WICHITA, Kan. (AP) — A proposal by a federal agency’s fiscal watchdog would reduce Medicare payments for 72 rural Kansas hospitals, raising fears that some facilities in sparsely populated communities might have to close.
The report from the inspector general’s office of the U.S. Department of Health and Human Services has alarmed hospital administrators as well as some lawmakers in Washington, D.C. The proposal involves “critical access hospitals,” which receive higher Medicaid payments under a program meant to help rural hospitals.
Kansas will be especially hard-hit, because with 83 such hospitals, it has more than any other state in the nation. The recommendations released last month would slash the higher Medicare reimbursements for rural hospitals that are within 35 miles of another hospital.
“It is a huge, significant, compelling issue for Kansas — one with great consequences,” Republican U.S. Sen. Jerry Moran said Friday in a phone interview.
The proposal would affect 846 hospitals nationwide, according to the report from the Office of Inspector General at HHS. The move could save $1.1 billion a year and would ensure that hospitals receiving the special payments “serve beneficiaries who would otherwise be unable to reasonably access hospital services,” the report said.
The distance requirement existed before, but state governors previously were allowed to designate other facilities based on such factors as an area’s poverty level and the availability of other health care services in granting exceptions. Critics say the proposal would leave the decision in hands of the federal government.
Among those that would be affected is Kearny County Hospital in Lakin, where hospital administrator Benjamin Anderson said the financial impact could deal a “fatal blow” to the western Kansas facility. The proposal would cut more than $1.4 million in revenues out of the hospital’s $20 million budget.
“We are just wrapping our brain around the impact of this,” Anderson said. “It would certainly change what we would be able to offer. We would not be able to maintain obstetrics services.”
Although Kearny County Hospital is just 25 miles from another hospital, it delivers babies from 10 southwestern Kansas counties where obstetrics services are not available, he said. Kearny County is a mostly farming region with an aging population of only about 4,000 people, but the hospital is on pace this year to deliver 225 babies this year.
Anderson is particularly passionate about the issue because he credits the small hospital in Ashland, where he was previously administrator, for saving the life earlier this year of his then-3-week-old daughter, Naomi. Doctors there diagnosed a rare heart condition when she was brought into the emergency room.
“If we didn’t have that critical access hospital there — with the trained staff that that funding allowed there — we would be a family of three instead of four,” he said. “We would have lost her.”
The Kansas Hospital Association recently wrote a letter to HHS Secretary Kathleen Sebelius urging her to oppose any attempt at enacting the recommendations.
Thomas Bell, the group’s president and CEO, said in a phone interview that the proposal does nothing to address what the future of rural health care should look like.
“The population in rural Kansas tends to be a little older, and it is aging, so the need for health care services in rural communities is not going to go away,” Bell said.
Moran, a ranking member of the appropriations subcommittee for HHS, said that when similar plans came up in the past, he wasn’t worried because he didn’t think there was a real threat. He no longer has that confidence.
“The environment is changing in which it is a threat,” Moran said. “We have to take it seriously.”
When Sebelius was governor of Kansas, she helped get the critical access designation and funding for about a third of the state’s critical access hospitals.
“I hope she remains as committed to rural health care as when these were her direct constituents,” Anderson said.