Senators Object to Proposed Medicare Cuts to Critical Access Hospitals

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By Nathaniel Weixel  


A bipartisan group of 20 senators sent a letter Aug. 23 to Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Orrin Hatch (R-Utah) objecting to proposed Medicare reimbursement cuts to critical access hospitals (CAHs), citing the hospitals' importance to rural communities.

Led by Sen. Tammy Baldwin (D-Wis.), the lawmakers said they opposed a provision in President Obama's proposed fiscal year 2014 budget that would reduce Medicare reimbursement levels for CAHs and remove the “critical access” designation for any hospital within 10 miles of another hospital.

The lawmakers said CAHs “play a vital role providing access to health care, economic security for families and seniors, and jobs to rural communities across the nation. These hospitals are safety nets for hundreds of thousands of Americans, providing inpatient and outpatient services, as well as 24-hour emergency care. Given the importance of CAHs throughout rural America, it is essential that these hospitals receive proper Medicare reimbursement.”

CAH certification was created by the Balanced Budget Act of 1997 to ensure that rural beneficiaries had access to services. In exchange for meeting several requirements, such as being a certain distance from other hospitals, Medicare reimburses CAHs at 101 percent of their cost.

Under the proposal, a CAH would lose its certification if it is within 10 miles of any hospital, regardless of whether the nearby hospital is capable of providing the services that would be lost if the CAH closed, the lawmakers said in the letter.

“I am deeply concerned by this proposal,” Baldwin said in a statement. “If enacted, these policies would compromise access to health care and weaken rural economies in Wisconsin and across the country.”

Co-signers of the letter included Sens. Chuck Grassley (R-Iowa), Mike Crapo (R-Idaho), Tom Udall (D-N.M.), Al Franken (D-Minn.), Roger F. Wicker (R-Miss.), and Tom Harkin (D-Iowa), among others.

OIG Report

The lawmakers in the letter also took issue with an Aug. 15 Department of Health and Human Services Office of Inspector General report that proposed decertifying all CAHs within a certain number of miles from the nearest hospital (24 MCR 1015, 8/16/13).

The report concluded that the Medicare program and beneficiaries could have saved $449 million in 2011 if the Centers for Medicare & Medicaid Services had been able to decertify all CAHs operating within 15 miles of another hospital. OIG recommended CMS certify only CAHs that provide services to beneficiaries who would otherwise not have access to a hospital.

Nationally, the OIG recommendation would rescind the critical access status for roughly two-thirds of the nation's CAHs. “This change would have a devastating impact on rural communities throughout the country and could unintentionally strip sole community hospitals of their designation,” Baldwin said.

“We strongly support smart, targeted Medicare reforms that will reduce costs and maintain a high quality of care,” the lawmakers wrote in the letter. “This proposal does not qualify.”


The letter is at

The Office of Inspector General report is at

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