Transcript Resource - Indiana Rural Health Association

August 7, 2013
Rural Health Care:
A National Rural Perspective
Alan Morgan
Chief Executive Officer
National Rural Health Association
National Rural Health Association Membership
2013
Rural Health Clinic Legislation
H.R.3458
• (1) Extend Medicare electronic health record incentives to
eligible professionals practicing in rural health clinics, and
(2) Extend Medicare quality reporting incentives to such
clinics.
• House has 24 cosponsors/Scores at zero.
HR 3849, S. 1680 – R-HoPE
HR 1157, S.643 - - HIT Fix ACT
• Allows Rural health Clinics and FQHCs to be eligible for
Medicaid EHR incentives
Why did Congress create varying
Medicare payments to rural providers?
RHCs:
1977 – “…to address an inadequate supply of
physicians serving Medicare beneficiaries in rural areas.”
•
12 states have nearly half or more of the Medicare population living in rural counties —with
Vermont (73 percent), Wyoming (69 percent), and Montana (67 percent) having the largest share.
NRHA Mission
The National Rural Health Association is
a national membership organization
with more than 21,000 members whose
mission is to provide leadership on
rural issues through advocacy,
communications, education and research.
Rural Health Disparities
 More likely to report fair to poor health
 Rural counties 19.5%
 Urban counties 15.6%
 More obesity
 Rural counties 27.4% VS urban counties 23.9%
 Less likely to engage in moderate to vigorous exercise: rural
44% VS urban 45.4%
 More chronic disease (heart, diabetes, cancer)
 Diabetes in rural adults 9.6% VS urban adults 8.4%
What’s Different About Rural Health Care?
Death by Zip Code
University of Washington Study, July 2013
• Largest report on status of America’s health in 15 yrs.
• Health equates to wealth
•
The study found that people who live in wealthy areas like San Francisco, Colorado, or
the suburbs of Washington, D.C. are likely to be as healthy as their counterparts in
Switzerland or Japan, but those who live in Appalachia or the rural South are likely to be
as unhealthy as people in Algeria or Bangladesh.
•
For example, women in Marin County, California, where the median household income is
$89,605, have the highest life expectancy -- 85 years -- while women in Perry County,
Kentucky, with median income $32,538, have the lowest life expectancy – just under 73
years.
•
Men living in wealthy Fairfax County, Virginia, median income $108,439, have a life
expectancy of almost 82 years, while men in nearby McDowell County, West Virginia,
where the median household income is $39,550, had the lowest life expectancy in the
country – 63.9 years.
Rural disparities/challenges
• Rural Health Clinics – Social Security Act
• Community Health Centers, created in the War on Poverty.
•
•
Rural disparities still grave.
Serve more challenging populations: language, cultural issues. Delayed
care - - sicker populations.
Rural is Different
 Strong sense of community responsibility,
propensity toward collaboration (unique ways
to develop and provide services needed.)
 Creation of regional networks to provide
greater access to state-of-the-art health care.
- IOM 2005
Medicare’s payments to 50
bed or fewer hospitals
represent less than two
percent of overall
Medicare budget.
Medicare patients accounted
for almost half of all stays
(45 percent) at rural
hospitals.
-AHRQ 2007
On average, costs per stay in
rural hospitals were less than
those in urban hospitals
(respective costs of $6,500 and
$9,000).
- AHRQ 2007
JAMA Article on CAH
Quality?
Rural is Different
 Rural hospitals have lower risk-adjusted
rates of potential safety-related events.
– Jolliffe 2003
Rural is Different
 Rural hospitals have significantly lower
adverse event rates than urban
counterparts.
– Whitener and McGranahan, 2003
Rural is Different
 Rural hospitals have significantly lower
rates of postop hip fracture, hemorrhage,
and hematoma.
– Cromartie, 2002
Rural is Different
 Rural areas score higher than urban on
appropriate provision of preventative
services related to breast exams/ family
history of cancer, influenza
immunization...
– Pol et al., 2001
Rural is
Different
NRHA Response
New report shows rural hospitals
have better value
Washington, D.C. – Small, rural hospitals nationally have equal or
better quality outcomes, and cost less per Medicare beneficiary than
their urban counterparts, according to data released by the National
Rural Health Association (NRHA). The intersection between cost and
quality defines the value proposition that rural systems of care provide
to the Medicare program. Despite the cost-effectiveness of rural
hospitals, many may be forced to close if Congress does not
reauthorize two rural hospitals programs set to expire on October 1.
Rural Hospitals Again in Congress’
Bulls-eye
Medicare Dependent Hospitals – Medicare funding to expire Oct. 1
Low-Volume Hospitals – Medicare funding to expire Oct. 1
Critical Access Hospitals – President calls for cuts.
