the country and especially in rural areas.
Conclusion
We thank the Senate Finance Committee for this important opportunity to
provide the views of the air medical community on these critical
issues, and are happy to provide further information upon request.
______
Centerstone
44 Vantage Way, Suite 400
Nashville, TN 37228
June 7, 2018
U.S. Senate
Committee on Finance
Dirksen Senate Office Building
Washington, DC 20510-6200
RE: Statement for the record pertaining to May 24, 2018 full committee
hearing entitled ``Rural Health in America: Challenges and
Opportunities''
Dear Chairman Hatch and Ranking Member Wyden:
We applaud you for your commitment to examining ways to offer rural
Americans better care in their communities. Centerstone shares that
goal. Below, we share some information about our services, and share
our recommendations for improving the quality and timeliness of care
for individuals living in rural parts of the country.
About Centerstone
Centerstone is a multi-state not-for-profit provider of evidence-
based behavioral health services. In operation for over 63 years, we
service nearly 180,000 lives across Florida, Illinois Indiana,
Kentucky, and Tennessee in both inpatient and outpatient settings. In
Florida, Centerstone has facilities in Manatee and Sarasota counties.
In Illinois, Centerstone has facilities in 4 counties, with one
considered a rural county by the Health Resources and Services
Administration (HRSA) \1\, \2\ and 2 experiencing population
declines. Illinoisans come to our facilities from at least 54 other
counties across the state, most of which are rural. In Indiana, 10 of
the 18 counties with Centerstone facilities are considered rural by the
HRSA, with 9 counties experiencing population declines.\3\ In Kentucky,
we serve 7 counties.\4\ In Tennessee, 17 of the 30 counties we serve
are defined as rural by the HRSA, with 3 experiencing population
declines.\5\
---------------------------------------------------------------------------
\1\ https://www.hrsa.gov/sites/default/files/ruralhealth/resources/
forhpeligibleareas.pdf.
\2\ Centerstone has facilities in the following Illinois counties:
Franklin,* Jackson, Madison, and Williamson. Those designated by an
asterisk(*) are considered rural counties by the HRSA.
\3\ Centerstone has facilities in the following Indiana counties:
Bartholomew, Brown, Decatur,* Delaware, Fayette,* Henry,* Jackson,*
Jefferson,* Jennings,* Johnson, Lawrence,* Monroe, Morgan, Owen,
Randolph,* Rush,* Scott, Wayne.* Those designated by an asterisk(*) are
considered rural counties by the HRSA.
\4\ Centerstone has facilities in the following Kentucky counties:
Bullitt, Henry, Jefferson, Oldham, Shelby, Spencer, Trimble.
\5\ Centerstone serves the following counties in Tennessee via
outpatient clinics, school-based therapy, or mobile crisis services:
Bedford*, Bradley, Cheatham, Coffee,* Davidson, Dickson, Franklin,*
Giles,* Hamilton, Hickman, Houston,* Humphreys,* Lawrence,* Lewis,*
Lincoln,* Marshall,* Maury, McMinn,* Montgomery, Moore,* Perry,* Polk,
Putnam,* Robertson, Rutherford, Stewart,* Sumner, Wayne,* White,*
Wilson. Those designated by an asterisk (*) are considered rural
counties by the HRSA.
Through our specialized military services, we also serve veterans,
service members, and their families across the United States. Finally,
our Centerstone Research Institute (CRI) is tasked with developing
clinical innovations based upon the very best science that aims to
close the 17-year science-to-service gap. With decades of on-the-ground
experience, supported by outcomes research generated by CRI, we are
able to identify the most significant barriers to offering timely and
safe care to individuals.
``How do we get more providers to rural America?''
b Take steps to support the behavioral healthcare workforce
Senator Roberts noted that ``recruiting, training, and retaining
staff are some of the greatest challenges we have.'' We agree.
According to a 2018 State of Workforce Management Survey, the top
priority for behavioral health not-for-profit providers is recruiting
and retaining top talent, with the primary challenges being (a) an
inability to offer competitive pay and benefits, and (b) a lack of
qualified applicants. Thus, Centerstone supports the use of financial
incentives to start to close the critical behavioral healthcare
workforce gap.
The Substance Use Disorder Workforce Loan Repayment Act of 2018
(H.R. 5102/S. 2524) would function to directly alleviate the supply
problem because it would provide a loan-repayment incentive to
individuals choosing to practice in workforce shortage areas. The bill
would authorize the HRSA to pay up to $250,000 of an individual's
program loan obligations for those who complete a period of service in
an SUD treatment job in a mental health professional shortage area or
in a county particularly badly impacted by the opioid epidemic.
Specifically, the bill will offer student loan repayment of up to
$250,000 for participants who agree to work as a SUD treatment
professional in areas most in need of their services. The program will
be available to a wide range of direct care providers, including
physicians, registered nurses, social workers, and other behavioral
health professionals. Loan repayment would be for individuals pursing a
``SUD treatment job'' in an area defined as a Mental Health
Professional Shortage Area (MHPSA), as designated under section 332, or
a county (or a municipality, if not contained within any county) where
the mean drug overdose death rate per 100,000 people over the past 3
years for which official data is available from the State, is higher
than the most recent available national average overdose death rate per
100,000 people, as reported by the Centers for Disease Control and
Prevention. Persons would need to work full time for 6 years to receive
the full $250,000 in loan forgiveness.
The Opioid Crisis Response Act of 2018 (S. 2680) includes very
similar language in Section 412, but struck a critical provision of
H.R. 5102/S. 2524, which extends applicability of the loan repayment
beyond the boundaries of just Health Professional Shortage Areas
(HPSAs) to also include areas hardest hit by the opioid crisis (as
explained above). H.R. 5102/S. 2524 would function to more effectively
alleviate workforce shortages in areas that have the most need, many of
which are rural areas. Additionally, by providing loan repayment year
by year and not considering leaving early a breach of contract, H.R.
5102/S. 2524 avoids deterring participants who might be hesitant to
sign up for a longer commitment. By providing up to $250,000 in loan
forgiveness, there will be a significant incentive for participants to
stay in the program once they join. Finally, more types of providers
are eligible to participate in loan forgiveness through H.R. 5102/S.
2524 than through the S. 2680 language. H.R. 5102/S. 2524 provides a
broad list of providers that would be eligible for the program, and
allows the Secretary to add professions as needed. Thus, we ask that
you consider the benefits of the H.R. 5102/S. 2524 language in
recruiting and retaining providers in the hardest hit areas nationwide,
which will not only help bring providers to rural areas, but should
also help them stay in those areas long-term.
b Enable professionals to work at the top of their licensure
We know that there are more than 30 million people living in rural
communities in which no treatment options of any kind exist today--let
alone comprehensive,
evidence-based ones.\6\ By the year 2025, workforce projections
estimate that there will be a workforce shortage in the fields of
substance abuse and mental health treatment of approximately 250,000
providers across all disciplines.\7\ In 2013, all nine types of
behavioral health practitioners had shortages. Currently, six provider
types have estimated shortages of more than 10,000 FTEs, including
psychiatrists, clinical and counseling psychologists, substance abuse
and behavioral disorder counselors, mental health and substance abuse
social workers, and mental health counselors.\8\ With immense gaps in
treatment access and fatal opioid-related overdoses at an all-time
high,\9\ it is imperative that we take steps to address from multiple
angles.
---------------------------------------------------------------------------
\6\ National Rural Health Association.
\7\ https://www.whitehouse.gov/sites/whitehouse.gov/files/images/
Final_Report_Draft_11-1-20
17.pdf.
\8\ https://bhw.hrsa.gov/sites/default/files/bhw/health-workforce-
analysis/research/projections/behavioral-health2013-2025.pdf.
\9\ https://www.cdc.gov/vitalsigns/opioid-overdoses/.
Licensed marriage and family therapists (LMFTs) and licensed mental
health counselors (LMHCs) hold licensures on par with licensed clinical
social workers (LCSWs), yet their exclusion under Medicare is somewhat
arbitrary. (Please see attached document entitled: ``Medicare Standards
for Licensed Mental Health Counselors, Licensed Clinical Social
Workers, and Licensed Marriage and Family Therapists.'') As a result of
this workforce gap, providers face significant barriers when recruiting
within the limited allowable provider types, particularly in rural
areas. This shortage in eligible workers also results in wait times
that can be 4 times higher amongst Medicare patients, as opposed to
under Medicaid, which permits for reimbursement of LMHC and LMFT
services in some of our sites. The Mental Health Access Improvement Act
of 2017 (H.R. 3032/S. 1879) would allow LMFT and LMHC services to be
reimbursed by Medicare. This bill would enable faster access to care
for Medicare and some commercial patients, as well as optimize our
---------------------------------------------------------------------------
current workforce to operate at the top of its licensure.
b Urge CMS to issue swift guidance to all Medicare Managed Care
entities on ways to streamline the credentialing process so as to
improve credentialing in high need areas
Access to specialty addiction care is alarmingly low in rural
areas. In a meaningful step forward, the American Board of Medical
Specialties (ABMS) is now recognizing Addiction Medicine as a
specialty. Despite this recognition, however, it has been our
experience in Florida, Kentucky, Illinois, and Indiana that if a
physician, certified in addiction medicine by the American Board
Certification of Addiction Medicine (ABAM), is not a psychiatrist, then
that physician will either (a) be denied in the credentialing process,
or (b) the payer will not reimburse for their services, regardless of
credentialing approval. With some of the hardest hit areas facing the
most significant workforce shortages, these credentialing and
reimbursement barriers are not only undue red-tape, but are also
endangering patients by denying them access to professional care.
Below, we provide two examples of such scenarios:
One of our Medicare Managed Care entities has stated they
would accept Addiction Medicine Doctors on their panel as long
as they were listed with the American Board of Medical
Specialties (ABMS). As noted above, ABMS is now recognizing
Addiction Medicine as a specialty. However, with the
documentation ``transition'' still in progress, ABAM certified
physicians are still not listed with ABMS. Thus, even though a
physician may be certified, we are not able to credential them
with the managed Medicare entity if they are not listed with
ABMS.
A separate managed Medicare entity will credential ABAM
certified addiction specialists, who re not psychiatrists, but
have stated they will not reimburse Centerstone for any
medication management services rendered. In this case, the
payer/insurance company claimed that the addiction specialist
is not categorized under the correct taxonomy code, and noted
that in order to be eligible for reimbursement, the addiction
specialist would need to be categorized under taxonomy code
2084A0401X, which requires a physician to be a psychiatrist.
Thus, even though this entity will credential ABAM certified
physicians (who are not psychiatrists), they will not reimburse
for their services.
Therefore, Congress should urge CMS to issue swift guidance to all
Medicare Managed Care entities, stating that board certified addiction
specialists in good standing with appropriate medical boards shall be
credentialed within 30 days of submitting an application, and be
reimbursed for their services.
``How do we get our deployment models to catch up to the new and
emerging needs of our population?''
b Encourage the use of telehealth services
Encouraging the use of telehealth services can go a long way
towards treating rural populations. Telehealth has a dual purpose of
both connecting patients to lifesaving care that may have previously
been beyond their physical reach, and also of reducing the effects of a
behavioral health workforce shortage. Moreover, aging researchers have
found that, ``isolated seniors had a 59 percent greater risk of mental
and physical decline than their more social counterparts.'' \10\
Telehealth can help seniors get the care they need while continuing to
live in communities that are important to them.\11\ As such, telehealth
may play an instrumental role in providing a layer of connectivity for
some seniors, or minimally reducing the burden for care takers so they
are better equipped to provide on-going care.
---------------------------------------------------------------------------
\10\ https://www.agingcare.com/articles/loneliness-in-the-elderly-
151549.htm.
\11\ https://www.aarp.org/content/dam/aarp/ppi/2018/05/using-
telehealth-to-improve-home-based-care-for-older-adults-and-family-
caregivers.pdf?utm_source=Telehealth+Enthusiasts&utm
campaign=e0e7_a09bcc-
EMAIL_CAMPAIGN_2018_06_01_09_59&utm_medium=email&utm_
term=0_ae00b0e89a-e0e7a09bcc-353221013.
