Federal report says many hospitals wouldn’t keep critical-access designation if distance rules were strictly enforced

More than two dozen Kentucky communities still have hospitals because of the critical-access hospital program, in which small, isolated hospitals get higher Medicare and Medicaid reimbursements in return for limiting their size and services. Now federal officials appear to be considering a move that could cost the hospitals money and perhaps put them at risk of closing.

Most of the hospitals would not meet current location requirements if required to re-enroll to get reimbursements from Medicare, and the Centers for Medicare and Medicaid Services could realize substantial savings by revoking certification to some of these hospitals and reimbursing them at lower rates set by prospective payment systems and fee schedules
rather than at 101 percent of costs, according to a report by the Department of Health and Human Services.

The agency found that “the program costs the government and Medicare beneficiaries up to a
billion dollars a year more than the original parameters of the law
allowed,” Jenny Gold reports for Kaiser Health News. If forced to re-enroll, 849 of the 1,329 hospitals in the program would not meet the requirements — having 25 or fewer beds and being at least 35 miles away from another
facility (15 miles in mountainous terrain) in communities that would
otherwise have limited access to health services.

“Until 2006, states were allowed to waive the distance requirement and
designate small hospitals considered ‘necessary providers’ as critical
access hospitals as well, even if they were close to other facilities,” Gold reports. “The program grew quickly and now nearly one in four acute care hospitals
are getting the extra payments. Congress got rid of the loophole in
2006, but hospitals that already had the exemption were grandfathered.” (Read more)

Critical-access hospitals are located in Barbourville, Berea, Burkesville, Cadiz, Carlisle, Carrollton, Franklin, Greensburg, Hardinsburg, Hartford, Harrodsburg, Horse Cave, Irvine, Liberty, Martin, McDowell, Monticello, Morganfield, Owenton, Princeton, Russell Springs, Salem, Scottsville, Stanford, Versailles and Williamstown. For a detailed list, click here.