Lawmakers push bill to help rural hospitals before key programs expire

Rural hospitals are facing tremendous financial pressures, and two House lawmakers are sponsoring a bill to give them some help at a critical time.

U.S. Reps. Carol Miller, a West Virginia Democrat, and Terri Sewell, an Alabama Democrat, have sponsored the Assistance for Rural Community Hospitals (ARCH) Act. The bill would extend Medicare programs designed to help smaller, rural hospitals for an additional five years.

The legislation comes as the clock is ticking. The funding for two key programs expires at the end of September.

"Rural hospitals are the foundation of West Virginia’s health care infrastructure," Miller said in a statement. "It is essential to the wellbeing of rural communities that these smaller health care access points have the resources and accommodations necessary to remain operable.”

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Medicare operates programs that rural hospitals have depended on to sustain their operations. The bill would extend the Medicare-dependent Hospital (MDH) program for five years. The program offers more assistance to smaller hospitals with a large share of Medicare patients. There are more than 170 hospitals with this designation.

In addition, the bill would also continue Medicare’s Low-Volume Hospital (LVH) designation for an additional five years. This program offers assistance to rural hospitals who have a relatively small portion of Medicare patients, which can occur in hospitals with small or isolated populations. Across the country, more than 600 hospitals receive aid from this funding line.

Both the Medicare-dependent Hospital program and the Low-Volume Hospital program are set to expire Sept. 30.

If both programs lapse, it would be a loss of $600 million in aid, the Center for Medicare and Medicaid Services has said.

The American Hospital Association has offered its support for the House bill and has fought to preserve the funding for both Medicare programs aiding rural hospitals. Lisa Kidder Hrobsky, the AHA’s senior vice president of advocacy and political affairs, wrote a letter of support to the House lawmakers.

“Your legislation will help keep the doors open at rural hospitals and allow them to continue serving their local communities during this time of sustained financial pressure and historic changes in care delivery,” Hrobsky wrote.

Rural hospitals have been getting more attention, as they face increasingly dire circumstances.

In April, U.S. Senators Bob Casey Jr., D-Pa., and Chuck Grassley, R-Iowa, introduced a bipartisan measure called the Rural Hospital Support Act (S. 4009). The Senate bill offered provisions to permanently extend the Medicare-dependent Hospital program and the Low-Volume Hospital designation.

President Biden’s administration has introduced plans for a new provider designation dubbed “Rural Emergency Hospitals.” CMS said it will enable rural hospitals to provide access to emergency services and outpatient services. Under the designation, rural emergency hospitals would be eligible to receive payments on or after Jan. 1, 2023.

Since 2010, 138 rural hospitals have closed, including what CMS has described as a record 19 hospital closures in 2020.

In announcing the Rural Hospital Designation, the Biden administration noted that those in rural areas have fewer healthcare providers, and rural residents typically have shorter lifespans. Only one in 10 doctors practice in rural areas, even though about 20% of all Americans live in rural communities.

Rural hospital closures have been more likely to hurt residents of minority groups, according to a study by the North Carolina Rural Health Research Program. Rural hospitals have been more likely to close in counties with above-average populations of Black, Hispanic and American Indian residents, compared to typical rural counties, the study found.

The COVID-19 pandemic has also made staffing more challenging in rural areas, although that has been a national problem, health leaders say. Still, some analysts say the added financial strain on rural hospitals in the pandemic could lead to more hospitals shutting their doors.

More than 500 rural hospitals are facing an immediate risk of closure due to economic difficulties, according to a report from the Center for Healthcare Quality and Payment Reform. In addition, 300 more rural hospitals are facing a high risk of closure because they have low financial reserves or because they rely heavily on government funds or other revenue beyond patient volume.

Nearly 900 rural hospitals – that’s about 40% of America’s rural hospitals – are facing a serious risk of closure, the group estimates.