Lawmakers should fully optimize the value of our behavioral health
workforce by affording them a wider latitude to treat SUD patients in
hard-to-reach areas via telemedicine.\12\ The Ryan Haight Act makes it
illegal for a practitioner to issue a prescription for a controlled
substance via telemedicine without having first conducted at least one
in-person medical evaluation of the patient. There are currently three
FDA-approved medications for the treatment of opioid use disorder:
naltrexone, methadone, and buprenorphine.\13\ These medications are
recognized by the National Institute of Drug Abuse,\14\ American
Society of Addiction Medicine,\15\ and the Substance Abuse and Mental
Health Services Administration \16\ as essential tools in responding to
the opioid epidemic. Under current law, non-SAMHSA practitioners who
wish to prescribe Suboxone (brand name for buprenorphine) to a patient
they are treating via telemedicine would need to first perform an in-
person evaluation, had they not already done so. Following this
regulatory mandate for buprenorphine prescribing, however, may be
overly burdensome in many circumstances, and may prevent many patients
from receiving life-saving treatment. Thus, we believe that licensed
community mental health and addiction providers, who follow nationally
recognized models of treatment, should gain access to a special
registration process so that they may register with the DEA to
prescribe substances now commonly embraced in MAT practice, without a
prior in-person patient/provider encounter. To bring about this end, we
support the Special Registration for Telemedicine Clarification Act of
2018 (H.R. 5483), which calls for the promulgation of interim final
regulations on the topic of special registration for health care
providers to prescribe controlled substances via telemedicine without
the initial in-person contact. Section 401 of the Opioid Crisis
Response Act of 2018 (S. 2680) would do the same.
---------------------------------------------------------------------------
\12\ https://homehealthcarenews.com/2018/05/cms-launches-rural-
health-strategy-with-telehealth-aims/.
\13\ Dr. McCance-Katz, oral testimony, November 13, 2017, http://
www.aei.org/events/the-opioid-crisis-what-can-congress-do-a-
conversation-with-house-committee-on-energy-and-commerce-chairman-greg-
walden-r-or/.
\14\ https://www.drugabuse.gov/publications/research-reports/
medications-to-treat-opioid-addiction/overview.
\15\ https://www.asam.org/docs/default-source/practice-support/
guidelines-and-consensus-docs/asam-national-practice-guideline-
supplement.pdf?sfvrsn=24#search="medication assisted treatment".
\16\ https://www.samhsa.gov/medication-assisted-treatment/
treatment#medications-used-in-mat.
We know that telehealth can bridge the gap of distance and stigma
by allowing beneficiaries to receive care when and where they need
it.\17\ A Medicare provider can only be reimbursed for telehealth
services if the patient is located at a specified ``originating
site''--a restriction that clearly limits the purpose and benefits of
telehealth. The Access to Telehealth Services for Opioid Use Disorders
Act (H.R. 5603) would authorize the Secretary to, through rulemaking,
waive originating site and geographic restrictions for the delivery of
telehealth to Part A beneficiaries with a substance use disorder (SUD)
diagnosis, or to a beneficiary with a SUD and serious mental illness
(SMI) diagnosis effective January 1, 2020. By essentially waiving the
``originating site'' restriction for certain Medicare patients, this
bill will expand the number of providers that are able to treat the
elderly in their own homes, and will significantly improve access to
addiction treatment services to these patients.
---------------------------------------------------------------------------
\17\ https://www.healthitnow.org/press-releases/2018/5/29/blog-
honor-mental-health-month-by-rededicating-commitment-to-technology-
enabled-treatment-and-support.
---------------------------------------------------------------------------
b Encourage the use of peer support services
Peer support services are currently accepted as evidence-based
practices by both CMS and SAMHSA. Research indicates that use of peer
supports leads to significant decreases in substance use, symptom
improvement, and better management of patients' own conditions.\18\
Connecting with a peer support specialist also helps individuals feel
less alone in their challenges and has also been positively linked with
addressing social isolation for older adults.\19\ These outcomes are
largely achieved by a sense of trust and by the non-judgmental attitude
peers exhibit towards patients. These services are currently
reimbursable under most state Medicaid programs. Therefore, Centerstone
recommends that Congress fully optimize the value of our behavioral
health workforce by recognizing certified peer supports within the
Medicare program.
---------------------------------------------------------------------------
\18\ https://www.ncbi.nlm.nih.gov/pubmed/26882891.
\19\ http://clri-ltc.ca/2018/04/the-power-of-peer-support/.
---------------------------------------------------------------------------
b Enable providers to access full patient records
The Confidentiality of Substance Use Disorder Patient Records
rule--42 CFR Part 2--is a stringent rule that prevents providers from
systematically treating OUD/SUD patients in reliance on complete and
accurate patient histories. In moving towards more robust integrated
care models where every member of a patient's treatment team needs to
understand a patient's full medical/SUD history, Part 2 stands as a
hindrance to whole-person, safe care. Part 2 has never been applied
universally: only federally assisted alcohol and drug abuse programs
providing SUD diagnosis or treatment are subject to the stringent
Confidentiality of Substance Use Disorder Patient Records rule--42 CFR
Part 2.\20\, \21\ Part 2 prevents these federally funded
providers from accessing a patient's full substance use history without
the patient's prior written consent. In contrast, non-federally
assisted providers throughout the country are governed only by HIPAA.
Today, SUD is the only condition not governed by HIPAA. Failure to
update Part 2 has weakened our Nation's ability to tackle our addiction
problems. Stigmatized conditions like mental health disorders and AIDS
are governed under HIPAA--care for both of those conditions are
improving.
---------------------------------------------------------------------------
\20\ https://www.samhsa.gov/sites/default/files/faqs-applying-
confidentiality-regulations-to-hie.pdf.
\21\ http://www.jhconnect.org/wp-content/uploads/2013/09/42-CFR-
Part-2-final.pdf.
The bipartisan Opioid Prevention and Patient Safety Act (OPPS Act)
(H.R. 5795/S. 1850) would function to align Part 2 with HIPAA's consent
requirements for the purposes of treatment, payment, and healthcare
operations (TPO), which would allow for the appropriate sharing of SUD
records, among covered entities, to ensure persons with OUD and other
SUDs receive the integrated care they need. The bill further clarifies
that SUD records may not be used as evidence in any criminal
proceedings, may not be used for any purposes in federal agency
proceedings, may not be used for law enforcement purposes at any agency
level, and may not be used to apply for a warrant, except where a
patient has provided consent, or when a court order has been issued.
Penalties for violations are those outlined in the Public Health
Service Act. Discrimination is prohibited in treatment, housing,
employment, and courthouse settings. No recipient of federal funds may
discriminate against affected individuals. HITECH Notification of
Breach provisions apply to the same extent as they apply to all other
breaches of protected health information. (For a visual representation
of Part 2 intricacies, please see attached document entitled:
``Congress Considers Medical Privacy Overhaul to Combat the Opioid
---------------------------------------------------------------------------
Epidemic.'')
We at Centerstone aim to do everything we can to evaluate what is
most appropriate for each individual on a case-by-case basis in order
to provide the highest quality, individually-tailored care. Without a
full understanding of the challenges an individual is facing, however,
the care of even the best-intentioned providers will fall short of the
care they could offer if they understood the whole person. Therefore,
we strongly urge lawmakers to pass legislation that would align 42 CFR
Part 2 with HIPAA for the purposes of treatment, payment, and health
care operations.
``How can we promote higher quality care?''
b Incent reimbursement models that promote integrated, whole-
personcare, as opposed to fragmented care
Currently, in many of our states, Medicare and HMOs do not
reimburse for more than one service per day. In other words, if a
patient has a doctor's visit and a group therapy session on the same
day, only one service will be reimbursed. This means that patients with
co-occurring physical and behavioral health conditions who may need a
medical evaluation followed by an individual therapy session will
typically be required to make multiple appointments for these services
on separate days so that providers do not incur a financial loss. This
not only creates tremendous inefficiencies in the cost of delivering
high quality, integrated care, but also makes treatment more burdensome
for patients. Multiple appointments can be impossible for some patients
to keep due to school and work schedules, family responsibilities, or
transportation challenges (as in the case of many rural citizens).
It is important that Congress incent reimbursement models that
promote integrated, whole person care, such as Certified Community
Behavioral Health Clinics or Health Homes. These care models are
designed to be the antithesis to disjointed care. Through Centerstone's
implementation of grant funded patient centered health homes designed
for consumers with co-occurring and complex conditions, where patients
receive the appropriate care as the need arises, we have experienced a
lower health care spend per capita in comparison to non-
integrated care models. More importantly, 84% of our patients with high
blood pressure saw lower readings after 12 months; recipients reported
a 56% improvement in anxiety levels; 53% showed improvement in general
health. Additionally, we saw a significant reduction in emergency room
utilization. Through this model, we have been able to provide
contiguous care to consumers who had previously only experienced
fragmented, expensive care. Our participants awarded this model a 98%
approval rating. We continue to capture cost savings through integrated
health home pilots. Therefore, we recommend that Congress prioritize
legislation that will help break down barriers for same day billing for
behavioral health providers in Medicare and, more generally, incent
reimbursement models that promote integrated, whole-person care such as
Certified Community Behavioral Health Clinics as identified in the
Excellence in Mental Health and Addiction Treatment Expansion Act (H.R.
3931/S. 1905).
c Amend the appeals process so that reimbursement practices follow
federal parity laws
When a claim is denied, an appeal may be filed. Appeals are
supposed to take up to 30 days, but may take longer. A successful
appeal typically involves multiple phone calls with the managed care
entity and our treatment team, including with one of our treating
psychiatrists or addiction specialists, followed by a submission of the
client record. With most of our facilities facing workforce shortages,
dealing with the appeals process uses valuable provider time, which
would be better utilized serving patients.
Thus, we recommend that federal parity laws be strictly enforced so
as to guard against undue claims denials. Currently, many states lack
appropriate systems for tracking prior authorizations and denials
between coverage types (medical vs. behavioral health benefits).
Because states often lack the infrastructure to track parity, the full
extent of parity violations is unknown. Thus, even though there is
industry-wide consensus that the federal parity law goes systematically
unenforced, robust evidence detailing the extent of medical/behavioral
health discrepancies is currently missing. We suspect if the parity law
was fully and faithfully implemented, we would see a steep reduction in
administrative burden.
We appreciate the opportunity to submit comments for the record on
the topic of improving the quality of care for rural Americans. Kindly
let us know if you have any questions or comments, or wish to discuss
any of these items further. We look forward to collaborating with you
in the future.
Sincerely,
Lauren McGrath, MSSW
Vice President of National Policy, Centerstone
Monica Nemec, JD, MPP
Director of National Policy, Centerstone
Medicare Standards for Licensed Mental Health Counselors, Licensed
Clinical Social Workers, and Licensed Marriage and Family Therapists
Social Security Act Sec. 1861(hh)(l) sets out the education,
experience, and licensure requirements for mental health professionals'
participation in Medicare. Clinical social workers are recognized as
Medicare providers, but mental health counselors and marriage and family
therapists are not. The text below is taken directly from Social
Security Act Sec. 1861(hh)(1) for social workers and the legislation
adding mental health counselors and marriage and family therapists to
the law.
------------------------------------------------------------------------
Licensed Licensed Mental Licensed
Clinical Social Health Marriage and
Worker Counselor Family Therapist
------------------------------------------------------------------------
Current Medicare Yes No No
Provider:
------------------------------------------------------------------------
Education: Possesses a Possesses a Possesses a
master's or master's or master's or
doctoral doctoral degree doctoral degree
degree in in mental which qualifies
social work health for licensure
counseling or a or
related field certification
as a marriage
and family
therapist
pursuant to
State law
------------------------------------------------------------------------
Experience: Two years of Two years of Two years of
post-graduate post-graduate post-graduate
supervised supervised clinical
clinical mental health supervised
social work counselor experience in
experience practice marriage and
family therapy
------------------------------------------------------------------------
Licensure Licensed or Licensed or Licensed or
Requirement: certified to certified as a certified as a
practice as a mental health marriage and
clinical counselor family
social worker within the therapist
by the State State of within the
in which the practice State of
services are practice
performed
------------------------------------------------------------------------
State Licensed 193,000 144,500 62,300
Providers:
------------------------------------------------------------------------
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
______
Medicare Dependent Rural Hospital Coalition
500 N. Capitol Street
Washington, DC 20001
www.mdhcoalition.com
Statement for the Record
On behalf of the Medicare Dependent Rural Hospital Coalition, thank you
for holding the May 24, 2018 hearing entitled, ``Rural Health Care in
America: Challenges and Opportunities.'' As discussed at the hearing,
there are a number of challenges to providing high-quality health care
in rural communities. The Coalition is pleased to submit testimony for
the record highlighting some of these challenges and offering
collaborative solutions to ensure access to health care in rural areas
is maintained and improved.
