Senate bill would aid rural hospitals

Rural hospitals, which have faced a host of financial pressures, could get some help from a bipartisan bill in Washington, D.C.

U.S. Sens. Bob Casey Jr., D-Pa., and Chuck Grassley, R-Iowa, have sponsored the Rural Hospital Support Act (S. 4009).

The measure would extend some lifelines of federal support to rural hospitals, the senators said.

“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.," he said. "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.”

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The bill would permanently extend the Medicare-dependent Hospital (MDH) designation, which offers more assistance to smaller hospitals with a large share of Medicare patients. There are 174 hospitals with this designation, according to Grassley’s office.

The legislation would also make the Low-Volume Hospital (LVH) designation permanent as well. This program also provides more flexible payments for hospitals with a low number of Medicare recipients. Nationwide, 633 hospitals have the low-volume designation.

In addition, the bill also offers support for the Sole Community Hospital program, which aids providers that are the only source of inpatient care within a certain geographic area.

Sole community hospitals get higher payments based on their cost per discharge in a base year; the bill would offer an additional, more recent base year from which payments could be calculated, thus offering a more accurate picture of their costs.

“These programs bring a lot of value for rural residents and taxpayers,” Grassley said in a statement about the bill. “Small, rural hospitals offer good-quality health care at a cost that compares well with urban hospitals’ cost. Congress should extend the programs that help keep the doors open for rural Medicare beneficiaries.”

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The American Hospital Association has signaled its support of the bill.

The association said the measure “will help keep the doors open at rural hospitals and allow them to continue serving their local communities during this unprecedented time of sustained financial pressure and historic changes in care delivery.”

In addition, the Hospital & Healthsystem Association of Pennsylvania and the Iowa Hospital Association have backed the bill.

Chris Mitchell, president and CEO of the Iowa Hospital Association, said the programs “have an enormous financial impact on Iowa hospitals by providing funding for essential services and for hospitals to remain viable.”

The COVID-19 pandemic has battered the finances of some rural hospitals and added to staffing shortages. Even before the pandemic, many rural hospitals have had a difficult time.

Since 1990, more than 300 rural hospitals have closed their doors for good, according to the North Carolina Rural Health Research Program. And more hospitals are in a precarious position, industry analysts say.

Nearly 900 rural hospitals - about 40% of America’s rural hospitals - are facing a serious threat of shutting down, according to the Center for Healthcare Quality & Payment Reform.

More than 500 rural hospitals are at an immediate risk of closure due to financial losses, the center says. Another 300 rural hospitals are at high risk of closure because they have low financial reserves or rely heavily on government aid or other sources of revenue beyond patient volume.

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