Priority State and Federal Issues for Texas Rural Hospitals
MEDICAID UNDERPAYMENTS TO RURAL HOSPITALS
A big first step toward correcting Medicaid payments to Texas rural hospitals occurred in the 86th session of the Texas Legislature where rural hospitals were authorized for an $53 million dollar a year for FY 2020 and 2021, along with a commitment to return rural hospitals to a cost based reimbursement system by 2022 where they are paid full cost to treat Medicaid beneficiaries. However, additional funding estimated at $125 million a year, is needed in appropriations when the Legislature next meets to fulfill the promise. Rural hospitals cannot continue to lose money treating Medicaid patients. Full funding is critical to helping stop the closures of rural hospitals.
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 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 PAYMENT PROBLEM
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. Medicare views Medicare Advantage as private insurance not subject to most Medicare rules, yet it is paid for by Medicare and is Part C of the Medicare system. Congress needs to mandate that CMS and/or the Medicare Advantage companies fully and correctly pay rural hospitals for all Medicare beneficiaries.
For detail on these rural hospital issues and other concerns of Texas rural hospitals, please click here.
MEDICAID UNDERPAYMENTS TO RURAL HOSPITALS
A big first step toward correcting Medicaid payments to Texas rural hospitals occurred in the 86th session of the Texas Legislature where rural hospitals were authorized for an $53 million dollar a year for FY 2020 and 2021, along with a commitment to return rural hospitals to a cost based reimbursement system by 2022 where they are paid full cost to treat Medicaid beneficiaries. However, additional funding estimated at $125 million a year, is needed in appropriations when the Legislature next meets to fulfill the promise. Rural hospitals cannot continue to lose money treating Medicaid patients. Full funding is critical to helping stop the closures of rural hospitals.
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 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 PAYMENT PROBLEM
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. Medicare views Medicare Advantage as private insurance not subject to most Medicare rules, yet it is paid for by Medicare and is Part C of the Medicare system. Congress needs to mandate that CMS and/or the Medicare Advantage companies fully and correctly pay rural hospitals for all Medicare beneficiaries.
For detail on these rural hospital issues and other concerns of Texas rural hospitals, please click here.
