Priority State and Federal Issues for Texas Rural Hospitals
MEDICAID UNDERPAYMENTS TO RURAL HOSPITALS
The Texas Legislature must firmly direct the Texas Health and Human Services Commission to correct a $60+ million annual Medicaid underpayment to Texas rural hospitals and more clearly mandate that rural hospitals are to be paid full cost to treat Medicaid patients as required in the state budget since 1993. This is critical to helping stop the closures of rural hospitals.
Texas rural hospitals are estimated to lose as much as $200 to $300 million dollars a year starting in 2020 under the 1115 Waiver renewal because of revised rules. The Texas Health and Human Services Commission and the Legislature, supported by the Texas Congressional delegation, must find a way to replace a substantial portion those dollars by 2020 or more rural hospital closures are a certainty.
PROPERTY TAX CAPS
Half of Texas’ rural hospitals rely upon local property taxes to help cover indigent health care and support hospital operations, and local boards elected by and answerable to the local voters are best suited to make the decisions on the appropriate balance between local property tax rates and the needs of the community. Legislation capping local tax increases or reducing triggers for a rollback election should exclude smaller hospital districts with limited resources and leave them under current law. It should also include provisions allowing rural hospital districts to exempt from the rollback tax rate dollars used to cover uncompensated care which is primarily the result of federal and state mandates.
MENTAL HEALTH SERVICES ACCESS IN RURAL AREAS
Limited or no access to short-term mental health facilities and psychiatric care for much of rural Texas is an ongoing problem. Mental health patients in rural areas often end up in the local hospital emergency room where there is not appropriate staff or facilities to address many patient needs. Past increased funding for mental health has not alleviated the situation in rural Texas. The Texas Legislature needs to address targeted mental health funding for rural Texas.
STEP-DOWN RURAL HOSPITAL
Congress must create a step-down rural hospital to address the closure crisis and gives rural communities an option for sustainable care that are about to lose their hospital. Without this option, rural communities with a closed hospital will continue to find themselves with little or no emergency or other care.
MEDICARE CUTS NEEDS TO BE REVERSED
A major contributing factor in the closure of 10% of Texas’ rural hospitals closing in the last five years and the financial weakening of many more rural hospitals is Medicare payment cutbacks, Affordable Care Act penalties, and government mandates which have reduced annual Medicare payments to Texas rural hospitals by more than $50 million a year. Congress must restore Medicare cuts to rural hospitals or closures will continue.
340B DRUG PROGRAM REFORM
Rural hospitals must continue to receive the full 340B drug cost discounts to partially reduce their loss from treating uninsured patients. Congress should focus any changes in the 340B drug discount program to address documentable problems any and not use a broad program reform approach which will harm rural hospitals.
NO CHANGES FOR CRITICAL ACCESS HOSPITALS
The special Medicare rural Critical Access Hospital (CAH) designation has financially stabilized many Texas rural hospitals over the years and recognizes their unique and challenging operating dynamics. No changes should be made in this program although potential changes have been discussed in recent years by Congress and CMS. These safety-net hospitals are the backbone of rural health and emergency care.
MEDICARE ADVANTAGE ISSUES
The private insurance alternative to regular Medicare known as Medicare Advantage (MA) is creating negative and presumably unintended consequences for some rural hospitals as it does not coordinate with other Medicare payment provisions for rural hospitals and actually reduces their overall Medicare payments. Congress needs to mandate that CMS require MA companies to follow the same rules as standard Medicare for Critical Access Hospitals and MA should be viewed as regular Medicare for purposes of CMS calculating a hospital’s Medicare patient volume.
For detail on these rural hospital issues and other concerns of Texas rural hospitals, please click here.