Wednesday, August 21, 2013

OIG Proposal Could Endanger Some Critical Access Hospitals in Oklahoma

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Last week, the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services released a report calling for significant changes to the eligibility requirements for critical access hospitals (CAH). If adopted the proposed changes could shutter hundreds of rural hospitals across the nation, including some in Oklahoma, potentially leaving millions of Americans without convenient access to a hospital.

 “Critical access” is a regulatory designation available to small, rural hospitals in the U.S. that meet a defined set of standards. Aside from being located in a designated rural area, the hospitals must generally be located at least 35 miles from other hospitals. Under the original legislation establishing CAHs, states could exempt hospitals from the location and distance requirements by designating them as a “necessary provider” or NP.  According to the Oklahoma Office of Rural Health, almost half of the 34 CAHs in Oklahoma operate under the NP exemption. In 2006, Congress stripped states of the power to designate CAHs using the NP exemption, but hospitals that had received the NP exemption could continue to operate as CAHs.

The OIG proposes to force all existing CAHs to recertify, but without any NP exemption. Thus, existing CAHs certified under the NP exemption could lose their “critical access” designation and associated financial benefits, specifically 101% reimbursement of reasonable Medicare costs. These hospitals would be required to use rates set by the prospective payment system (PPS) or other fee schedules. The OSU Center for Rural Health fears that the financial burden caused by changes in reimbursement could lead to the closure of some CAHs in Oklahoma. Such closures would have ripple effects through entire communities as jobs and health care services are lost. To date, the OIG has not published a list of hospitals impacted by these proposed changes.

Fortunately, the OIG’s proposed changes to the NP exemption require legislative action by Congress. The National Rural Health Association (NRHA) and other stakeholders are currently advocating against changes to the NP exemption, but members of Congress need to hear from you. The NRHA has produced a set of key talking points that you can use when discussing this matter with your members of Congress.  The OSU Center for Rural Health will continue to post updates through our blog, Facebook page, and Twitter.  If you have any questions, please contact the Oklahoma Office of Rural Health at (405)840-6500.

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