As Congress continues to debate the last-ditch Republican effort to repeal and replace the Affordable Care Act (ACA), the deadline to permanently renew funding for rural hospitals faced with high costs and limited resources may go unnoticed.
Hundreds of qualifying rural hospitals rely on payments provided by the Medicare Dependent Hospital (MDH) and the Low Volume Hospital Adjustment (LVHA) programs, both of which expire on September 30. Rep. Tom Reed (R-NY) introduced the Rural Hospital Access Act in April, which would make the programs permanent, but the bill has not yet moved through committee.
Instead, Republican lawmakers are focusing their efforts on a bill to repeal and replace the ACA, led by Sens. Bill Cassidy (R-LA) and Lindsey Graham (R-SC). The measure, which has yet to receive a score from the Congressional Budget Office (CBO), would lead to a loss of health coverage for approximately 32 million people and would give states the right to remove protections against insurance companies that charge higher premiums for people with pre-existing conditions.
The proposal will have a big impact on how millions of Americans receive their health insurance — and how many will be dependent on rural hospitals for their primary means of health care.
Under Graham-Cassidy, states would fall under a block-grant program, and funding would be distributed based on each state’s Medicaid expansion policy under the ACA. States that expanded Medicaid would see a decrease in funding and would have access to funds from the already existing disproportionate share hospitals (DSH) program, which helps fund hospitals with a large number of uninsured patients and patients who rely on Medicaid.
Experts say that allowing states to pull funds from the DSH program is a furtive acknowledgement that Graham-Cassidy will increase the number of uninsured people. Those people will continue to rely on hospitals, which will, in turn, rely on DSH funds to cover the costs of the medical care.
For rural America, the impact of this policy would be especially devastating. If Graham-Cassidy passes, and the MDH and LVHA programs aren’t renewed on top of that, low-income residents depending on rural hospitals as their only means to get proper health care will doubly suffer.
“If these programs were allowed to expire, the number of hospitals that would close would be great,” Diane Calmus, government affairs and policy manager at the National Rural Health Association, told ThinkProgress. “These are programs that Congress designed recognizing that rural hospitals are different. They face different challenges.”
Calmus added that there is a strong sense of urgency both for the Rural Hospital Access Act and the Save Rural Hospitals Act, introduced by Reps. Sam Graves (R-MO) and Dave Loebsack (D-IA) in June. The latter would increase payments to rural health care providers under Medicare.
“These are very vulnerable classes of hospitals… it’s a big concern,” Calmus said. “Unfortunately, Congress often likes to wait until the last possible second to get its homework finished.”
Conversations surrounding health care in Congress have largely overlooked the challenges faced by rural hospitals, including constrained financial resources and limited staff. Approximately 51 million people rely on the 1,800 rural hospitals in the country. Patients are typically older, uninsured, and more likely to suffer from chronic illnesses, such as hypertension, cancer, and chronic bronchitis.
Rural providers grapple with limited space, fewer services and technologies, and smaller staff. They also struggle to meet the high cost of drugs that treat rare diseases because of a little-known exclusion in the ACA that precludes rural hospitals from receiving discounts on these drugs.
Michael Topchik, national leader of the Chartis Center for Rural Health (CCRH), said a key reason for the financial constraints faced by rural hospitals is that “we’re caught in a time of retractable federal expenses.” Many hospitals are still dealing with the effects of the 2013 government sequestration, for instance, which resulted in a 2 percent cut in Medicare reimbursements.
“A cut matters to every provider in the country,” Topchik told ThinkProgress, adding that, for rural hospitals, the impact is greater. “Sixty percent of their reimbursements are from Medicare and Medicaid.”
Financial strife has led to cutbacks in services provided, including maternity care and substance abuse treatments, as well as hospital closures. Since 2010, more than 80 rural hospitals, primarily located in the South, have shut down due to financial instability — almost double the amount between 2005 and 2009. According to a study by iVantage Health Analytics, almost 700 rural hospitals are on the brink of being shut down.
The impact of these hospital closures could be disastrous, forcing patients to travel hours to receive treatment or opt not to receive treatment at all. Calmus said the closures have the potential to ruin entire communities, which rely on the hospitals as their main source of employment and industry.
Topchik said his office is eagerly awaiting the CBO score on the Graham-Cassidy health care bill before it issues an assessment on the bill’s impact on rural health providers. He added, however, that in their analysis of the Better Care Reconciliation Act (BCRA), an earlier Republican health care proposal that the Senate rejected in July, the effect on rural hospitals was “crushing.”
“Our research shows that the reimbursement loss to rural hospitals would be two times the amount under the sequester,” Topchik said.
Health care advocates released a statement Monday in opposition to the Graham-Cassidy bill, arguing that it “repackages the problematic provisions of the [BCRA].” The Federation of American Hospitals and the American Hospital Association have also come out against the bill due to its deep Medicaid cuts.
Calmus said there are numerous reasons why Graham-Cassidy falls dangerously short of protecting rural Americans.
“The rural marketplaces are not robust. There are much higher premiums in rural America. Rural Americans are less likely to have employer-sponsored health insurance. We don’t see that marketplace issue addressed in this bill,” she said. “We don’t see the special needs of the rural population… addressed in this bill. We don’t see anything addressing the hospital closure crisis.”