The Representatives who proposed the legislation noted that, even before the pandemic, Medicare reimbursements to rural hospitals were often inadequate to meet rising operating costs. Without higher reimbursement, rural hospitals, which serve areas with few other healthcare resources, run the risk of closure.
Full Answer
When will the Medicare reimbursement cuts return?
Michael Topchik, national leader of the Chartis Center for Rural Health, told the Daily Yonder in an interview that the Medicare reimbursement cuts from sequestration will return in March. By July, the full 2% cut would return.
What is the rural health care program (RHC)?
A key feature of the RHC Program is Medicare and Medicaid volume-appropriate, cost-based reimbursement, which is designed to sustain vulnerable rural primary care providers.
Will rural hospitals close when federal funding ends?
When federal pandemic emergency funding ends next year, The Chartis Center for Rural Health says, rural hospitals will close, one after another. It was happening before the pandemic, but an infusion of federal funds slowed it. The Chartis Center says:
How does Medicare pay for RHCs?
Medicare currently pays RHCs for the lesser of reasonable costs (expressed as an adjusted cost per visit) for a defined package of RHC services or a per-visit reimbursement cap, from which provider-based RHCs owned by hospitals with fewer than 50 beds are exempt.
How does Medicare reimbursement affect hospitals?
Under this system, hospitals receive a fixed payment for each patient that is determined by the patient's diagnosis-related group (DRG) at the time of admission; thus, reimbursement is unaffected by the hospital's actual expenditures on the patient.
What affects Medicare reimbursement?
Average reimbursements per beneficiary enrolled in the program depend upon the percentage of enrolled persons who exceed the deductible and receive reimbursements, the average allowed charge per service, and the number of services used.
Why are rural hospitals so important?
Rural hospitals are an integral part of the healthcare system. Because of their significant contributions to overall community well-being, they are a critical component of communities across rural America. Rural hospitals provide services across the continuum of care from primary care to long-term care.
What is the impact of rural hospital closures on the communities they once served?
Principal Findings. Results indicate that the closure of the sole hospital in the community reduces per-capita income by $703 (p<0.05) or 4 percent (p<0.05) and increases the unemployment rate by 1.6 percentage points (p<0.01).
Why are reimbursements declining?
There are several factors that are currently playing a role in reimbursement declines for hospitals. Fee schedule reductions for Medicare and Medicaid as well as lower rates for commercial plans are key causes, in addition to initiatives found in the Affordable Care Act (ACA) such as readmission penalties.
What are the impacts of cutting hospital and physician reimbursements?
In the absence of cost shifting, a cut in administered prices will reduce profits or incomes to those who own hospitals or medical practices, limit providers' ability or willingness to provide uncompensated care, and, over time, reduce providers' capacity to provide services.
Why is rural healthcare an issue?
Less access to health care. For example, clinics and hospitals may be far away. Higher rates of certain substance use, such as cigarette smoking and opioid and methamphetamine misuse. Higher rates of chronic health problems such as high blood pressure and obesity.
Why do rural areas have less access to healthcare?
In rural areas, because there is little anonymity, social stigma and privacy concerns are more likely to act as barriers to healthcare access.
Why do rural areas lack healthcare?
Rural residents report less leisure-time physical activity and lower seatbelt use than their urban counterparts. They also have higher rates of poverty, less access to healthcare, and are less likely to have health insurance. All of these factors can lead to poor health outcomes.
Do you think closures of rural hospitals impact hospitals in urban centers if so how?
Because of the greater travel times in rural areas, closure of a small rural hospital is likely to have a greater negative impact than closure of a small hospital in an urban area; in fact, a study of hospital closures in California found that closures of rural hospitals increased mortality for both heart attacks and ...
The Importance of Maximizing Insurance Reimbursement
The Representatives who proposed the legislation noted that, even before the pandemic, Medicare reimbursements to rural hospitals were often inadequate to meet rising operating costs.
Insurance Reimbursement is Based Upon the Wage Index
The proposed legislation would create a national minimum of 0.85 for the Medicare Area Wage Index, which determines the amount of payments Medicare makes to hospitals to reimburse for care, including inpatient Medicare payments.
The Rural Disparity
But it is this wage index that has created a disparity in the reimbursements that rural hospitals receive as compared to those in more urban or suburban areas, where cost of living and earned wages are higher. The cost of equipment required to perform covered procedures, however, does not vary.
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