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AHA urges Congress to extend rural Medicare measures

January 10, 2014

Congress’ failure to extend several soon-to-expire Medicare reimbursement policies would make it much harder for financially struggling hospitals to continue providing essential care and services for their patients and communities, the AHA said in a Jan. 9 statement to the House Energy and Commerce Committee’s health panel.

The AHA urged the panel to “recognize that the circumstances that necessitated these provisions continue to exist; therefore, it is appropriate that they be extended.”

The AHA submitted the statement during a health subcommittee hearing on Medicare and other so-called “extender” policies and what they might look like if Congress overhauls Medicare’s physician payment formula.

The AHA’s statement focused on four programs that are temporarily extended through the recently enacted “Bipartisan Budget Act,” H.J. Res 59, but set to expire March 31. They are the low-volume adjustment and Medicaredependent hospital (MDH) programs, ambulance add-on pay­ments and outpatient therapy caps.

More than 500 hospitals receive the low-volume adjustment, which Congress established in 1988. Under the program, a hospital can receive a special Medicare payment if it is more than 15 miles from another comparable hospital and discharges fewer than 1,600 Medicare patients a year. “If it were to expire, these providers would once again be put at a disadvantage and have severe challenges serving their communities,” the AHA told the subcommittee.

More than 200 hospitals receive MDH payments. Congress established the program in 1987 to provide a special Medicare inpatient rate for rural hospitals that have 26 to 100 beds, are not classified as a Sole Community Hospital and have at least 60% of inpatient patient days or discharges covered by Medicare. The MDH program also reimburses hospitals if their Medicare patient admissions fall by at least 5% from the previous fiscal year, due to situations outside their control. “These payments allow MDHs greater financial stability and leave them better able to serve their communities,” the AHA said.

Congress also provides add-on payments for rural ambulance providers who have higher per-trip costs due to the longer distances they have to travel and fewer patients to transport. These additional payments ensure that beneficiaries have access to emergency transport services in rurally isolated areas, the AHA observed. Medicare sets annual per beneficiary payment limits for outpatient physical therapy, occupational therapy or speech language pathology services provided by therapists and other eligible professionals in certain settings. There is an exceptions process that Congress has extended several times. The “Bipartisan Budget Act” extends through March a cap on therapy services provided in hospital outpatient departments, as well as the exceptions process. CMS on Jan. 1 began applying outpatient therapy caps to critical access hospitals (CAH).

“While the AHA supports further extending the outpatient exceptions process, we oppose expansion of the cap to therapy services providing in the outpatient departments of hospitals and CAHs,” the association told the subcommittee.