MILWAUKEE (AP) — U.S. Sen. Tammy Baldwin is leading a fight against proposed cuts to Medicare reimbursements for rural hospitals that she says will reduce access to health care and weaken rural economies across the nation.
The Wisconsin Democrat and 19 other senators sent a letter dated Thursday to Senate Finance Committee Chairman Max Baucus and Sen. Orrin Hatch, the ranking member on the committee, protesting changes to how Medicare classifies and pays critical access hospitals, or CAHs. The facilities provide services in rural areas that have few other health care options and generally receive higher Medicare reimbursements.
President Barack Obama’s administration has proposed removing the CAH designation for any hospital within 10 miles of another and reducing the rate of reimbursement from 101 percent to 100 percent of reasonable costs in the 2014 fiscal year budget. The Office of Management and Budget estimates that would save more than $2 billion over 10 years, with some $690 million of that coming from eliminating the CAH designation for hospitals that are close to others.
Baldwin’s office says at least eight hospitals in Wisconsin and 71 nationwide would lose CAH status under those changes.
“If enacted, these policies would compromise access to health care and weaken rural economies in Wisconsin and across the country. I fear that these proposals could even force many rural Wisconsin hospitals to shut their doors — causing a ripple effect on our economy and leaving many without access to care,” Baldwin said in a statement Friday.
There are more than 1,300 CAHs in the United States, according to the Department of Health and Human Services’ Office of the Inspector General. They provide care to about 2.3 million Medicare beneficiaries in 2011 at a cost of about $8.5 billion.
Hospital groups, including the National Rural Health Association, note this represents only about 5 percent of the Medicare hospital budget and the agency spends less per patient in rural areas than urban ones.
Obama’s plan would affect CAHs that have been deemed necessary providers. CAHs must be in rural areas and more than 35 miles from the nearest hospital, or more than a 15-mile drive in mountainous terrain. Before Jan. 1, 2006, states could exempt hospitals from the distance requirement by designating them as necessary providers. Most states did this with hospitals in areas with few health care providers or high unemployment or poverty rates.
Baldwin also expressed concern about an Office of the Inspector General report last week that would go even further than the president’s plan.
Medicare generally has verified that hospitals meet the CAH distance requirement when they enroll, but not after. If it did, about 850 of the more than 1,300 CAHs would no longer qualify for that designation, the report said. It estimated Medicare would have saved an average of about $860,000 per decertified CAH in 2011.
The Wisconsin Hospital Association has said such a change would affect 53 of the 58 CAHs in Wisconsin and could lead to many rural hospitals closing.
The White House did not immediately respond to a request for comment.