Created in 2011, the Medicare Dependent Rural Hospital (MDH) Coalition
is an informal coalition of affected and concerned hospitals from
around the country who wish to see the MDH program extended and
enhanced. According to a recent U.S. Department of Health and Human
Services (HHS) report, rural America is older than the urban population
(18.2 percent of rural individuals are 65 and over, compared to 13.7
percent in the U.S. population overall).\1\ This statistic demonstrates
the importance of the Medicare program--and to sustaining the rural
health care infrastructure--to rural communities nationwide. The MDH
Coalition is committed to ensuring that lawmakers and policymakers in
Washington, DC understand just how critical this program is to the
rural population.
---------------------------------------------------------------------------
\1\ ``Rural Hospital Participation and Performance in Value-based
Purchasing and Other Delivery System Reform Initiatives,'' Assistant
Secretary for Planning and Evaluation, U.S. Department of Health and
Human Services, Issue Brief, October 19, 2016.
---------------------------------------------------------------------------
About MDHs
The Medicare-Dependent, Small Rural Hospital program was established by
Congress in 1990 with the intent of supporting small rural hospitals
for which Medicare patients make up a significant percentage of
inpatient days or discharges. To qualify as a MDH, a hospital must be:
(1) located in a rural area, (2) have no more than 100 beds, and (3)
demonstrate that Medicare patients constitute at least 60 percent of
its inpatient days or discharges.
Because they primarily serve Medicare beneficiaries, MDHs rely heavily
on Medicare payment to sustain hospital operations. As such, Congress
acknowledged the importance of Medicare reimbursement to MDHs and
established special payment provisions to buttress these hospitals.
Congress recognized that if these hospitals were not financially viable
and failed, Medicare beneficiaries would lose an important point of
access to hospital services. Today, more than 150 hospitals nationwide
have MDH status.
Challenges Facing MDHs
When examining rural health challenges, the Coalition believes it is
important to address unique challenges facing MDHs that may impact the
quality of, and access to, essential health care services. Some of
these issues are described below.
Older and Aging Patient Population: MDHs serve a disproportionate
number of Medicare beneficiaries. In 2018, the most recent year for
which Medicare cost report data is available, Medicare patients
(excluding Medicare Advantage patients) accounted for 54 percent of MDH
patient days, significantly more than the 42 percent average at other
rural hospitals, as well as the 34 percent average at urban
hospitals.\2\ Medicaid enrollees also account for a substantial
percentage of hospital discharges at MDHs, although empirical data is
not available to quantify that.
---------------------------------------------------------------------------
\2\ Centers for Medicare and Medicaid Services, FY 2018 IPPS Impact
File, September 29, 2017.
Congress has recognized that MDHs are vitally important to the Medicare
program, as evidenced by the number of Medicare patients they serve. If
an MDH fails, Medicare beneficiaries lose access to an important source
of hospital services. As a result, Congress has repeatedly extended the
MDH designation since the program's beginning. Most recently, the
Balanced Budget Act of 2018 extended the MDH program for five years,
---------------------------------------------------------------------------
until October 1, 2022.
Narrow Operating Margins: In its March 2018 Report to Congress, the
Medicare Payment Advisory Commission (MedPAC) found that rural IPPS
hospitals (excluding Critical Access Hospitals (CAHs)) had a negative
7.4 percent overall Medicare margin.\3\
---------------------------------------------------------------------------
\3\ ``Hospital inpatient and outpatient services: Assessing payment
adequacy and updating payments,'' MedPAC, March 2018, http://
www.medpac.gov/docs/default-source/reports/mar18
_medpac_ch3_sec.pdf?sfvrsn=0.
Because of the high percentage of Medicare (and Medicaid) patients,
MDHs lack the ability to offset costs through non-governmental payer
patients. Whereas larger rural and urban facilities can shift costs to
make up for negative Medicare margins, MDH do not have that same
---------------------------------------------------------------------------
flexibility.
While MedPAC examines Medicare margins by hospital type each year, it
does not examine Medicare margins by specially designated Medicare
hospital type. A Government Accountability Office report was included
in the Bipartisan Budget Act of 2018 that would report data on Medicare
margins for MDHs. However, this report is not due to Congress until
early-to-mid 2020.
If Congress is evaluating the ongoing need for the MDH program, it
should direct MedPAC to include hospital margin data on hospitals with
special designations under Medicare, including MDHs.
Recommendations for Congressional Action
Overall, MDHs treat an older, rural patient population with limited
financial resources. This makes these rural providers dependent on
accurate and appropriate payment policies. To ensure MDHs are able to
continue to provide high-quality health care to rural communities,
there are six policy changes the Coalition recommends.
Recommendation One--340B Eligibility for MDHs: The 340B program has
been critical in expanding access to lifesaving prescription drugs to
low-income patients in communities across the country. Congress created
the 340B program with the mission of enabling its covered entities ``to
stretch scarce federal resources as far as possible, reaching more
eligible patients and providing more comprehensive services.'' The
program has been essential to helping hospitals and other health care
providers ensure that their patients get access to affordable
medications and quality health care.
Under the 340B program--which is administered by the Health Resources
and Services Administration (``HRSA'')--certain covered entities may
purchase outpatient drugs from manufacturers at discounted prices,
provided they comply with certain program requirements. Congress
designated certain provider types as covered entities because they each
fulfill a special role in serving low-income, special-needs, and
otherwise vulnerable populations. In 2010, Congress extended 340B
program eligibility by making it easier for freestanding cancer
hospitals, CAHs, Rural Referral Centers (RRCs) and Sole Community
Hospitals (SCHs) to participate as well.
Many 340B participating hospitals--particularly rural safety net
facilities--are indispensable to their communities, and the discounts
they receive through the 340B program play an essential role in
allowing these facilities to provide care to otherwise underserved
communities.
Under this change, freestanding cancer hospitals and CAHs are eligible
by virtue of their status. RRCs and SCHs are not automatically
eligible, but Congress made it easier for them to qualify by lowering
the DSH threshold to eight percent for these facilities. Currently,
MDHs are the only specially recognized Medicare provider type not
eligible for 340B based on status or through a lowered threshold. Given
Congress has recognized the unique role all of these rural providers
play in providing care to rural communities, the eight percent
threshold qualifying level should be extended to MDHs.
Recommendation Two--Extend 340B Exception to MDHs: Congress should
examine the impact of the Center for Medicare & Medicaid Services (CMS)
drug payment policy implemented via the CY2018 OPPS rulemaking, but in
the meantime take steps to prevent further harm to rural providers. As
the Committee is aware, beginning in 2018, CMS instituted a policy
change reducing the amount Medicare pays hospitals for drugs covered
under Part B of the program when those drugs are purchased through the
340B program. Specifically, CMS reduced payment from Average Sales
Price (ASP) plus six percent to ASP minus 22.5 percent. While CMS
excepted rural SCHs from the payment adjustment, MDHs are subject to
the adjustment. CMS cited hospital operating margins, closure rates of
rural hospitals, low-volume, and existing special payment designations
among reasons for excepting rural SCHs, but not other rural safety net
providers.
MDHs also play a vital role in the rural health care infrastructure,
and exhibit some of the very same characteristics CMS used to justify
excepting SCHs from the cuts. Congress should except MDHs from the
payment cuts in the OPPS as well.
Recommendation Three--Update and Align MDH Payment Rate: As the
Committee knows, the primary benefit of MDH status is eligibility for
payments based on hospital-specific payment rates. Under Medicare's
Inpatient Prospective Payment System (IPPS), hospitals with MDH status
receive payments based on the federal rate or hospital-specific rate,
whichever is greater. If the hospital-specific rate is greater, the MDH
is paid the federal rate plus 75 percent of the difference between the
hospital-specific rate and federal rate.
There are two updates to the MDH payment Congress should consider.
First, an MDH's hospital specific rate is based on the hospital's costs
in 1982, 1987 or 2002. We propose that Congress add a more current cost
year--e.g., 2016 or 2017--for purposes of determining the target
amount.
Second, MDHs should be afforded the same payment benefits as SCHs. As
mentioned above, if the hospital-specific rate is greater, MDH's are
paid 75 percent of the difference between the hospital-specific rate
and the federal rate. SCH payments use the same formula, but receive
100 percent of the difference. MDHs and SCHs both serve as safety net
providers for rural communities. Additionally, like SCHs, MDHs play a
vital role in caring for patients facing more complex and chronic
health issues, but MDHs lack the ability to cross-subsidize with
additional private payer payments. Congress should consider closing the
gap in the payment rate between MDHs and SCHs by increasing the payment
rate difference to 100 percent for MDHs.
Recommendation Four--Make MDH Designation Permanent: Because MDHs serve
a disproportionate number of Medicare beneficiaries, MDHs rely on
Medicare payments for delivering patient care to these beneficiaries
and their broader communities. MDH status and the associated payment
protections are critical to the continued viability of these
facilities.
The Bipartisan Budget Act of 2018 extended the MDH program for 5 years.
While the Coalition appreciates this extension, providing short-term
extensions is not a long-term solution. As such, we support the Rural
Hospital Access Act (S. 872), which would make the MDH program
permanent, and urge Congress to make the MDH program permanent.
Further, as the program gets closer to lapsing, the cost for renewal
will increase. If Congress considers this change well in advance of the
next expiration in 2022, it would be less costly to the government and
taxpayers. It also would provide MDHs more financial stability, the
ability to plan effectively and continue to provide high-quality care.
Congress should pass this legislation.
Recommendation Six--Extend 7.1 Percent OPPS Payment Adjustment to MDHs:
Under current CMS policy, Medicare payments to rural SCHs for
outpatient services are increased by 7.1 percent. CMS makes this
adjustment because it found, pursuant to a study required by Congress,
that, compared to urban hospitals, SCHs have substantially higher
costs, and need a payment adjustment to be comparably treated under the
outpatient PPS. CMS was not directed to include MDHs in this study, and
has not examined this issue on its own. Congress should direct CMS to
study the difference in costs by ambulatory payment classification
(APC) between MDHs and hospitals in urban areas and make adjustments
based on the findings.
Conclusion
As the Committee continues its examination of rural health challenges,
we urge thoughtful attention and consideration be given to MDHs. As
described above, these hospitals play essential roles in providing
high-quality health care to rural communities and Medicare
beneficiaries. We are available for questions, further comments, and
additional information. Please feel free to reach out to Eric Zimmerman
([email protected] ) or Rachel Stauffer
(rstauffer@mcdermottplus.
com).
______
National Association of Chain Drug Stores (NACDS)
1776 Wilson Blvd., Suite 200
Arlington, VA 22209
703-549-3001
www.nacds.org
Introduction
The National Association of Chain Drug Stores (NACDS) thanks Chairman
Hatch, Ranking Member Wyden, and members of the Committee on Finance
for holding the hearing on ``Rural Health Care in America: Challenges
and Opportunities.''
NACDS and the chain pharmacy industry are committed to partnering with
Congress, HHS, patients, and other healthcare providers to improve the
quality, access, and affordability of health care services in
underserved parts of the county, particularly in rural America. NACDS
represents traditional drug stores, supermarkets and mass merchants
with pharmacies. Chains operate over 40,000 pharmacies, and NACDS'
nearly 100 chain member companies include regional chains, with a
minimum of four stores, and national companies. Chains employ nearly 3
million individuals, including 152,000 pharmacists. They fill over 3
billion prescriptions yearly, and help patients use medicines correctly
and safely, while offering innovative services that improve patient
health and healthcare affordability. NACDS members also include more
than 900 supplier partners and over 70 international members
representing 20 countries. Please visit www.NACDS.org.
As the face of neighborhood health care, chain pharmacies and
pharmacists work on a daily basis to provide the best possible care and
the greatest value to their patients with respect to access to critical
medications and pharmacy services. We help to assure that patients are
able to access their medications and take them properly. NACDS believes
retail pharmacists can play a vital role in improving access to
affordable, quality health care in rural areas of the country. As this
Committee examines the challenges and opportunities related to rural
health care in America we offer the following for your consideration.
Pharmacist Provider Status
As the U.S. healthcare system continues to evolve, a prevailing issue
will be the adequacy of access to affordable, quality healthcare. The
national physician shortage coupled with the evolution of health
insurance coverage will have serious implications for the nation's
healthcare system. Access, quality, cost, and efficiency in healthcare
are all critical factors--especially to the medically underserved and
those in rural areas. Significant consideration should be given to
policies and initiatives that enhance health care capacity and
strengthen community partnerships to offset provider shortages in
communities with medically underserved populations.
