CMS extends funding for low-volume hospitals

Extension mostly applies to smaller, rural facilities
Tools

The Centers for Medicare & Medicaid Services extended a program to boost payments to hospitals with low Medicare inpatient volumes, according to a notice in the Federal Register.

The extension of the program, which adjusts for hospitals that participate in Medicare's inpatient prospective payment system but have a low volume of patients, applies to the second half of the 2014 fiscal year and will now run through Sept. 30.

The program dates back to 2005 and has been extended primarily through a patchwork of legislation, including the Pathway for SGR Reform Act, the American Taxpayer Relief Act and the Affordable Care Act. The program is currently extended through March of next year, Politico reported, indicating CMS will have to officially publish another extension late in 2014.

In order to qualify for the additional payments, hospitals have to be at least 15 roadway miles from the nearest inpatient prospective payment system hospital and have fewer than 1,600 Medicare Part A discharges annually. Most of those that would qualify are rural providers, according to AHA News Now.

Those hospitals that met the criteria during the first half of the fiscal year automatically qualify for the extension. Other facilities have to apply to their regional Medicare Administrative Contractor (MAC) for proper certification.

The low-volume payments are among a variety of federal programs intended to ensure a steady revenue stream to rural facilities. One of the biggest, the Critical Access Hospital program, has come under criticism for wasteful management in recent years. That has prompted the U.S. Department of Health and Human Services Office of the Inspector General to consider restructuring the program, which has drawn criticism from the provider community, claiming major changes could force many facilities to close.

Many rural hospitals are in both fiscal and manpower crises. Some resort to partnering with larger hospitals systems in order to have access to capital and keep their doors open.

To learn more:
- here's the Federal Register announcement (.pdf)
- read the AHA News Now article
- check out the Politico article

Related Articles:
Rural hospitals face physician recruitment, telemedicine challenges
Experts say rural healthcare in crisis
Rural hospitals get temporary funding relief
Rural hospitals vulnerable, but have Senate support