Sole Community Hospitals -- vulnerable
RURAL RELEVANCE UNDER HEALTHCARE REFORM
A Performance Based Assessment
of
Rural Healthcare in America
January 23, 2012
A comprehensive study of
Rural Health Care in
America demonstrating
rural vs. urban cost
effectiveness, efficiency,
patient perception and
quality.
Rural Relevance Under Healthcare Reform Study
Study Area A: ACO Shared Savings (Medicare Beneficiaries)
 Approximately $7.2 billion in annual savings to Medicare
alone if the average cost per urban beneficiary were equal to
the average cost per rural beneficiary,
 Approximately $2.2 billion in annual cost differential
(savings) occurred in 2010 because the average cost per
rural beneficiary was 3.7% lower than the average cost per
urban beneficiary,
 Approximately $9.4 billion per year is the existing and
potential differential between Medicare beneficiary payments
for rural vs. urban.
© Copyright 2012 iVantage Health Analytics, Inc.
www.iVantageHealth.com
Rural Relevance Under Health Care Reform Study
Study Area B: Hospital Strength Index™
 Rural hospital performance on CMS Process of Care
measures is on par with urban hospitals,
 Rural hospital performance on CMS Outcomes measures is
better than urban hospitals,
 Rural hospital performance on HCAHPS inpatient patient
experience survey measures is better than urban hospitals,
 Rural hospital performance on price and cost efficiency
measures is better than urban hospitals.
© Copyright 2012 iVantage Health Analytics, Inc.
www.iVantageHealth.com
From 1980 to 1991 at least 360 rural
hospitals were closed. -An average of
30 per year.
The Inpatient Prospective Payment
System (PPS) led to the decline in the
numbers of rural hospitals.
Rural Hospital Closures: 1980-90
The 113th Congress
 The House:
 79 new Members, 44 Democrats and 35 Republicans;
 In 2010, there were 89 new members elected.
 This year’s class is experienced with 49 holding elective
office before being elected to Congress.
 The Senate:
 Democratic pick-up of 2;
 12 new Senators, 8 Democrats, (4 of whom are women),3
Republicans (1 of whom is a woman), and one independent
from Maine.
 All but one has held elective office previously. Six are
former House Members; two are former governors; and
three are former state officials.
Rural champions exit
Congress
• Many other rural champions are also leaving or have left –
Sen. Harkin (D-IA), Sen. Rockefeller (D-WV), Sen. Inouye (DHI), Sen. Conrad (D-ND), Sen. Bingaman (D-NM), Sen. Lugar
(R-IN), Sen. Snowe (R-ME).
• Senator Max Baucus (D-MT) – Staunch rural health advocate,
will not seek re-election in 2014.
•
•
•
CAH program
Rural primary care programs
Rural demonstration projects
• NOTE: Sen. Ron Wyden (D-OR) next in
line for Finance Chair.
The climate on Capitol Hill
is unchanged
“Nothing will pass if it
costs money.”
Democratic Response
“Nothing will pass
unless it saves money.”
Republican Response
Climate has led to proposal after
proposal of rural health cuts
• President’s budget
• House and Senate proposals to cut Medicare reimbursements
• House and Senate Appropriations cuts to rural health care
safety net programs.
EVEN MORE BURDENS:
• Government Reporting Bodies: CBO, IOM, HHS of Inspector
General
• Sequestration
• ARRA Meaningful Use
And wave after wave of cuts
for rural PPS hospitals…
25% CUT in DSH PAYMENTS TO RURAL HOSPITALS (Non-CAH)
Critical Access Hospitals are not immune…
PROPOSED CUTS IN FLEX AND OUTREACH GRANTS
41% of CAHs operate at a financial loss.
Medicare cuts will mean reductions in services, job loss, or
worse, hospital closures - - jeopardizing rural seniors’
access to care.
Senate Budget
• The budget does purport to cut $256 B in
Medicare spending over the next 10
years—no specifics were given.
• The Senate approved the measure but
the House is unlikely to vote on it (much
less pass it).
Budget Amendments
• Two important rural health amendments were
offered to the budget, one was accepted by the
Leader for a vote and one was not.
• Amendment 409 (Coburn): Repeal budget
neutrality change on the rural floor that benefited
Massachusetts to the detriment of all other states
• Amendment 612 (Bennet): Specific budget
authority to extend current or enact new rural
health programs
House Budget
• Congressman Paul Ryan introduced, and the
House subsequently passed, the same budget
he has put forward for three years.
• Budget would block grant CHIP and Medicaid
and convert Medicare into a premium support
model.
• The Senate is unlikely to vote on the package
and the President would surely veto the plan.
President’s Budget – CAH
concerns continue
• April 10
• Reduction of cost-based
reimbursement
• Elimination of CAH status if within
10 miles of another facility.