Pharmacists play an increasingly important role in the delivery of
services, including key roles in new models of care beyond the
traditional fee-for-service structure. In addition to medication
adherence services such as medication therapy management (MTM),
pharmacists are capable of providing many other cost-saving services,
subject to state scope of practice laws. Examples include access to
health tests, helping to manage chronic conditions such as diabetes and
heart disease, and expanded immunization services. However, the lack of
pharmacist recognition as a provider by third-party payors, including
Medicare and Medicaid, limits the number and types of services
pharmacists can provide, even though they are fully qualified to do so.
Retail pharmacies are often the most readily accessible healthcare
provider. Research shows that nearly all Americans (89 percent) live
within five miles of a retail pharmacy. Such access is vital in
reaching the medically underserved.
NACDS encourages your support for S. 109, the Pharmacy and Medically
Underserved Areas Enhancement Act, which will allow Medicare Part B to
utilize pharmacists to their full capability by providing underserved
beneficiaries with services, subject to state scope of practice laws,
not currently reaching them. This important legislation would lead not
only to reduced overall healthcare costs, but also to increased access
to healthcare services and management of medications.
Combating the Opioid Crisis
Not only can pharmacists play a vital role in ensuring access to care
for those who reside in rural areas, but pharmacists can also play an
important role in helping combat the opioid crisis. As such, NACDS
supports the expansion of community-based services, such as enhanced
roles for retail community pharmacists in identifying and treating
those with opioid addiction, as well as community-based programs in
which retail community pharmacists educate consumers on the dangers of
opioid abuse and addiction.
This can be accomplished by recognizing the value pharmacists play as a
member of the healthcare team and utilizing them at the top of their
training in fighting the opioid crisis. For example, pharmacists could
play a greater role in:
Providing greater access to community-based Screening, Brief
Intervention, and Referral to Treatment (SBIRT) activities. SBIRT is an
evidence-based practice used to identify, reduce, and prevent
problematic use, abuse, and dependence on alcohol and illicit drugs and
includes a referral to treatment for those in need. Pharmacists are
currently recognized as providers of this service in at least one state
Medicaid program.
Providing essential screenings and immunizations related to
Hepatitis B, Hepatitis C, HIV, Tuberculosis (TB), and depression to
improve the population health of communities. For example, one
community pharmacy has partnered with a State health department to
provide HIV screening/testing in their pharmacies. The pharmacy can
provide these services at a lower cost, and patients find the
pharmacies to be less stigmatizing locations than other places to
receive screenings.
Increasing access to Naloxone, a medication designed to rapidly
reverse opioid overdose. Several states have recognized the importance
of ensuring quick access to this life-saving medication and have
employed various approaches to make it easier for pharmacists to
provide naloxone to patients, such as:
Establishing authority for pharmacists to
``furnish'' naloxone without a prescription;
Allowing pharmacists to dispense naloxone in
accordance with a written statewide protocol; and
Employing the use of standing orders and/or
collaborative practice agreements between prescribing
practitioners and pharmacists.
Assisting physicians with opioid treatment program, which
provide medication-assisted treatment (MAT) for people diagnosed with
an opioid-use disorder. CMS recently recognized the importance of MAT
in its proposed FY 2019 Call Letter, when it stated `` . . . it is
imperative to also ensure that Medicare beneficiaries have appropriate
access to medication-assisted treatment (MAT).''
Increased use of pharmacogenomic testing to determine the right
pain medication and dosing. By performing pharmacogenetic testing,
personalized medicine allows patients to be prescribed with the right
drug to be administered for adequate pain control--to avoid
experiencing dose-dependent side effects or lack of drug efficacy. A
pain medication may alleviate pain for one patient and provide no
relief for another. Pharmacogenetic testing can help alleviate this
problem.
Conclusion
NACDS thanks the Committee for your consideration of our comments. We
look forward to working with policymakers and stakeholders on improving
rural healthcare through pharmacist services in Medicare Part B.
______
National Rural Health Association (NRHA)
The National Rural Health Association (NRHA) is pleased to provide
the Senate Finance Committee with testimony on the reforms necessary to
ensure the economic prosperity and healthy future of rural America. As
we watch our rural communities face the gravest health care crisis in
decades, we want to thank the Committee for holding a hearing devoted
to the opportunities and challenges facing rural health care. Please
know that we look forward to continuing this dialogue in the coming
months.
NRHA is a national nonprofit membership organization with a diverse
collection of 21,000 individuals and organizations who share a common
interest in rural health. The association's mission is to improve the
health of rural Americans and to provide leadership on rural health
issues through advocacy, communications, education and research. As
such, we recognize the important role that health care serves in the
economic development of rural communities across the country. The
economic needs of rural America are vastly different than those faced
by counterparts in other geographic and population settings. So too are
the health care challenges, and opportunities, for rural health care
providers.
Access to Quality Care Is Paramount
Access to quality, affordable health care is essential for the 62
million Americans living in rural and remote communities. Rural
Americans are more likely to be older, sicker and poorer then their
urban counterparts. Disparities both between urban and rural
communities, and within rural communities along lines of race, income,
and age, continue to widen. Further, access in rural America is impeded
by not only geography, but also by decreasing reimbursements, physician
shortages, and excessive regulatory burdens.
This is exacerbated by the increasing crisis of rural hospital
closures. Eighty-three rural hospitals have closed since 2010, and two
more will close later this month. 10,000 rural jobs have been lost as a
result and 1.2 million rural patients have lost access to local
community care. Even more concerning is that 673 rural hospitals are at
risk of closure, meaning that without Congressional action, 1 in 3
rural hospitals are financially vulnerable.
Medical deserts are appearing across rural America, leaving many of
our nation's most vulnerable populations without timely access to care.
Seventy-seven percent of rural counties in the United States are
Primary Care Health Professional Shortage Areas while nine percent have
no physicians at all. Rural seniors are forced to travel significant
distances for care, especially specialty services. In an emergency,
rural Americans travel twice as far as their urban counterparts to
receive care. As a result, while 20 percent of Americans live in rural
areas, 60 percent of trauma deaths occur in rural America.
In Rural America, One Size Cannot Fit All
In rural America, health care is a pillar of the community. It
helps to create and foster a sustainable and livable environment for
rural Americans, and without health care, without a hospital, a rural
community will crumble. As John Henderson, CEO of Childress Regional
Hospital in Texas explains, ``Hospitals, schools, churches. It's the
three-legged stool. If one of those falls down, you don't have a
town.''
A hospital is essential to a community, providing jobs and
fostering economic growth with a healthy workforce and a source of care
in case of an emergency. As the landscape of rural America and the face
of health care throughout our nation change we ne d to adapt our ideas
about care provision. Examining the diverse needs of communities
requires us to create policy that can address a wide array of
challenges to help a diverse group of providers.
Growing Health Disparities in Rural Communities
The health disparities between rural populations and their urban
counterparts are pronounced and growing rapidly. 18% of rural
populations are living below the poverty threshold, compared to less
than 16% in urban areas (HRSA Health Equity Report 2017), and health
outcomes and income are inextricably linked. According to the Center
for Disease Control's (CDC) Morbidity and Mortality Weekly Report
(MMWR), rural populations are significantly more likely to report poor
or fair health outcomes. Additionally, rural communities have
significantly higher rates of suicide, substance use disorder, heart
disease, cancer, chronic respiratory disease, and unintentional injury;
and these conditions are more likely to result in unnecessary deaths
because of lack of treatment or lack of access to appropriate care.
If you are a member of a minority group in rural America, these
disparities are even more pronounced. A recent study in the Journal of
Rural Health underscored the alarming extent of these challenges. Using
data from the National Center for Health Statistics, and adjusting for
age, the researchers found that rural whites have 102 more deaths per
100,000 members of the population than their urban counterparts. Rural
blacks have 115 more deaths per 100,000 than their urban counterparts.
The number of excess rural deaths from 1986 to 2012 was 694,000 for
whites and 53,000 for blacks.
These disparities are visible even at birth. Maternity care
shortages plague rural communities, and the most vulnerable communities
are the most likely to be without obstetrics. Rural counties with
higher percentages of African American women were more than 10 times as
likely as rural counties with higher percentages of white women to have
never had hospital-based obstetric services and more than 4 times as
likely to have lost obstetric services between 2004- 2014, when more
than 200 rural maternity wards closed their doors.
As Health Disparities Worsen, So Does the Rural Hospital Closure Crisis
Between 2017 and 2018, the number of rural hospitals operating at a
loss rose from 40 to 44%. As stated earlier, 83 rural hospital have
closed since 2010 and 673 rural hospitals are currently at financial
risk. Three more rural hospitals announced in May that they will soon
close their doors.
Rural hospitals are closing for a myriad of reasons, including
lower patient volumes in certain rural communities. However, the most
significant reason of increased financial risk is the cumulative
reduction in reimbursement rates in Medicare, Medicaid and private
insurers. Rural hospitals serve more Medicare patients (46% rural vs.
40.9% urban), thus across-the-board Medicare cuts do not have across
the board impacts. According to MedPAC Average Medicare margins are
negative, and under current law they are expected to decline in 2016
has led to 7% gains in median profit margins for urban providers while
rural providers have experienced a median loss of 6%. Since 2013 many
hospitals have seen Medicare reduce the share of beneficiaries' unpaid
debt it covers for out-of-pocket costs; the rate-dropped from 70% to
65%. This cut was even deeper for Critical-Access Hospitals, which went
from having 100% of that debt covered down to 65%.
Continued changes to bad debt, sequestration, and Medicare
reimbursement cuts have put more and more hospitals at risk. As more
rural hospitals close, the number of rural communities at risk grows.
Most rural closures occurred in states that did not expand Medicaid,
and with reductions in the Disproportionate Share Hospital (DSH)
payments that helped hospitals cover bad debts incurred by serving high
rates of uninsured people, these hospitals could not survive.
But full closure of a hospital is not the only concern. Across the
country, hospitals are losing their obstetrics units--between 2004 and
2014 more than 200 rural hospitals stopped providing labor and delivery
services. The most vulnerable are placed at greater risk: rural
counties with higher percentages of African American women were more
than 10 times as likely as rural counties with higher percentages of
white women to have never had hospital-based obstetric services and
more than 4 times as likely to have lost obstetric services between
2004-2014.
As access to care in rural communities disappears, we need the
support of Congress now more than ever to stop the flood of hospital
closures and create an environment in which innovation can thrive.
Economic Impact of Rural Providers
Rural health care providers are not only critically important for
the health of rural Americans, the providers are critically important
for the economic health of rural communities.
Much of rural America was left behind in the economic recovery.
According to the United States Department of Agriculture (USDA), rural
counties were losing 200,000 jobs per year and the rural unemployment
rate stood at nearly 10 percent during the Great Recession. Since then,
the economic recovery that has positively changed the face of many
other communities has not come to rural America. In fact, 95% of the
jobs that have returned since the end of the Great Recession have been
to urban, not rural areas.
While many industries in rural America have been shrinking for a
wide variety of reasons, health care is an industry with the potential
to reverse declining employment. As factory and farming jobs decline,
the local rural hospital often becomes the hub of the local business
community--not only offering critical life-saving services, but also
representing as much as 20 percent of the rural economy.
Simply put, hospitals provide a large number of jobs. The economic
well-being of rural American towns depends on a healthy rural economy,
which is anchored by the local rural hospital and local providers. The
average Critical Access Hospital (CAH) creates 195 jobs and generates
$8.4 million in payroll annually. Rural hospital s are often the
largest or second-largest employer in a rural community (along with the
school system). In addition, even a single rural primary care physician
can generate 23 jobs and more than $1 million in annual wages, salaries
and benefits.
Because hospitals provide so many jobs, it follows that their
closure has a devastating effect on employment. If we allow the 673
additional vulnerable rural hospitals to shut their doors, 99,000
direct health care jobs and another 137,000 community jobs will vanish.
A critical component of maintaining economic stability in rural
communities is ensuring that rural hospitals and other health care
providers are able to remain in their communities. Protecting rural
hospitals from closure is an immediate step that can be taken to
prevent significant job loss in rural communities.
Workforce Shortages Continue to Plague Rural America
Workforce challenges also exist in rural America. The rural health
landscape, with its uneven distribution and shortage of health care
professionals, is faced with significant problems in recruiting and
retaining a trained health care workforce. This is compounded by the
disparity in federal reimbursement for rural providers, which if
addressed, would not only improve the recruitment and retention of
rural physicians, but would also stabilize the rural economy.
