OIG Suggestion to Decertify Critical Access Hospitals Draws Criticism

The American Hospital Association and the National Rural Health Association have objected to the HHS Office of Inspector General's recommendation that CMS reassess and decertify many critical access hospitals for failing to fulfill location requirements.

HospitalThe OIG issued a report containing its recommendations yesterday, stating Medicare spent an extra $449 million in 2011 reimbursing facilities that don't meet location requirements for critical access hospital status. Medicare reimburses critical access hospitals 101 percent of their reasonable costs rather than using the typical prospective payment system rates or fee schedules to ensure people in rural areas have access to hospital services.

AHA Vice President of Payment Policy Joanna Hiatt Kim has called the OIG's suggestions "inappropriate" and demonstrative of a lack of understanding of rural healthcare delivery, according to an AHA News report. If CMS follows the report's advice, many rural hospitals will close due to the loss of Medicare funds, and patients could potentially lose access to needed services, according to the AHA.

The NRHA agreed the recommendations would threaten access to care in rural areas, stating in a blog post that more than 800 rural hospitals would lose their critical access hospital status. The OIG report essentially aims to "kill rural healthcare," NRHA CEO Alan Morgan said in the blog post.

Based on 2011 claims data, nearly two-thirds of critical access hospitals wouldn't meet the location requirements needed to qualify for the program if they were to reapply, the OIG found. In order to be certified as a critical access hospital, a facility must meet certain location requirements, including being in a rural area and being a certain driving distance from other hospitals. Prior to 2006, states could exempt hospitals from the location requirements on the grounds that they're "necessary provider" hospitals. These necessary provider hospitals are permanently exempt from the location requirements —an exception the OIG suggests eliminating.

More Articles on Medicare Payments:
OIG: Medicare Could Save Millions by Reassessing Critical Access Hospitals
Medicare Financial Change Curbed Dialysis Drug Use, Study Finds
AHA Asks for Medicare Advantage Pay Cut Clarification

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