Snowe/Collins Cosponsor Bill to Help Rural Hospitals

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Snowe/Collins Cosponsor Bill to Help Rural Hospitals

Maine stands to gain $148 million over ten years from this legislation.How will an additional $148 million save us money?[ 06-09-2003: Message edited by: Paul Mattson ]

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Snowe/Collins Cosponsor Bill to Help Rural Hospitals

[i]AMG Editor: Any guesses as to how this bill - which is still in committee - will impact Gov. Baldacci's Dirigo Health Plan?[/i]
Date: Tue, 8 Apr 2003
From: (Elizabeth Wenk)
Subject: Snowe backs bill to help rural hospitalsContact: Dave Lackey or Elizabeth Wenk/202-224-5344
SNOWE BACKS LEGISLATION TO ENSURE VIABILITY OF RURAL HEALTH CARE
Maine would receive $148 million in additional funding to help rural hospitals serve more patients, meet financial needsWASHINGTON, D.C. As a member of the U.S. Senate Rural Health Caucus and a leader in developing health care policy, U.S. Senator Olympia J. Snowe (R-Maine) today joined a bipartisan group of Senators, led by Senators Craig Thomas (R-WY) and Kent Conrad (D-ND), in introducing "The Health Care Access and Rural Equity Act," to ensure the financial viability of rural hospitals and access to care by eliminating Medicare payment disparities, which currently exist between urban and rural areas."Rural health care providers are often the backbone of health services for many Americans, including thousands in Maine ñ but lower patient volume and transportation obstacles are putting a real strain on providers. In these tight budget times, many rural hospitals are suffering from financial disparities that are forcing them to make tough treatment choices," said Snowe, a member of the Senate Finance Committee, which oversees Medicare. "This legislation will level the playing field between urban and rural hospitals to not only ensure access to quality care for those living in rural areas, but also to expand services for more families. Disparities within Medicare payments will be eliminated and funding will be boosted to help the hospitals. According to the American Hospital Association, Maine stands to gain $148 million over ten years from this legislation."According to the National Rural Health Association, rural hospitals provide essential care for more than 54 million people. Maine has the tenth highest percentage of residents who are 65 and older and Medicare patients represent 44 percent of all hospital services provided at Maine hospitals, according to the Maine Hospital Association. "The discrepancy between expenditures spent on Medicare patients and the rate of reimbursement from the federal government is driving up the cost of health care and health insurance coverage in Maine," Snowe added. "This legislation will provide much needed funding to help fill these gaps and maybe one day led to comparative costs."Key provisions of the "The Health Care Access and Rural Equity Act":Closing the Gap Between Urban and Rural "Standardized Payment" Levels ñ Inpatient hospital payments are calculated by multiplying several different factors, including a standardized payment amount. Under current law, hospitals located in cities with a population of more than 1 million receive a base payment amount 1.6 percent higher than those serving smaller populations. This measure would address this disparity by bringing the rural base payment up to the urban payment level. Maine would receive $82 million under this provision.Equalizing Medicare Share Payments -- Provision would eliminate payment caps placed on rural hospitals that serve a high proportion of uninsured patients, currently set at 5.25 percent. Maine would receive $32 million under this provision.Payment Increase for Low-Volume Hospitals ñ Because low-volume facilities have a higher cost per case, this legislation would increase the inpatient payments for the very smallest hospitals by 25 percent. The payment adjustments would decrease as the level of inpatient admissions rises, and phase out completely for facilities that discharge more than 2,000 patients per year. Approximately 500 rural facilities nationwide would be eligible for assistance. Maine would receive $13 million under this provision.Revising the Labor Share ñ Provision would reduce the labor share percentage, currently at 71 percent, to 62 percent, which would increase inpatient reimbursements for many rural hospitals. This "labor-related share" is determined by how much hospitalsí payments are directly or indirectly affected by labor costs. Under this provision, Maine would receive $20.5 million.Other Provisions:Access to Independent Lab Services ñ Independent labs would continue to receive reimbursement from Medicare, as opposed to hospitals.Capital Infrastructure Loans ñ $5 million loans would be available to help rural facilities improve infrastructure.Rural Hospital Flexibility Program ñ Provide $40 million for five years to assist hospitals to transition to Critical Access Hospital status, which allows them to qualify for greater reimbursements. This funding will help the hospitals to study the feasibility and financial impact of such a transition.Critical Access Hospital (CAH) ImprovementsAllow CAHs the flexibility to determine what portion of its 25 beds are acute care patient beds and what portion are swing beds;Eliminate 35 mile requirement placed on ambulance services;Extend reimbursements to nurses, physician assistants and clinical nurse specialists who are on-call for emergency care.###

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