Currently, 77 percent of the 2,050 rural counties in the United
States are designated as primary care Health Professional Shortage
Areas. The Association of American Medical Colleges projects a shortage
of 124,000 full-time physicians by 2025. The Council on Graduate
Medical Education projects a shortage of 85,000 physicians in 2020,
which is approximately 10% of today's physician workforce. However, the
most severe workforce shortages are seen among mental and behavioral
health professionals, oral health providers, and obstetrics and
gynecology specialists.
Providers are more likely to practice in a rural setting if they
have a rural background, participate in a rural training program (RTT
Technical Assistance Program) and have a desire to serve rural
community needs. The RTT Technical Assistance Program identified that
residents training in rural training track residency programs were
about twice as likely to practice in rural areas following graduation
than family medicine graduates overall. Investments in rural
distributed medical education are supported by such programs as Area
Health Education Centers (AHEC), and supported by organizations such as
the RTT Collaborative, a not-for-profit sustainable result of the RTT
Technical Assistance Program.
Distributed medical education campuses across rural states and
rural America then become the platform for workforce initiatives that
develop infrastructure to support quality healthcare delivery and
produce economic value. Graduate medical education regulatory reform
that allows for common sense investment specifically allowing for
education of physicians in rural hospitals is one example of how to
address rural economic development and workforce shortages in one
action, while improving quality and delivering cost-saving healthcare.
Rural Provider Challenges--Geographic Diversity Effects Operating
Margins
We see geographic diversity in hospital operating margins, provider
shortages, hospital closures, and other aspects of rural health care
provision. All rural hospitals struggle because of multiple payment
cuts that have caused Medicare margins that are currently below the
cost of providing care according to MedPAC. While opportunities to
innovate can keep the cost of providing care down, NRHA supports
reimbursement rates that ensure rural providers have the resources
necessary to provide vital care for their communities. Keeping rural
PPS hospitals and Critical Access Hospitals (CAHs) open when possible
provides cost-effective primary care delivery as well as economic
stability in rural communities across the nation. For communities that
no longer need a full service rural hospital, new models can allow them
to right size their hospital to meet the needs of the community.
While all rural communities have commonalities, each possesses
needs specific to the demographics of the area and its location. The
needs of a small town on the plains of Nebraska are different than a
frontier community in Wyoming or a remote Appalachian community in West
Virginia. While the Midwest has seen changes that impact their rural
hospitals, southern communities with high poverty and racial
disparities have been particularly hard hit by the closure crisis.
While some policy changes can help every one of these rural areas,
different policy solutions may be necessary to address the wide range
of rural providers.
Breaking Down Regional Variance
A 2016 report from the Sheps Center at the University of North
Carolina studied the total margin of rural and urban hospitals by
geographic census area. The total margin metric, as explained by the
researchers, ``measures the control of expenses relative to revenues,
and expresses the profit a hospital makes as a proportion of revenue.
For example, a 5 percent margin means that a hospital makes five cents
of profit on every dollar of revenue.'' Medicare Dependent Hospitals,
Sole Community Hospitals, and rural PPS hospitals (denoted in the study
as ``ORH'') in the Midwest had a total margin of 2.96% in the Midwest
compared to only 1.43% in the South. Midwest CAHs had a total margin of
3.43% compared to just 0.19% in the South.
This difference may be in part due to the differences in the
populations that the two areas serve. The majority of rural hospitals
are located in the South, the region with the highest rates of poverty.
The second largest region is the Midwest, the region with the lowest
rates of poverty. Southern rural hospitals are more likely to serve
increasingly vulnerable populations--those with higher rates of
poverty, more racial minorities, and increasingly remote communities.
According to the United States Department of Agriculture (USDA)
Economic Research Service (ERS) ``the non-metro/metro poverty rate gap
for the South has historically been the largest.'' From 2012-2016, the
South had a non-metro poverty rate of 21.3%--higher than the Midwest
and Northeast and nearly 6 percentage points higher than in the South's
metro areas. During this period, 42.6% of the nation's non-metro
population lived in non-metro Southern areas and 51.1% of the nation's
non-metro poor lived in the South. More simply, ``non-metro counties
with a high incidence of poverty are mainly concentrated in the
South.'' Within the Southern region, those areas with the most severe
poverty are found in the Mississippi Delta and Appalachia, as well as
on Native American lands.
The USDA ERS also found more health care industry jobs in the
Midwest, which considering the role that a rural hospital has in
creating community-based jobs, may be a factor in considering poverty
rates. Between 2001 and 2015, rural counties with the most inpatient
healthcare facility jobs per resident were concentrated in the Upper
Midwest and Northern Great Plains. Regions with fewer inpatient
healthcare jobs per resident included the West, the Southern Great
Plains, and the South.
Developing Policy to Address National Needs
NRHA believes a multifaceted approach is necessary to address the
struggles of rural health care providers. This is why we have
continuously supported legislation such as H.R. 2957, the Save Rural
Hospitals Act. Passage of this bill will provide immediate relief to
rural hospitals by stopping the onslaught of reimbursement cuts that
have hit rural hospitals. Without increasing reimbursement rates, it
will stabilize payments and stop rural hospital closures. It will also
create a new health care delivery model with the critical flexibility
to be adjusted as necessary to fit the varied needs in rural
communities. That being said, we believe that any legislation passed
should include three pieces and accomplish two goals: stabilization and
innovation.
The first prong is ensuring rural providers' reimbursement rates
are sufficient to allow them to keep their doors open and provide
critical community care.
The second prong is supporting measures that reduce the cost of
providing care including regulatory relief efforts that reduce costs
without negatively impacting patient care.
And the third prong is bolstering new models that allow communities
to retain necessary access to local care including a local emergency
room while right sizing their facilities to flexibly meet the needs of
the specific community.
Together, these policies can all begin to bring rural health care
into the 21st Century and ensure its successful future. We look forward
to working with the Senate Finance Committee moving forward to develop
legislation that will support innovation and increase opportunities for
care in rural America.
______
3280 Cherry Oak Lane, Suite 100
Cumming, GA 30041
www.hometownhealthonline.com
May 24, 2018
Senate Finance Committee Testimony
Good morning, Mr. Chairman:
Greetings from the great State of Georgia and its governor, Governor
Deal. Thank you for the opportunity to share perspectives and dilemmas
for the rural hospital community, as seen in Georgia and many other
states with rural hospitals.
I, Jimmy Lewis, Founder and CEO of HomeTown Health and rural health
advocate for over 70 hospitals throughout the Southeast, have
personally studied and worked in rural hospitals for over 20 years
after serving many years in various fortune 500 companies. The dilemma
of rural hospitals in the United States is very threatening to the
rural way of life and patient care for as many as 20% of Americans who
live in rural America. I would like to share critical information about
rural hospitals using four different perspectives to speak from.
These perspectives include:
I. Rural Hospital Reimbursement.
II. Rural Hospital Patient Access.
III. Georgia's Rural Hospital Stabilization Committee Program,
created by Governor Nathan Deal.
IV. Rural Hospitals as Economic Development Engines.
I. Rural Hospital Reimbursement
The Georgia Medicaid Program is highly underfunded due to a budget
adjustment dating back to 1999. At that time, the Medicaid payment
rates were cut by 15% to about 85% of cost. In the nearly twenty years
following, cuts have never been restored; resulting in Georgia Medicaid
being underpaid by $4 billion. This has occurred where Medicaid has
grown substantially due to increased Medicaid eligible patients; which,
in turn, means the financial losses to hospitals have increased as the
total Medicaid population has increased. More Medicaid covered lives
with continuing losses has critically damaged the Medicaid Program. The
product of this scenario has put the Georgia Medicaid Program among the
lowest payers in the nation.
While all of this has occurred, the complexity of the rural hospital
claims payment systems has accelerated. Currently, typical hospital
business offices are required to administer more than 40 insurance
payment platforms. This complexity translates directly into the loss of
cash flow. Claims payment is damaged through denials of insurance
payments, resulting from inability to understand and apply rules in
over 40 insurance plat forms. Many hospitals have less than 10 days of
cash on hand; and, for a $10-15 million annual revenue hospital, this
is extremely difficult to manage.
As a further problem in reimbursement, Critical Access Hospitals, which
were designed to pay 101% of cost to keep these smaller hospitals
operationally viable, have found that for the smaller hospital
(typically under $10 million annual net revenue), the hospital cost
report, which is the final measure of performance for rural hospitals,
runs into a cost-to-charge efficiency penalty--that forces CMS to make
claw-backs for unintended overpayments. Over time, as the rural
hospital tries to manage its cost to make payroll, those efforts are
negated by these claw-backs that are often as much a $600,000 annually.
Solution Options: One major solution-seeker has been the Georgia
Governor's Rural Hospital Stabilization Committee Program announced in
2014. This program has been funded for the purpose of having 22 rural
hospitals within a ``hub and spoke'' program to seek and develop
solutions to improve financial sustainability. This program's success
has contributed to keeping many rural hospitals from closing.
II. Rural Hospital Patient Access
Georgia has closed eight rural hospitals in the last 5 years and is the
third worst state for closure during that time. Many hospitals have
eliminated services, including more than 10 rural hospitals dropping OB
services. With a typical rural hospital covering 10,000 to 15,000
population and with eight rural hospitals having closed, that equates
to health care access having been jeopardized or transplanted for
120,000 rural Georgians, as well as another 150,000 of the population
impacted from the loss of baby deliveries when OB services were
eliminated. This is basically creating a third world nation type of
health care in the rural parts of Georgia.
Solution options: Three major solution options have been developed that
include, but are not limited to, the following:
1. Georgia has developed a Tax Credit Program: This allows private
citizens and corporate citizens to donate directly into hospital
operations with 100% state tax credit for donation to the hospital to
offset losses, thus keeping the hospital open along with services like
OB.
2. Due to the shortage of primary care physicians (estimated to be
1,600 physicians short in Georgia), rural health care access is being
helped incrementally through leveraging telemedicine. Growth in
telemedicine usage can come additionally with CMS funding for
telemedicine consults. With more than 150 providers having over 650 end
points, Georgia has faced this physician shortage head-on by conducting
thousands of telemedicine consults annually, using state of the art
remote diagnostic and monitoring technology.
3. County governments raising money to support local hospitals through
local referendums and tax millage carve-outs from county budgets
dedicated to rural hospitals. This occurred about 10-12 times in
Georgia in 2017, thus keeping those rural hospitals from potentially
closing due to financial distress. This is a direct cost shift to the
local citizens for health care.
III. Governor Deal's Rural Hospital Stabilization Committee Program
Governor Deal has budgeted $12 million over the last four years to fund
research and pilot development for rural health care through best
practices. Best practices can be replicated throughout the rural
hospital community to prevent rural hospital closure. To date,
approximately 18 hospitals have been researched through the Georgia
State Office of Rural Health. Four additional hospitals are in pilots,
for a total of 22 hospitals studied for process improvement through
this program. Process improvements include, but are not limited to:
community paramedicine, telemedicine, mental health outreach, denial
management and continuous education.
IV. Rural Hospitals as Economic Development Engines
Rural hospitals serve as one of the top three employers in a rural
community and offer among the highest salary rates available in those
areas. Rural hospitals that close in Georgia typically employ 80-120
citizens. Hospital closures in rural communities are comparable to
funerals, impacting the local community and those that are able to
remain living there after the rural hospital closure. Keeping a rural
hospital open is a direct investment in economic development. This
means preserving the economic viability of health care for the 20% of
Georgia rural citizenry, as well as the local tax base that keeps
industry retained or added.
As a means to preserve the rural economy, the Georgia Legislature has
recently passed and the Governor has signed a major piece of
legislation to:
1. Facilitate the 100% tax credit to rural hospitals for donors.
2. Create Hospital Board Training to ensure that properly educated
decisions are made by hospital boards.
3. Create a Rural Health Care Innovation Center in an academic setting
to further explore best practices that can be shared to save rural
hospitals and communities.
4. Offer certain incentives to physicians locating to rural Georgia.
5. Enhance use of remote pharmacists to offset pharmacist shortages.
The primary barriers rural health care continues to face, in spite of
the innovative initiatives described above, include:
1. The lack of skilled health care personnel at all levels. This
includes physicians, nurse practitioners, physician assistants, nurses,
pharmacists, and educated business office personnel, just to name a
few. As the unemployment rate has dropped nationally and in Georgia,
the unintended consequence has been the migration of rural skilled
personnel to large urban centers, leaving rural communities
underserved.
