The Kansas Hospital Association partnered with the hospital associations in Iowa, Missouri and Nebraska to respond to articles written in The Wall Street Journal that scrutinized the Critical Access Hospital program. The articles, Comparing Costs for Outpatient Care and New Risks at Rural Hospitals published in the Dec. 25, 2015, edition of The Wall Street Journal, criticized the Medicare cost-based reimbursement system and the volume of services offered in CAHs. In our joint response below, the hospital associations reiterated the importance of the CAH program in providing high quality, accessible care to rural residents across the country.
Historically, CAHs have received cost plus one percent reimbursement. Today, that isn't the case. All Medicare hospital payments, including those for services at CAHs, have been reduced by 2 percent through "sequestration." As a result, CAHs are paid less than the cost of providing care for Medicare beneficiaries. Moreover, CAHs face manifold challenges, include serving an older, poorer and sicker population with lower rates of commercial insurance coverage. Many of the nation's hospitals can cost shift Medicare or Medicaid losses to commercial payers; few CAHs have enough commercial payer volume to offset these losses. As many rural providers will point out, this "unbalanced" payor mix demands efficiency.
Although most CAHs are exempt from participation in quality reporting programs, some CAHs voluntarily participate. In many cases, even CAHs that choose to report don't have the volume of patients to accurately benchmark their quality against all hospitals. Moreover, CAHs know their capabilities and transfer patients to tertiary hospitals, when necessary, to provide safe, efficient care.
The services CAHs provide are essential to rural communities — they support rural economies, provide basic and lifesaving health care services and allow rural residents to seek care locally and age in place. The innovation taking place in CAHs reflects the traditional spirit of rural living — surviving and thriving on limited resources.