As more than 450 rural hospitals face closure across the country, several bills aimed at helping them are waiting on Congressional action.
In February of this year, Chartis, a consulting group focused on healthcare, said in its latest study of rural hospitals that 453 were at risk of closure due to financial difficulties. The study found, 43% of rural hospitals are operating at a loss. In states that have yet to adopt or implement Medicaid expansion, 51% of rural hospitals are operating in the red.
To combat that, some members of Congress have introduced legislation that they hope will help rural hospitals stay open. Legislation like the Rural Hospital Support Act (S. 1110) sponsored by Senators Bob Casey (D-Pennsylvania) and Chuck Grassley (R-Iowa), and the Save Rural Hospitals Act (S. 803) sponsored by Senator Mark Warner (D-Virginia) would change the way rural hospitals are reimbursed by the Centers for Medicare and Medicaid Services (CMS), as well as change some regulatory language those hospitals must meet. Other legislation, like the Rural Health Innovation Act of 2023 (S. 953) sponsored by Senator Marsha Blackburn (R-Tennessee), would create grant programs that would help rural hospitals provide access to emergency care.
“Every American deserves reliable access to health care,” Casey said in a statement. “Rural hospitals can be the difference between life and death in many parts of the U.S. Often, a rural hospital means not only safe, dependable access to health care and emergency health needs but economic safety and stability for an entire community.”
Companion bills for each of them have also been introduced in the House.
Whether Congress will act on any of the legislation introduced so far is still up in the air, Brock Slabach, COO of the National Rural Health Association (NRHA) said. With days left until a stopgap measure keeping the government from shutting down expires, agencies like the NRHA are hoping Congress will pass a budget for 2024 first.
Political scientist Michael Shepherd, assistant professor in the Department of Government and the Health and Society program at the University of Texas, Austin, said he doesn’t expect any movement on bills to help rural hospitals this year.
“I’m pretty pessimistic about there being actual policy change at the federal level,” he said in an interview with the Daily Yonder. “I think the Venn diagram of the handful of Republicans being up for re-election next year and (those) having a large amount of rural hospital closures in their state is pretty small. It’s really hard for me to imagine anything coming out of the Republican House at this point related to expanded government spending on something related to health care.”
Slabach, said the programs contained in the proposed legislation would help rural hospitals at a time when they desperately need it.
“I’m hearing more signals of distress in rural hospitals for a couple of reasons,” he said in an interview with the Daily Yonder. “One, all of the pandemic-era payments… are all gone. Two, volumes have not returned to pre-pandemic levels. And the third problem is inflation that has impacted the cost of operations… Those three things together have created the perfect storm jeopardizing many rural hospitals.”
Slabach said several bills sitting in Congress could provide rural hospitals with reimbursements they need to cover operating costs, as well as provide them with the flexibility they need in the face of staffing shortages and the changing face of healthcare.
For example, he said, the Rural Health Support Act would make permanent two key Medicare rural hospital programs – the Medicare-dependent Hospital program (MDH) and the Low-Volume Hospital (LVH) program. Permanently extending the programs would provide the hospitals with stable sources of revenue. The bill builds off of a recent two-year extension of the program through September 30, 2024.
“Both the MDH and LVH designation are critical to providers across the United States,” Alan Morgan, NRHA’s CEO said in a statement. “As rural America rebounds from the Covid-19 pandemic, now is not the time to let lifeline programs lapse. Reauthorization is critical to ensuring stability for the rural health safety net.”
Previously, Congress passed legislation that allowed rural hospitals to convert to Rural Emergency Hospitals (REH) as a way to stay open. The designation by CMS allows the hospitals to stay open and provide critical care to their communities as an emergency services-only hospitals. CMS reimburses the hospital at a higher rate, as well as provides them with an additional monthly facility payment each month. In 2023, that payment was $272,866 per month, but was set to increase each year per the legislation.
Slabach said 15 rural hospitals have chosen to adopt the REH designation as a way to stay open and provide their communities with emergency healthcare.
But in at least one case, the switch hasn’t worked. St. Mark’s Hospital in La Grange, Texas, closed in October after closing its in-patient services to become an REH. The hospital said its $13 million mortgage debt, years of revenue shortfalls, and escalating expenses left it with no other choice but to close.
“Even with the new REH designation, the Board was clear that St. Mark’s needed additional outside financial support to pay the hospital’s mortgage,” Dudley Piland, St. Mark’s Board Chair, said in a press release. “After several unsuccessful efforts to garner support, Hospital Centers of Excellence (HCOE), a local group of investors, stepped up with a plan that might be able to secure funding to continue healthcare services to the community… Unfortunately, servicing the hospital’s liabilities and mortgage debt was apparently too great.”
Slabach said it’s too early to tell if the REH designation is good or bad for rural hospitals and their communities, but that the new designation has allowed many rural hospitals to stay open at a time when their finances put them in jeopardy of closing.
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