Rural Kan. hospitals fear re-designation proposal

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WICHITA, Kan. (AP) - Leaders at rural hospitals across Kansas are concerned about the future of their facilities in light of proposed changes by the federal government to critical access designations for hospitals within 35 miles of another hospital.

Many rural hospitals already are struggling to make ends meet, and removing the critical care designation would take a big chunk of revenue away from them. Of the state’s 83 critical access hospitals - more than in any other state - 72 would be affected by the change.

“I don’t think there’s any question that it would send some of those hospitals over the edge,” Tom Bell, president and CEO of the Topeka-based Kansas Hospital Association, told The Wichita Eagle (http://bit.ly/NoETVX ). “They’re fragile right now, and in addition to this issue kind of looking over their shoulder, there are so many regulatory burdens.”

The Department of Health and Human Services issued a report last fall suggesting the federal government rethink how rural hospitals are designated for purposes of Medicare reimbursements. Among the report’s proposals was re-evaluating critical access designations, which allow those hospitals to recoup 101 percent of their costs from Medicare, and instead pay them the same as at other Medicare-certified hospitals.

The change could affect how much the nation’s 1,300 critical access hospitals get reimbursed, part of the federal government’s effort to contain the growth of Medicare.

Roughly half of the critical access hospitals in Kansas already operate at a loss, according to the American Hospital Directory, which uses data based on Medicare filings by hospitals. The entire Kansas congressional delegation has signed a letter voicing concerns to Health and Human Services Secretary Kathleen Sebelius, the state’s former governor.

Losing critical access hospital designation would cost Kingman Community Hospital in southern Kansas more than $1 million a year in reimbursements because it’s less than 35 miles from Harper and Pratt Hospitals, CEO Ed Riley said.

The hospital has lost an average of $200,000 to $400,000 per year for the last few years, Riley said, with 65 percent of its patient volume being Medicare recipients.

“When we already operate in the negative, that would mean this hospital probably wouldn’t survive,” he said.

Bill Widener, CEO of Harper Hospital roughly 11 miles away from the hospital in Anthony, said losing the critical access designation would cause his facility to lose its emergency department.

“They’re not going to take away (the designation) from one or the other. You take both,” he said.

Bell, the KHA president, said Medicare is the dominant payer for most critical access hospitals. While there were some reimbursement protections built into the program, those have been diluted in recent years, he said.

“The biggest issue is if that designation were removed, it would literally kill a number of rural hospitals in our state,” Bell said. “I just don’t think there’s any question about that.”

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Information from: The Wichita (Kan.) Eagle, http://www.kansas.com

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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