2. Telemedicine is an ideal source for solution, however the payment
structure to support telemedicine has not kept pace with the
technological advances. Telemedicine is the key to redistributing the
mal-apportioned skill sets, especially physician specialists, but must
have enhanced reimbursement to succeed.
3. Entitlement expansion for Medicaid has out-paced the ability to
raise payment rates for core Medicaid services, resulting in physicians
dropping out of Medicaid.
4. The inability for a rural county to absorb the cost-shift for
federally funded Medicaid through locally funded health care
referendums. County governments cannot afford to pay for the expected
health care services created by entitlements.
5. EMTALA, the federal law that requires providers who accept Medicaid
to take all comers no matter their ability to pay. It is not uncommon
for a rural hospital to absorb over $3 million annually in indigent,
self-pay, and charity care. There is no practical way rural hospitals
can afford t his cash loss. Furthermore, there is inconsistency in
federal programs that require EMTALA. For example, Federally Qualified
Health Centers (FQHCs) do not have to abide by EMTALA, thus putting the
rural hospital at a serious payment disadvantage. Additionally, mental
health units called Community Service Boards (CSBs), which are mental
health hospitals, do not have to abide by EMTALA Law.
In summary, rural hospitals serve 20% of the population of the United
States. Rural health care is complex and underfunded but critically
important to keep rural Georgians from living in third world type
conditions. Georgia has invested in process improvements to save rural
hospitals but continues to suffer from near insurmountable barriers.
Any help that can be afforded by Congress in budget allocation and/or
regulation improvement to cut overhead will be appreciated by the
citizens of Georgia. Thank you for your time, consideration, and the
opportunity to present these findings.
Respectfully Submitted,
Jimmy Lewis, Chief Executive Officer
HomeTown Health, LLC
[email protected]
(770) 363-7453
______
Point of Care Testing Association (POCTA)
500 N. Capitol Street, N.W.
Washington, DC 20001
Statement for the Record
On behalf of the Point of Care Testing Association (POCTA), thank you
for holding the May 24, 2018 hearing entitled ``Rural Health Care in
America: Challenges and Opportunities.'' POCTA appreciates the
Committee's attention to the very unique challenges faced by healthcare
providers in rural settings and supports the mission to ensure that
individuals living in rural communities have access to essential health
care services.
POCTA comprises manufacturers of in vitro diagnostic test systems
ordered and furnished directly in patient care settings to allow for
effective and efficient incorporation of diagnostic test results into
patient care decision making. Point-of-care (POC) testing is performed
in physician office laboratories (POLs), emergency departments,
hospital clinics, and at the bedside during inpatient stays. POC
testing is critical to providing real-time diagnostic answers to
healthcare questions that aid in the diagnosis and treatment of a wide
variety of medical conditions from the chronic to the acute.
POC testing plays a substantial role in rural and underserved areas.
Because POC tests are performed in the healthcare setting, providers
can rapidly diagnose and begin treatment without the need to wait days
or weeks for a test result. For providers and facilities that do not
have comprehensive in-house testing facilities, POC tests can improve
the time from test to result, in turn optimizing a provider's decision
making ability.
Rural areas may be particularly susceptible to population health issues
including heart disease, diabetes, obesity and certain cancers,
particularly if they have diminished access to testing. With the
ability to immediately identify disease and begin appropriate
treatment, providers minimize the risk of losing patients to follow up
and improve their ability to treat and prevent the spread of disease
throughout their community.
While it is important that the Committee continue to examine ways to
address closures of rural hospitals, it is equally important to ensure
that physicians, and other types of safety-net providers, are able to
continue to provide the care that rural Americans need. As these
hospitals close, the ability of rural communities to get the care and
the testing they need becomes increasingly difficult and the role of
the physician office becomes even more critical.
Recently, the Centers for Medicare and Medicaid Services (CMS)
implemented the most wide ranging reforms to the Medicare Clinical
Laboratory Fee Schedule (CLFS) since it was created in the early 1980s.
These reforms, included in the Protecting Access to Medicare Act of
2014 (PAMA), aimed to modernize the way that Medicare determines
payment rates for diagnostic tests, including POC tests.
PAMA requires CMS to collect commercial insurer payment data from labs
and use those commercial payer rates to set payment rates under the
Medicare CLFS. The payment rates calculated under the PAMA based CLFS
apply to all diagnostic tests, irrespective of the type of test
(chemistry or molecular); place of service (physician office, reference
lab, etc.); or whether provided in rural, suburban or urban settings.
POCTA remains concerned that, because the CMS data collection process
under PAMA was skewed toward large reference labs, data collected are
not representative of the overall lab marketplace--especially the
marketplace for POL tests. In fact, only 1,100 POLs reported data to
CMS. This represents less than one percent of the estimated 120,000
POLs.\1\
---------------------------------------------------------------------------
\1\ Report: ``Labs Within a U.S. Physician's Office a 1.5 Billion-
Dollar Market;'' PRNewswire: January 14, 2015.
POCTA members develop novel in vitro diagnostic technologies that are
typically billed under the same billing codes as tests for the same
analytes performed by large reference laboratories. However, the cost
structures and value of tests are significantly different in the point-
of-care setting (physician offices, emergency departments, at the
hospital bedside, and at nursing facilities) compared with the
reference laboratory setting. Each setting plays an important role in
the U.S. healthcare system, but they each operate in different
marketplaces, have vastly different cost experiences and have different
---------------------------------------------------------------------------
arrays of private payor rates for tests billed under the same codes.
Establishing rates for POL tests based upon data reported by large
reference laboratories will not represent the marketplace of private
payor rates for tests that are performed in large part in the POL
setting, and as a result, the Medicare payment rates may not cover the
cost of furnishing POC tests in non-reference lab settings.
While we acknowledge the need for Medicare to be able to act swiftly in
the face of changing testing technology, and to be fiduciaries of the
Medicare program by not overpaying for lab tests, we are concerned that
these payment reductions (some as high as 50 percent or more when new
rates are fully phased in) will compromise the ability of physician
office labs and other common POC testing sites to make such POC testing
available, and that these consequences may be particularly felt in
rural communities where access already is so fragile. While payment
decreases are limited to 10 percent each year between now and 2020 and
then 15 percent per year through 2023, reductions of the magnitude that
some tests will experience can only have a negative impact on
providers' willingness and ability to continue to provide care.
POCTA's members supported the enactment of PAMA as an opportunity to
modernize the CLFS. At the same time, shortly after enactment, and
throughout the comment process when it became clear that CMS's data
collection scheme would underrepresent POLs, POCTA's members raised
concerns about the potential negative effects of PAMA on payment for
clinical diagnostic tests furnished at the point-of-care in particular,
tests performed in the POL setting.
We are concerned that the impact of these cuts may be amplified in
rural healthcare settings because of the fragility of the rural health
care safety net and rural providers' heightened sensitivity to costs in
excess of payment. Our data show that a significant number of tests are
provided by providers in rural settings. The following table
demonstrates the magnitude of these payment rate changes on 20 of the
test codes that are frequently performed at the point of care, and for
which there is significant volume reported by providers in rural areas.
For the 20 codes included on this table, we show:
1. ``Rural Utilization''; that is, the number of units of each
code billed to Medicare in 2016 from a physician's office enrolled with
Medicare in a rural ZIP code;
2. ``Fully Implemented Medicare Rate''; that is, the actual
weighted median of private payer rates submitted to Medicare without
application of payment rate reduction guardrails; and
3. ``Decrease from 2017 Medicare Rates''; that is, the total
percentage decrease (or increase) from 2017 payment rates to the fully
reduced rate without application of payment rate reduction guardrails
(these may reflect rates after 2022 if the next round of PAMA data
collection, reporting and rate setting--which commence next year--are
unchanged from current policies).
This table shows that virtually all of these 20 test codes will
experience substantial decreases in payment rates resulting from the
recent changes to CLFS payments made based on the PAMA reforms. These
decreases range from modest (less than one-half of one percent) to
significant (exceeding 38 percent).
POCTA
POINT OF CARE TESTING ASSOCIATION
------------------------------------------------------------------------
Fully Decrease
Rural Implemented From 2017
CPT Code Descriptor Utilization Medicare Medicare
(Units) Rate \2\ Rate
------------------------------------------------------------------------
85610 Prothrombin time 1,470,140 $4.29 -20.4%
------------------------------------------------------------------------
80053 Comprehensive 1,366,150 $9.08 -37.3%
metabolic panel
------------------------------------------------------------------------
80061 Lipid panel 1,063,578 $11.23 -38.2%
------------------------------------------------------------------------
83036 Glycosylated 1,050,858 $8.50 -36.2%
hemoglobin test
------------------------------------------------------------------------
81003 Urinalysis auto w/ 687,968 $2.18 -29.2%
o scope
------------------------------------------------------------------------
80048 Metabolic panel 633,338 $8.06 -30.5%
total ca
------------------------------------------------------------------------
81002 Urinalysis 504,801 $3.48 -0.6%
nonautomated
without
microscopy
------------------------------------------------------------------------
81001 Urinalysis 483,827 $2.82 -35.2%
automated with
microscopy
------------------------------------------------------------------------
82962 Glucose blood test 285,610 $3.28 +2.2%
------------------------------------------------------------------------
81000 Urinalysis by 241,186 $4.02 -7.6%
dipstick or
tablet
------------------------------------------------------------------------
82570 Assay of urine 226,732 $4.62 -34.9%
creatinine
------------------------------------------------------------------------
82947 Assay glucose 166,020 $3.68 -31.7%
blood quant
------------------------------------------------------------------------
82043 Microalbumin, 122,878 $4.85 -38.8%
urine
quantitative
------------------------------------------------------------------------
82044 Microalbumin, 104,476 $6.23 -0.8%
urine
semiquantitative
(reagent strip
assay)
------------------------------------------------------------------------
84550 Assay of blood/ 78,234 $4.02 -35.2%
uric acid
------------------------------------------------------------------------
82565 Assay of 77,822 $4.89 -30.4%
creatinine
------------------------------------------------------------------------
87804 Influenza assay w/ 74,342 $16.55 +0.7%
optic
------------------------------------------------------------------------
84460 Transferase, 64,991 $4.71 -35.2%
alanine amino
(alt) (sgpt)
------------------------------------------------------------------------
87880 Strep a assay w/ 59,772 $16.53 +0.5%
optic
------------------------------------------------------------------------
82550 Assay of creatine 59,400 $5.80 -35.1%
kinase (CK)
(CPK); total
------------------------------------------------------------------------
Table 1: Rural Test Codes; Payment Changes.
\2\ The rate shown reflects the fully implemented payment change.
Payment decreases in 2018, 2019, and 2020 are limited to 10 percent of
the previous year's payment; payment decreases in 2021, 2022, and 2023
are limited to 15 percent of the previous year's payment rate.
Note: Data was sourced from CMS PAMA Rate Setting File and from CMS
Physician/Supplier Procedure Summary File; 2016.
As the Committee is aware, the overall number of providers in rural
communities is lower than that of urban and suburban areas. To the
extent that new CLFS payment rates make if financially infeasible for
physicians to offer these tests in rural areas, millions of
beneficiaries could find it difficult to access point of care testing,
and that could have negative public health implications for rural
communities.
Two tests among the top 20 highlight this concern. Medicare
reimbursements will decrease more than 38 percent for HCPCS Code 80061
(lipid panel), and more than 30 percent for HCPCS code 80048 (basic
metabolic panel [calcium total]). The lipid panel test is an important
diagnostic to manage patients at risk for heart disease. The metabolic
panel test is used to evaluate and follow up on patients with diabetes,
on diuretics, with kidney disease, or with severe diarrhea or vomiting.
In both instances, there is substantial clinical benefit, in fact need,
for physicians to obtain immediate results in the office, at the
bedside, or in an emergency department to rapidly understand and
respond to a patient's condition. The alternative is that the physician
sends specimens to a reference lab, and waits multiple days (maybe a
week in some rural areas), to obtain results. That wait time between
clinical visit and action can significantly compromise patient health
management, compromise patient health, and increase health care costs.
As the Committee considers ways to protect access to high-quality care
for rural communities, we encourage you to consider the implications of
the changes made to Medicare's CLFS on rural healthcare providers and
access to care in rural areas, and to carefully consider how Congress
can support and encourage access to POC testing in rural areas.
Please contact Eric Zimmerman at [email protected] if you
have any questions or wish to discuss this further.
