April 12, 2013 - Volume 13, No. 2
Critical Access Hospitals Targeted for Cuts in President's Budget Proposal
We are very pleased to report that payments to Critical Access Hospitals (CAHs) are not cut in any of the three state-level budget proposals (House, Senate, and Governor)! Your partnership with us on the Essential Care Everywhere project and our strong advocacy together really changed the conversation from last year.
However, the news from the other Washington is more worrisome – CAH funding is at risk at the federal level. Yesterday, President Obama proposed two significant policy changes for CAHs:
- Reducing payments to CAHs from 101% of reasonable costs to 100% of reasonable costs; and
- Eliminating the CAH designation for hospitals fewer than 10 miles from another hospital.
Cuts to CAHs have appeared in the President’s budget proposal for the last couple years. These proposals have been defeated thanks to successful advocacy by CAH hospitals helping members of Congress understand the essential role they play in the health care delivery system. However, we always worry that once hospitals are put on a list for payment cuts, it is difficult to get off that list.
Impact of Sequestration
Several members have raised the issue of sequestration and asked if the President’s budget proposal adds to those cuts – meaning cumulatively, there would be a 3% cut. The future of sequestration is totally unclear, but the President’s proposal would end it. At this point, we are considering the President’s CAH cuts and the sequestration cuts separately. We want to oppose these new cuts in the President’s budget.
What You Can Do
At this point, we do not have reason to believe that the cuts are imminent. However, advocacy is always important when we see a proposal like this. We want to ensure Washington State’s U.S. Senators and Representatives understand the vital role CAHs play in the health care delivery system.
- Contact your members of Congress! They need to hear from their local rural hospitals and health systems. To ensure your message is read, address your email to the U.S. Senator(s) or Representative, and send it to the Chief of Staff, Legislative Director, and the Health Legislative Assistant.
“As a Critical Access Hospital (CAH), I oppose the President’s proposed cut to our reimbursement and the policy changes that would eliminate critical access status for many hospitals. As a result of sequestration, our hospital is taking a two percent cut in Medicare payments and we oppose further cuts. Cost-based reimbursement was put into place by the federal government to address the lack of private insurance and relatively low patient volumes in rural areas. Traditionally, Medicare has paid CAHs at 101 percent of their “allowable” costs. Some of the necessary expenses incurred by the hospitals are not allowable. For example, the cost of providing services to people qualifying for charity care is not an allowable cost. Cost-based reimbursement provides a way for Critical Access Hospitals to survive. As a CAH, we provide a wide array of health care beyond traditional hospital services including primary care, emergency medical services, and long-term care. Additional cuts would harm our ability to provide all of the care our patients need.”
For those effected by the 10-mile rule: “I also oppose the President’s proposed 10-mile rule that would eliminate critical access status for my hospital. Without critical access status, our hospital would definitely cut services and potentially face closure.”
- Join us in D.C.! Each year, WSHA brings a delegation of rural hospital leaders from around the state to meet with elected officials in D.C. The two-day meeting includes an up-to-the-minute briefing on the latest information from WSHA and the American Hospital Association, as well as visits to Capitol Hill. We strongly encourage you or other senior leaders from your hospital to attend and advocate for Critical Access Hospital funding and rural health. This year, we will be in D.C. on September 18 and 19. For information about logistics, please contact Wendy Ray at email@example.com.