Our Position on Rural Health Issues

The 150 hospital members of the Texas Organization of Rural & Community Hospitals provide health care to more than 3 million rural Texans. These rural hospitals serve as the rural health care safety net in Texas – often when no other care is available. The ability to effectively and efficiently provide that care is driven by state and national government policies. The following state issues are priorities for TORCH and its member hospitals for the 81st session of the Texas Legislature: 

High Priorities

Physician Recruitment/Corporate Practice of Medicine

Allowing rural hospitals to employ physicians is critical to future recruitment and access to health care services. Current Texas state law is interpreted to prohibit corporations, including hospitals, from employing physicians, even when physicians request to be employed. This antiquated law, which exists in only a few states, has become a barrier to the recruitment of physicians into rural Texas communities as more and more physicians are demanding employment over the challenges of starting their own practice. Further, allowing the employment of physicians by hospitals will help address several health policy issues including out-of-network insurance payment issues for hospital based physicians and system integration.

Texas state law should allow for continuation of the historic level of supervision for hospitals in counties of 50,000 or less population, Sole Community Hospitals, and Critical Access Hospitals (CAH) - which is an established state standard for alternative policy for rural hospitals. New rules by the Texas Board of Pharmacy impose an undue burden on rural hospitals requiring them to increase direct supervision of pharmacy staff by licensed pharmacists, which are often not available. The historic level of pharmacy supervision in rural Texas hospitals has been safe and effective.

A Rural Safety-net Hospital Infrastructure Fund should be established by the state to assist rural communities with replacing aging and antiquated hospitals (similar to the state’s courthouse preservation fund which assists local communities with matching funds). State assistance would also afford an opportunity for replacement facilities to incorporate the most advanced health information systems and energy efficiency technology. Many Texas rural hospitals were built more than 40 years ago with federal Hill-Burton Act funds. The federal program no longer exists and many of those hospitals are beyond renovation and often out of compliance with new fire and building codes. A number of these hospitals are located in counties with limited financial resources and an inadequate tax base to support the full cost of replacement.

Continuation of the Medicaid cost based reimbursement policy for rural hospitals through budget Rider 52 of the Texas HHSC requested FY10-11 budget must remain a priority for the state. Cost based reimbursement to hospitals in counties of 50,000 and less population, Sole Community Hospitals and Critical Access Hospitals (CAH) is vital to maintaining access to care for Medicaid beneficiaries. These safety net hospitals, with lower volumes and narrow financial margins, rely heavily on this payment methodology. This reimbursement language should also be placed in statute (rather than solely in an appropriations rider) and in all future Medicaid reimbursement plans.

Initiatives to increase the number of physicians, nurses and other health care professionals in rural areas are critical for continued access to rural health care. The state should expand and increase financial support to programs and efforts that provide incentives for health care professionals to work in rural areas. This includes loan repayment for all levels of health professionals locating in rural areas, higher Medicaid reimbursement for physicians with a rural practice location (Medicare does this), elimination of any state retirement system penalties for nurses returning to work in a rural area and reentering the retirement system, and an increase in funding for rural provider recruitment programs. Growing the number of medical school residency slots (especially in rural areas) and increased nursing school faculty funding is imperative with emphasis on schools that traditionally place graduates in rural areas. Increased funding for long term “pipeline” programs that promote early student interest in health careers should also be a state funding priority.

Texas rural hospitals support the efforts of the State to insure as many Texans as possible with the Texas Health Reform Plan under SB10 and the related 1115 waiver request. Rural hospitals also support the funding mechanism proposed by the Texas Health and Human Services Commission to exempt rural hospitals from any funding swaps and maintain cost based reimbursement under Medicaid. However, any insurance product provided to the uninsured must have adequate inpatient care coverage and affordable access to primary care services to offset the cost of services so as to not create a new population of underinsured Texans.

Legal liability for rural hospitals should remain as outlined in current Texas law. Changes effected by the Legislature in 2003 have placed hospital and provider liability exposure at reasonable levels for all parties. Any increase would have a negative financial bearing on the viability of many rural hospitals. Besides preservation of the current cap on nonmonetary damages, all providers who volunteer in times of crisis or serve in the emergency rooms must also be protected.

Insurance plans provided to public employees and retirees, such as ERS and TRS, should require that rural hospitals receive cost-based reimbursement as is allowed by Medicaid. Also, moving all state health benefit programs to an “any willing provider” status would prevent a gap in network coverage for teachers and government employees and retirees.

The current exemption in Health and Safety Code Chapter 108 for rural hospitals to report certain health data needs to continue. Many rural hospitals in Texas do not have the personnel and technology resources to provide health data requested by the state. Furthermore, the reporting of health data by small rural hospitals does not provide statistically relevant information because of the extremely low volume of patients. Any consideration to remove the rural hospital exemption must be accompanied by adequate financial resources and training to enable them to comply.

The option to non-subscribe from the Texas workers compensation program should be extended to publicly-owned rural hospitals. All Texas rural hospitals should have a “level playing field” in providing occupational injury benefits to their employees. Privately owned rural hospitals, like all businesses in Texas, may participate in the state managed workers’ compensation system or administer their own benefits by “non-subscribing” or “opting-out” of the state system. Public hospitals should be allowed the same option.

Texas rural hospitals and health providers look to ORCA for a number of support programs. TORCH supports this agency and supports increased funding for ORCA rural health related programs.