______
Rural Referral Center/Sole Community Hospital Coalition
500 N. Capitol Street, N.W.
Washington, DC 20001
(202) 204-1457 phone (202) 379-1490 fax
www.ruralhospitalcoalition.com
Statement for the Record
On behalf of the Rural Referral Center/Sole Community Hospital
Coalition (the ``Coalition''), thank you for holding the May 24, 2018,
hearing entitled, ``Rural Health Care in America: Challenges and
Opportunities.'' As discussed at the hearing, there are a number of
challenges to providing high-quality health care in rural communities.
The Coalition is pleased to submit testimony for the record
highlighting some of these challenges and offering collaborative
solutions to ensure access to health care in rural areas is maintained
and improved.
Formed in 1986, the Coalition is comprised of hospitals designated as
Rural Referral Centers (``RRCs'') and Sole Community Hospitals
(``SCHs'') under the Medicare Program. Member hospitals of the
Coalition share the common goal of ensuring that federal hospital
payment policies recognize the unique and important role of these
hospitals in providing access to quality care in their communities.
Rural Referral Centers and Sole Community Hospitals
The RRC program was established by Congress to support high-volume
rural hospitals that treat a large number of complicated cases and
function as regional referral centers. Generally, to be classified as
an RRC, a hospital has to be physically located outside a Metropolitan
Statistical Area (indicating an urban area) and either have at least
275 beds or meet certain case-mix or discharge criteria.
The SCH program was created to maintain access to needed health
services for Medicare beneficiaries in isolated communities. The SCH
program ensures the viability of hospitals that are geographically
isolated and thus play a critical role in providing access to care.
Hospitals qualify for SCH status by demonstrating that because of
distance or geographic boundaries between hospitals they are the sole
source of hospital services available in a wide geographic area. There
are a variety of ways in which hospitals can qualify for SCH status,
but the majority qualify by being more than 35 miles from another
provider.
RRCs and SCHs provide rural populations with local access to a wide
range of health care services. In so doing, RRCs and SCHs localize
care, minimize the need for referrals and travel to urban areas, and
provide services at costs lower than would be incurred in urban areas.
These hospitals also commonly establish satellite sites and outreach
clinics to provide primary and emergency care services to surrounding
underserved communities, a function which is becoming increasingly
important as economic factors force many small rural hospitals to
close.
RRCs and SCHs are also vital to their local economies. These hospitals
typically are significant employers, generating considerable cash
outflow into the area economy and boosting the area tax base. There are
395 hospitals in 45 states with RRC status and 448 hospitals in 47
states with SCH status; 131 of these hospitals have both RRC and SCH
status.\1\
---------------------------------------------------------------------------
\1\ Centers for Medicare and Medicaid Services, FY 2018 FR and CN
Impact File, September 29, 2017.
For these and other reasons, Congress has long appreciated the special
role of RRCs and SCHs in the rural health care community and the need
to afford these hospital s special recognition and protections to
ensure their continued viability and role in the rural health care
network.
Challenges Facing RRCs and SCHs
When examining rural health challenges, given the important role these
hospitals play in their communities, it is important to address the
challenges facing RRCs and SCHs that may impact the quality of, and
access to, essential health care services.
Sole Source of Care: First, many of the RRCs and SCHs are, by
definition, the sole source of care within and around a rural
community. Many patients that live in rural communities depend on these
facilities for a full complement of health care services, from primary
care to inpatient sophisticated treatment. The closures of rural
hospitals remains an on-going trend, causing access problems for
residents of rural communities. When an RRC or SCH closes, the
consequences for the community may be more grave than otherwise.
Since January 2005, 125 rural hospitals have closed (83 since
January 2010). Of the 125 closed hospitals, more than half either
converted to non-health care use (54.2 percent) or were abandoned.\2\
---------------------------------------------------------------------------
\2\ ``Rural Hospital Closures.'' 2014, http://
www.shepscenter.unc.edu/programs-projects/rural-health/rural-
hospitalclosures/.
Patients in affected communities are traveling further to access
inpatient care: 43 percent of the closed hospitals are more than 15
miles to the next nearest hospital, and 15 percent are more than 20
miles.\3\
---------------------------------------------------------------------------
\3\ Clawar, M, Thompson, K, and Pink, G. ``Range Matters: Rural
Averages Can Conceal Important Information'' (January 2018). NC Rural
Health Research and Policy Analysis Program. UNC-Chapel Hill, http://
www.shepscenter.unc.edu/download/15861/.
Approximately 673 rural hospitals are vulnerable to close,
representing more than one third of the rural hospitals in the U.S. and
impacting up to 11.7 million rural patients.\4\
---------------------------------------------------------------------------
\4\ ``2016 Rural Relevance: Vulnerability to Value Study.''
iVantage Analytics, February 2016.
The pace of closures is accelerating. From March 2013 to March
2016, 43 rural hospitals closed. . . . While 27 of the closures were
less than 20 miles from the nearest hospital, 13 were 20 to 30 miles
from the nearest hospital and three were over 30 miles from the nearest
hospital.\5\
---------------------------------------------------------------------------
\5\ Report to the Congress: Medicare and the Health Care Delivery
System. Medicare Payment Advisory Commission, June 2016, page 208.
Unique Patient Populations: Second, providers in rural areas treat more
challenging patient populations. Individuals who live in rural areas
have higher rates of chronic or life-threatening diseases, such as
diabetes and coronary heart disease.\6\ Additionally, rural residents
are more likely to face significant mental health issues including
substance abuse and seasonal affective disorder.\7\ RRCs and SCHs tend
to face even more complex patients than other rural hospitals. For
instance, the average Medicare case mix index for RRCs and SCHs is 1.62
and 1.39, respectively, compared to 1.26 for all other rural
hospitals.\8\ The Medicare case mix index of RRCs more closely
resembles that of urban hospitals (1.62), demonstrating that RRCs are
fulfilling the congressional intent of localizing sophisticated care in
rural areas.\9\
---------------------------------------------------------------------------
\6\ O'Connor, A, and Wellenius, G (2012, April 24). ``Rural-urban
disparities in the prevalence of diabetes and coronary heart disease.''
The Royal Society for Public Health, 126(10), 813-820, doi:10.1016/
j.puhe.2012.05.029.
\7\ ``Health Status and Behaviors,'' Stanford Medicine, eCampus
Rural Health.
\8\ Centers for Medicare and Medicaid Services. FY 2018 IPPS Impact
File, September 29, 2017.
\9\ Id.
Financial Challenges: Third, and finally, rural health care providers
are increasingly confronting extremely difficult financial
circumstances. Rural hospitals (including RRCs and SCHs) tend to have
negative or very small operating margins, in contrast to their urban
counterparts, making them financially vulnerable. Additional Medicare
reimbursement reductions impose further financial strain and compromise
---------------------------------------------------------------------------
their ability to serve rural communities.
Rural hospitals tend to have lower operating margins due to
lower volumes, a predominately public payer mix, and higher levels of
uninsured patients.\10\
---------------------------------------------------------------------------
\10\ ``Rural Hospital Participation and Performance in Value-based
Purchasing and Other Delivery System Reform Initiatives,'' Assistant
Secretary for Planning and Evaluation, U.S. Department of Health and
Human Services, Issue Brief, October 19, 2016.
Nationally, urban hospitals were twice as profitable as rural
hospitals in 2016: the U.S. median profit margin for urban hospitals
was 5.51 percent which was more than double the margins for Critical
Access Hospitals (2.56 percent) and other types of rural hospitals
(2.01 percent).\11\
---------------------------------------------------------------------------
\11\ Pink, GH, Thompson, K, and Holmes, GM. Testimony, Senate
Finance Committee, May 24, 2018.
Rural hospitals on average treat a higher percentage of Medicare
patients (as measured by Medicare days) than their urban counterparts,
46 percent for rural hospitals compared to 34 percent for urban
hospitals.\12\ RRCs and SCHs, not surprisingly, tend to play an equally
significant role in the Medicare program, having on average 43 percent
and 45 percent, respectively, of their inpatient days accounted for by
Medicare beneficiaries.
---------------------------------------------------------------------------
\12\ Centers for Medicare and Medicaid Services. FY 2018 FR and CN
Impact File, September 29, 2017.
While this negatively impacts patient care, it also significantly
impacts local economies that often depend on rural hospitals as a large
---------------------------------------------------------------------------
employer in their communities.
These hospitals also often do not have the same flexibility as other
hospitals to discontinue lower margin or unprofitable services, like
mental health services. As mission driven organizations, and the only
source of hospital services for their community, these hospitals often
will continue to offer services, even at great financial loss, because
there are no other providers offering those services.
These hospitals also are struggling with dwindling federal support.
Congress and the Centers for Medicare and Medicaid Services (CMS) have
discontinued some of the benefits that these hospitals originally
enjoyed.
Historically, RRC status carried with it several important financial
benefits, including a higher standardized amount payment rate than
ordinary rural hospitals. Today, RRCs receive special treatment under
geographic reclassification and the Medicare disproportionate share
hospital (DSH) program. With respect to geographic reclassification,
hospitals with RRC status are exempt from proximity and certain other
requirements. With respect to DSH, RRCs are not subject to the 12
percent payment adjustment cap that applies to certain other rural
hospitals. RRCs are also eligible to participate in the 340B program at
a lower DSH threshold.
SCHs are reimbursed by Medicare for operating costs associated with
inpatient services provided to program beneficiaries on the greater of
the federal payment rate applicable to the hospital (i.e., the payment
that the hospital would otherwise receive under the inpatient service
prospective payment system (``PPS'')) or a cost-based payment, which is
determined based on the hospital's costs in a base year: 1982, 1987,
1996 or 2006 trended forward, whichever is highest, but these cost
years have not been updated in more than a decade.
A hospital with SCH status also is eligible for an upwards payment
adjustment for any cost reporting period during which the hospital
experiences a more than 5 percent decrease in its total inpatient
discharges as compared to its immediately preceding cost reporting
period due to experiences beyond its control. The adjustment is
determined based on a variety of considerations, but can be as high as
the difference between the hospital's operating costs and the federal
payment rate applicable to the hospital for the year in question.
Additionally, SCHs are eligible for ``special access'' rules for
purposes of Medicare geographic reclassification, which means that a
hospital with SCH status applying for reclassification does not have to
be within 35 miles of the area to which it seeks reclassification, and
may apply to the nearest Metropolitan Statistical Areas (MSAs).
Hospitals with SCH status receive a 7.1 percent adjustment to
Outpatient Prospective Payment System. SCHs used to receive
transitional payments under the OPPS, but Congress allowed that program
to lapse in 2013.
Recommendations for Congressional Action
Overall, RRCs and SCHs treat patient populations with the most chronic
and costly health issues with limited financial resources. This makes
these rural providers especially dependent on accurate and appropriate
payment policies. To ensure RRCs and SCHs are able to continue to
provide high-quality health care to rural communities, there are five
policy changes the Coalition recommends.
Recommendation One--Examine Impact of CMS's OPPS Drug Payment Policy:
First, Congress should examine the impact of the CMS drug payment
policy implemented via the CY2018 OPPS rulemaking, but in the meantime
take steps to prevent further harm to rural providers. As the Committee
is aware, beginning in 2018, CMS instituted a policy change reducing
the amount Medicare pays hospitals for drugs covered under Part B of
the program when those drugs are purchased through the 340B program.
Specifically, CMS reduced payment from Average Sales Price (ASP) plus 6
percent to ASP minus 22.5 percent. Fortunately, CMS excepted from this
payment adjustment rural SCHs. Urban SCHs and RRCs, however, are
subject to the adjustment. CMS cited hospital operating margins,
closure rates of rural hospitals, low-volume, and existing special
payment designations among reasons for excepting rural SCHs, but not
other rural safety net providers. Urban SCHs and RRCs share many of
these same characteristics, and also should be protected while CMS
examines the impact. The idea of implementing a significant policy
change, and then examining the harm is potentially reckless given the
known fragility of these providers.
The OPPS rule established policies that do not appropriately support
these communities and address these issues. Congress should make the
SCH exception in the OPPS permanent. SCHs play a vital role in the
rural health care infrastructure. By definition, these hospitals are
the sole source of hospital services for a large area (they are either
many miles away, separated by geographic barriers, or a minimum driving
distance). If an SCH fails, a community is left without access to
inpatient hospital services, and residents must travel great distances
to access this care. CMS recognized these challenges in the May 8,
2018, release of its ``Rural Health Strategy,'' where issues such as
the unique economies of providing health care in rural America were
highlighted.\13\ The uncertainty provided under the current policy--
i.e., not knowing if CMS will extend the policy--inhibits investment in
services in rural communities, and further strains the rural health
care safety net.
