Facilitating Change. Preserving Access.

Should it take six (6) years to define a crisis?

With kudos to Sen. Grassley (R-IA) and his staff for envisioning the healthcare access crisis for rural America back in 2015, the dilemma for rural Americans has only intensified and become more “acute”.

When Sen. Grassley introduced S.1130 in 2015, about 50 hospitals, designated as rural by CMS, had closed since 2010. In the last five (5) years, that number has tripled. UNC had reported that about 500 rural hospitals were insolvent and in danger of closing. In the same period since this study was done, that number has quadrupled.

Those who are looking for/requiring trends or patterns as justification for definitive action, certainly cannot ignore the patterns that are escalating in the demise of rural healthcare providers in the last decade. Without the added financial underpinnings provided through the CARES Act in 2020, the trend in closures of rural hospitals would have been significantly exacerbated in the past year under the resource stress of the COVID-19 pandemic and the curtailment of elective and outpatient procedures which are the lifeblood of small, rural hospitals.

The easing of restrictions and restart of elective procedures may have come too late for many of these facilities. Discussions of facility mergers and joint ventures are rampant with many talks being suspended or postponed due to the uncertainty regarding reimbursement, provider relocation, population out-migration, and competitor intrusion. Rural hospitals are closing wings, moth-balling licensed beds, embracing telemedicine for specialty referrals, and home health in an effort to move to a PDPM, patient-centric care model.

One of the telling statistics in the body of S.1130 was the percentage of trauma deaths compared to total population. Rural America accounts for 17% or

f the total population but and astounding 60% of trauma deaths. These numbers are for the first decade of this millennia and, with the escalation in closures, is certainly more pronounced, today.

Since hospitals and their related services are one of the largest employers in a rural town or city, its closure has a significant ripple effect on the economic vitality of the community; so much so that it was estimated that the 283 at risk hospital closures in 2014 would have resulted in a $10.6 trillion reduction in rural America’s GDP. Therefore, in the true sense of socio-economic impact, the closure of a rural hospital could be defined as a sentinel event in community survival.

Therefore, can S.1130 (Rural Emergency Acute Care Hospital Act) do what its acronym, REACH, intends? The answer lies in what regulatory and reimbursement guidelines are promulgated from the legislation. I have referred to the Bill as “half a loaf” due to the lack of detail and unanswered questions that, I assume, the legislature would leave to be filled in by the pundits at HHS. My questions are as follows:

  1. Why limit licensed bed size to fifty (50) or less? Many hospitals have already reduced capacity to 50 or less for volume reasons but still have licensed capacity of 100 beds or more.
  2. Why require the surrender of all licensed inpatient bed capacity? As the legislation states, ‘there may be other valuable uses for those beds that don’t conform to short term acute care guidelines’. To this end, beds could be converted to IRF (Inpatient Rehab Facility), LTACH (Long Term Acute Care Hospital), Gero-psych beds; all of which require licensed acute care beds for certification by CMS. Additionally, a few inpatient beds could be strategically important for observation purposes (72 hour stay) where specialists are available through telemedicine, to manage certain heart attack and stroke patients, remotely.
  3. What is the CMS reimbursement model of 110% of cost based upon? Since CAHs are already in the cost-based per diem model, how would DRG-based hospitals be transitioned into model and how would commercial insurers ramp up to ensure that payments flow easily once conversion certification by CMS is achieved?
  4. Could a mix of Acute and LTC beds be achieved in a multiplicity of combinations to better suit the unique needs of a community?
  5. Would/could HHS provide capital to bolster EMS services, carry out physical plant conversions/improvements? The mere provision of a conversion path does not guarantee success. Most rural hospitals are 50-60 year old physical plants that are poorly laid out, inefficient, and in need of significant upgrades to infrastructure and IT to be able to effectively move to patient-centered care.
  6. How about hospitals that have already closed? Can qualified community representatives or multi-state providers apply for REH designation in those cities and towns?

If clear guidelines can be developed and the REH certification through model demonstration projects be shown to be a viable alternative to the traditional acute care hospital, many communities may embrace this model. The pandemic showed us that telehealth was an effective route to manage patient care whether in the home or specialist intervention in an emergency department. When this bill was originally introduced, telehealth was a pipe dream with no “plug and play” diagnostic and monitoring modalities interfaced. Today, telehealth is recognized and reimbursed by CMS, including the associated diagnostic and monitoring modalities. The pandemic has been devastating in the mortality and morbidity it has created. However, the silver lining may reside in the warp speed with which alternative delivery systems have been operationalized and how, in many rural communities, it may be the answer to access and the restoration of critical healthcare services in rural America.