Tone has changed…
Language in Past Budgets: “In order to eliminate higher
than necessary reimbursement…”
Language in Current Budget:
CAHs are “small, rural hospitals that provide their communities
with access to basic emergency and inpatient care…Medicare
currently reimburses CAHs at 101 percent of reasonable costs.
This proposal would reduce this rate to 100 percent beginning
in 2014. ($1.4 billion in savings over 10 years.)
Affirmative Rural Health
Legislation
•S. 596: Fostering Independence Through
Technology
•S.328 Strengthening Rural Access to Emergency
Services Act
•S.R. 26: Senate Resolution on importance of rural
health providers
•S. 239: Extension of the FESC Demonstration
•H.R. 635: HEALTHY Vets Act of 2013
•S. 616: Conrad State 30 and Physician Access Act
Exemptions to Sequestration
Approximately 155 programs out of approximately 1,200 are
exempt from sequestration, including
Medicaid
Children’s Health Insurance Program
Veteran’s health benefit programs
Social Security
Medicare incentive payment program for adoption of
electronic health information technology
ALL OTHER MEDICARE PROVIDER PAYMENTS ARE
SUBJECT TO SEQUESTRATION—RHC, CAH, MDH,
AMBULANCE, ETC.
Impact of Sequestration
• Rural Health Care Safety Net is fragile
• 2% across the board cuts are
disproportionately harmful to rural.
• Rural hospitals operate at a narrow
financial margin - - in fact 41% are
operating in the red.
Example Medicare fee schedule
payment sequestration
Amount Allowed
Patient Copay (20%)
Normal net Medicare payment
2% Sequestration
Net payment from Medicare
$100.00
$20.00
$80.00
$1.60
$78.40
Actual payment decrease is $1.60, 1.6% of allowed
amount

Many agencies, including CMS, HRSA, NIH,
AHRQ, and CDC, still going through the
process of deciding how to implement cuts
and notifying stakeholders about how the
process will work.
Congressional Outlook
There does NOT seem to be any
significant push on the Hill to
eliminate sequestration right now
NRHA has and will continue to try to
exempt rural providers from these
devastating cuts.
Rural Economy
• Health care is the fastest growing segment of the rural
economy.
• On average, 14% of total employment in rural areas is
attributed to the health sector. Natl. Center for Rural Health
Works. (RHW)
• Each rural physician can more than 20 jobs in the local rural
economy. (RHW)
• The average CAH creates 107 jobs and generates $4.8 million
in payroll annually. (RHW)
• In most rural communities hospitals are the largest or second
largest employer
• Health care often represent up to 20 percent of a rural
community's employment and income. (RHW)
And, there is the confusion
of health care reform
Just five months until health exchanges open:
• Negative headlines
• Private insurers rate hikes
• Even ACA champions are calling implementation a “train
wreck.”
• Big “PR” mess for White House. Millions invested in
campaigns to education.
Medicare cuts enacted:
-Sequestration cuts – 2% for nine years
-Bad Debt Reimbursement cuts
-Documentation & Coding cuts
-Readmission cuts
-Multiple therapy procedure cuts
-ESRD reimbursement cuts
-Super rural laboratory extender – expired
-Outpatient hold harmless payments (TOPS) – expired
-508 reclassifications – expired
Slowdown In Health Cost Growth
Annual Change in Spending Growth
4.3%
3.9%
Hospitals
National Health Expenditures
Source: CMS OACT National Health Statistics Group; Historical Tables.
MEDICAID
• Disproportionately important to rural America (rural patients
and rural economies).
• 17.4 % of a state’s budget.
• One-half of all newly insured under ACA will be covered by
expanded Medicaid. (Estimates are 5 million in rural will be
covered.)
• Supreme Court decision: Allowed states to “opt-out” or
seeking waivers
• Many rural states are opting out – possibly leaving rural
uninsured
New Timeline - - déjà vu all over again.
• Medicare Physician Payment Update (SGR) - extend
through December 31, 2013.
• Work Geographic Adjustment - extend through
December 31, 2013.
• Payment for Outpatient Therapy Services - extend
through December 31, 2013.
• Ambulance Add-On Payments – extend through
December 31, 2013, and the air ambulance add-on until
June 30, 2013.
• Low-Volume Hospitals Adjustment - October 1, 2013.
• Medicare-Dependent Hospital (MDH) program - October
1, 2013.
How do we fight back?
Our message is powerful. An
investment in rural health:
– 1. Protects patients;
– 2. Protects the rural
economy; and
– 3. Protects taxpayers
Thank you - Stay Involved
 Website: ruralhealthweb.org
 Depends solely on grassroots
advocacy
 Members have access to:
 Periodic Washington Updates
(webinars):
[email protected]
 Rural Health Blog
http://blog.ruralhealthweb.or
g
Go Rural!
Alan Morgan
Chief Executive Officer
National Rural Health Association