---------------------------------------------------------------------------
\13\ ``Rural Health Strategy.'' Rural Health Council. Centers for
Medicare and Medicaid Services, May 8, 2018, https://www.cms.gov/About-
CMS/Agency-information/OMH/Downloads/Rural-Strategy-2018.pdf.
Congress also should examine extending the exception to urban SCHs. CMS
uses MSAs to delineate between urban and rural areas. MSA is a crude
tool, at best, for characterizing urban and rural areas. Given that
MSAs uses counties as building blocks, many ``urban'' areas are as
rural as the most isolated frontier area. In fact, to be an urban SCH,
a hospital has to be even further (35 miles) from another hospital to
qualify. Currently, there are 78 urban SCHs in 38 states.\14\ Using
MSAs to identify urban and rural areas is particularly problematic in
the western United States where there are many very large counties that
comprise MSAs (see, for example, San Bernardino County in California
and Pima County in Arizona). There are instances where an SCH is
designated urban by CMS, but is actually a considerable distance from
the nearest urbanized area. For example, Verde Valley Medical Center is
located in Prescott, AZ and is considered an urban SCH. However, the
closest urbanized area with more than 40,000 people is Flagstaff, AZ,
which is nearly 100 miles away.\15\
---------------------------------------------------------------------------
\14\ Centers for Medicare and Medicaid Services. FY 2018 IPPS
Impact File, September 29, 2017.
\15\ ``Metropolitan and Micropolitan Statistical Areas of the
United States and Puerto Rico.'' U.S. Census Bureau, July 2015, https:/
/www2.census.gov/geo/maps/metroarea/us_wall/Jul2015/cbsa_us_0715.pdf.
Using this approach, CMS fails to recognize MSAs are not an appropriate
means to determine rural and urban SCHs. Further, it does not take
account for the fact that urban and rural SCHs serve very similar
patient populations, face the same financial challenges as described
above, and both play an essential role as safety net providers in rural
communities. While there are a relatively small number of urban SCHs,
---------------------------------------------------------------------------
they should be afforded the same benefits of their rural counterparts.
Similarly, Congress should examine extending the exception to RRCs.
RRCs, like SCHs, play an important role in the rural healthcare safety
net, and exhibit many of the same vulnerabilities as SCHs. Congress
sought to buttress RRCs in the 340B program the same as SCHs, by
lowering the eligibility bar for both provider types.
Recommendation Two--Close the Orphan Drug Loophole: In 2010, Congress
extended 340B Program eligibility by making it easier for freestanding
cancer hospitals, Critical Access Hospitals (CAHs), RRCs, and SCHs to
participate. Under this change, freestanding cancer hospitals and CAHs
are eligible by virtue of their status as these providers. RRCs and
SCHs are not automatically eligible, but Congress made it easier for
them to qualify by lowering the DSH threshold for these facilities.
According to 2018 HRSA data, approximately 100 RRCs or SCHs
participating under the lower DSH threshold are participating in the
340B Program.
However, at the same time that Congress made it easier for these
facilities to participate in the 340B Program, it also sought to ensure
the program's discounts would not stifle investment in and development
of drugs for rare diseases or conditions. Specifically, Congress
included a provision that exempted from the 340B discount requirements
any ``drug designated by the Secretary under section 360bb of title 21
for a rare disease or condition'' when purchased by one of the
expansion entities. This provision effectively exempts any drug with
orphan drug designation.
Many commonly used drugs have orphan designation for one or more
indications, even though the drug also is approved for more common
indications too. Indeed, a January 2017 study by Kaiser Health News
(KHN) found that about one third of orphan approvals made by the FDA
since the orphan drug program was enacted in 1983 have been either for
mass market drugs repurposed for an orphan designation, or for drugs
that received multiple orphan designations.\16\ The FDA's orphan drug
program provides a number of incentives--such as market exclusivity and
tax credits--to encourage development of drug therapies for rare
diseases or conditions, but each of these orphan drug incentives
applies only when the drug is used to treat the rare disease or
condition, and not when used for other indications.
---------------------------------------------------------------------------
\16\ ``Drugmakers Manipulate Orphan Drug Rules to Create Prized
Monopolies.'' Kaiser Health News, January 17, 2017, http://khn.org/
news/drugmakers-manipulate-orphan-drug-rules-to-create-
prizedmonopolies/?utm_campaign=KHN%3A+Daily+Health+Policy+Report&utm_sou
rce=h
s_email&utm_medium=email&utm_c ontent=40780219&_hsenc=p2ANqtz--
Iz5qttLkkNBVUJN3Te
rDq15vXUOZzQROhDe9_cERt1nPkP_T44hddg2bb5zflAkZB00isTyHt_xt4PcGIhjl7UwJ0w
&_hsm
i=40780219.
In 2011, HRSA published a proposed rule that sought to define the
orphan drug exclusion established under the 2010 law by proposing that
orphan drugs would be exempt from 340B discount requirements only when
used for the rare condition or disease for which that drug received
orphan designation. In 2013, HRSA published a final rule that largely
adhered to the proposed rule's interpretation of the orphan drug
---------------------------------------------------------------------------
exclusion.
Shortly after HRSA promulgated its final rule, the pharmaceutical
industry--which had been urging HRSA to interpret the exception as
applying to any drug with orphan designation, regardless of the
clinical condition for which the drug was prescribed--sued the agency
seeking to enjoin implementation of the final rule; the federal
district court issued an opinion siding with the pharmaceutical
industry. In 2014, HRSA responded by reissuing its notice as an
interpretive rulemaking, which essentially announces the agency's
interpretation of the statute, but does not include regulations
enforcing it. The pharmaceutical industry responded with a new lawsuit
challenging the interpretive rule; again the same court sided with the
pharmaceutical manufacturers and invalidated the interpretive rule.
Since the court decisions, many pharmaceutical companies are
restricting access to 340B Program discounts on drugs with orphan
designations, thereby undermining the benefits of the program for RRCs,
SCHs, CAHs and freestanding cancer hospitals. Many such hospitals
report significant increases in drug spending since the court decision
and are not realizing the full benefit of the 340B Program.
Congress established the orphan drug program to encourage development
of drugs for the diagnosis and/or treatment of rare diseases or
conditions, and the 340B orphan drug exclusion is, in effect, yet
another incentive to promote investment these drugs. However, Congress
could not have intended to extend this benefit to a drug use for which
there is a substantial and lucrative market. Recent data shows that
eight of the 10 best-selling drugs in the U.S. in 2015 were drugs with
orphan designation.\17\ Further, spending on these drugs accounted for
55 percent of all Medicare Part B drugs.\18\
---------------------------------------------------------------------------
\17\ Orphan Drug List Governing April l to June 30, 2018, https://
www.hrsa.gov/opa/program-requirements/orphan-drug-exclusion/index.html.
\18\ 2015 Total Part B Drug Spending from MedPAC June 2017 Data
Book (Chart 10-1), http://www.medpac.gov/docs/default-source/data-book/
jun17_databookentirereport_sec.pdf?sfvrsn=O.
The Coalition urges the Committee to review and consider the Closing
Loopholes for Orphan Drugs Act (H.R. 2889). This bill seeks to clarify
the orphan drug exclusion by amending the exemption to limit the carve-
out only to those uses for which the drug received orphan status. This
important, bipartisan piece of legislation will ensure that RRCs and
SCHs (as well as CAHs and cancer hospitals) benefit from the 340B
Program to the extent that Congress intended, allowing these facilities
to continue to provide rural communities with local access to important
---------------------------------------------------------------------------
health care services.
Recommendation Three--Extend and Codify the 7.1 Percent Payment
Adjustment: Under current CMS policy, Medicare payments to rural SCHs
for outpatient services are increased by 7.1 percent. CMS makes this
adjustment because it found, pursuant to a study required by Congress,
that, compared to urban hospitals, rural SCHs have substantially higher
costs, and need a payment adjustment to be comparably treated under the
outpatient PPS. Because Congress directed CMS to study only rural
hospitals, the adjustment applies only to rural SCHs.
For the same reasons articulated above, Congress should extend this
adjustment to urban SCHs. Urban and rural SCHs serve very similar
patient populations, face the same financial challenges, and both play
an essential role as safety net providers in rural communities. There
is no policy basis to differentiate between urban and rural SCHs for
purposes of this policy.
Recommendation Four--Update Hospital Specific Rate Base Year: SCHs are
reimbursed by Medicare for operating costs associated with inpatient
services provided to program beneficiaries on the greater of the
federal payment rate applicable to the hospital (i.e., the payment that
the hospital would otherwise receive under the inpatient PPS) or a
cost-based payment, which is determined by adding together the federal
payment rate applicable to the hospital and the amount that the federal
payment rate is exceeded by a hospital-specific rate (based on the
hospital's costs in fiscal year 1982, 1987, 1996 or 2006 trended
forward, whichever is higher). A hospital that qualifies for SCH status
will continue to be reimbursed under the PPS for as long as
reimbursement under the PPS is more than reimbursement on a cost-basis;
the hospital will be paid on a cost-basis if cost-based reimbursement
is greater than reimbursement under the PPS.
We propose that Congress add a more current cost year--e.g., 2016 or
2017--for purposes of determining the target amount. Congress last
required an update nearly a decade ago (see, section 122 of Public Law
110-275, the Medicare Improvement for Patients and Providers Act of
2008), and it is time for this program to reflect more current cost
experience.
Recommendation Five--Examine Why Annual MS-DRG Adjustments Disadvantage
RRCs and SCHs, and Require an Appropriate Adjustment to Compensate: CMS
inpatient payment policy has been systematically disadvantaging RRCs
and SCHs vis-a-vis their urban counterparts. According to CMS's own
Impact Analysis of Proposed Changes (Table 1, 83 Fed. Reg. 20,603 et
seq.), rural hospitals are disproportionately disadvantaged by the
budget neutrality adjustments CMS uses when implementing and
reconciling MS-DRG changes from year-to-year. For FY 2019, CMS
estimates that this adjustment will be neutral for urban hospitals, but
cause a 0.3 percentage point payment reduction for rural hospitals. The
impact for certain categories of rural hospitals is even greater,
including 0.4 percentage point for SCHs. As if this isn't troubling
enough, as the table below reveals, this has been a consistent trend in
recent years, serving to perpetuate the gap between urban and rural
hospitals and further threatening the gap between urban and rural
providers.
Congress should require CMS to examine and report on this phenomenon,
and make an adjustment, if deemed appropriate, to restore these
hospitals to a level playing field.
Weights and DRG Changes With Application of Recalibration Budget Neutrality Values Comparison Between Urban and
Rural Hospitals From 2014 to 2018 \19\
----------------------------------------------------------------------------------------------------------------
SCH and MDH and
Year Urban Rural RRC SCH MDH RRC RRC Data Source
----------------------------------------------------------------------------------------------------------------
2014 0 -0.4 -0.1 -0.6 -0.7 -0.3 -0.5 IPPS 2014 Final Rule
----------------------------------------------------------------------------------------------------------------
2015 0 -0.2 0 -0.2 -0.3 -0.3 -0.3 IPPS 2015 Final Rule
Correction Notice
----------------------------------------------------------------------------------------------------------------
2016 0 -0.2 -0.1 -0.3 -0.3 -0.3 -0.3 IPPS 2016 Final Rule
Correction
----------------------------------------------------------------------------------------------------------------
2017 0 -0.4 -0.1 -0.3 -0.6 -0.3 -0.6 IPPS 2017 Final Rule
Correction
----------------------------------------------------------------------------------------------------------------
2018 0 0.1 0.1 -0.2 -0.1 IPPS 2018 Final Rule
Correction
----------------------------------------------------------------------------------------------------------------
2019 0 -0.3 0 -0.4 -0.5 -0.2 -0.5 IPPS 2019 Proposed Rule
----------------------------------------------------------------------------------------------------------------
Total 0 -1.4 -0.2 -2.0 -2.4 -1.5 -2.2
----------------------------------------------------------------------------------------------------------------
\19\ Federal Register Vol. 83, No. 88, Monday, May 7, 2018, Proposed Rules.
Conclusion
As the Committee continues to examine rural health challenges, we urge
thoughtful attention and consideration be given to RRCs and SCHs. As
described above, these hospitals play essential roles in providing high
-quality health care to rural communities. We are available for
questions, further comments, and additional information. Please feel
free to reach out to Eric Zimmerman (ezimmerman@
mcdermottplus.com ) or Rachel Stauffer ([email protected]).
[all]