Health Care: Providing Critical Access to Rural Hospitals

The low rate of Medicare reimbursement has long plagued NH’s hospitals. However, a federal program is helping rural hospitals to recoup more of their costs. By the end of the year, NE’s 13 rural hospitals are expected to achieve the Critical Access Hospital designation.

Created by the U.S. Congress in the Balanced Budget Act of 1997, the Critical Access Hospital program is designed to support limited- service hospitals in rural areas. It was created to preserve vital emergency medical and safety net services in rural communities, while providing incentives for rural hospitals to develop locally integrated health care delivery systems.

Mike Hill, president of the NH Hospital Association in Concord, says rural hospitals have a disproportionate number of Medicare patients and the designation was developed to help them stay in business. To be eligible for the program, hospitals must be located in rural areas, provide 24-hour emergency care services and have an average length of patient stay of 96 hours or less. Hospitals must pass a stringent examination before being accepted into the program.

The application process includes a market study, financial feasibility study and a component unique to NH – an access improvement plan. Once achieving the designation, hospitals can bill Medicare under a new provider number to be reimbursed for allowable costs, says Paula Minnehan, vice president of finance and rural hospitals for the NH Hospital Association.

Under the regular Medicare reimbursement, hospitals are not guaranteed they will be reimbursed costs. Critical Access Hospital reimbursements are financially more advantageous, Minnehan says. “We have seen, on the financial side, that it’s a positive thing. Most of the hospitals were running under negative margins. Now they are breaking even or having slightly larger profit margins,” she says.

With the designation, hospitals can only have 25 patient beds and limit patient stays to 96 hours. Minnehan says there have been no problems associated with the 25-bed limit as most rural hospitals already offer extensive outpatient services. Eleven of the 13 eligible NH hospitals have earned the Critical Access Hospital designation. Speare Memorial Hospital in Plymouth and Huggins Hospital in Wolfeboro were waiting for final approval in April.

Monadnock Community Hospital in Peterborough achieved the designation in December 2004. “We have a fairly high Medicare load and the reimbursement improves with the Critical Access designation,” says Peter Gosline, president.

He says the process of achieving the designation allowed the hospital to reach out to the community, determine existing needs and develop a critical access improvement plan. This led to the creation of chronic disease management programs at the hospital as well as improved access to primary care services and increased support to emergency services providers in the area.

Copyright Laurentian Business Publishing Inc. Jun 01, 2005