Bill Would Provide Greater Certainty for Small, Rural Hospitals
Washington, D.C. – Today, Colorado U.S. Senator Michael Bennet and U.S. Senators Lisa Murkowski (R-Alaska) and Dan Sullivan (R-Alaska) introduced legislation to extend the Rural Community Hospital Demonstration Program for an additional five years, ensuring these essential hospitals do not face further budget instability during such challenging times.
The Rural Community Hospital Demonstration Program began in 2004 as a five-year demonstration project, and was extended in 2009 and again in 2016. The Medicare program, which reimburses inpatient hospital services under a cost-based methodology in small, rural communities that are too large to be designated as Critical Access Hospitals, has a rolling participation period. Without action from Congress, the program will expire for all participating hospitals between 2020 and 2021, including five hospitals in Colorado. A number of hospitals are set to fall out of the program beginning as early as this summer, during a particularly difficult time for hospitals.
“Rural America can’t exist without rural hospitals – and rural hospitals have been ringing the alarm since well before this crisis. And now, their challenges are only magnified as they’ve been left trying to manage this unprecedented crisis,” said Bennet. “The CMS Rural Community Hospital Demonstration program has been critical in five rural communities in Colorado alone that would not have been able to provide services without the program funds. Extending and expanding this demo program is a commonsense solution to provide stability in communities that only recently recovered from the Great Recession. We must continue to fight for these hospitals to ensure they receive the support and resources they need to continue to serve Americans living in rural communities.”
“Overcoming the challenges of providing healthcare in Alaska—particularly our small, rural communities—is no easy task. Adding to the existing challenges of providing access to quality, affordable care—hospitals will be falling out of this program as they deal with the COVID-19 crisis and are already managing unstable financial footing. This legislation will create stability in reimbursement structures and allow hospitals to remain in the program until the participation periods for all hospitals end,” said Murkowski. “As we continue our efforts to keep Alaskans safe and healthy, we must do all we can to provide certainty for our hospitals and healthcare facilities.”
“Alaska has many incredible, state-of-the-art hospitals tasked with caring for people in some of the most remote and geographically-diverse corners of the country,” said Sullivan. “The Rural Community Health Demonstration program offers crucial support to these institutions, especially as they work to meet the challenges caused by the coronavirus pandemic. I’m glad to join Senator Murkowski in helping to bolster our rural hospitals and ensure they are equipped to provide for those in the community.”
“Even pre-COVID crisis, smaller Rural PPS Hospitals were at risk and now, we particularly are. Annually, of the costs allowed by the Centers for Medicare & Medicaid Services, Montrose Memorial Hospital, an independent hospital with no tax district support, loses over $58 million caring for Medicare patients and $12-$13 million on Medicaid patients below the cost of care – a loss of over $70 million. If the Rural Demonstration Project could be extended, MMH would be more likely to survive over time to provide care for our rural communities, ranchers, and farmers that feed the world,” said James Kiser, CEO of Montrose Memorial Hospital in Colorado.
“The American Hospital Association is pleased to support Senators Murkowski, Bennet and Sullivan's Rural Community Hospital Demonstration Extension Act of 2020,” said American Hospital Association Executive Vice President Tom Nickels. “Rural hospitals are the cornerstones of their communities, providing access to care for patients close to home and supporting the local economy. By extending the demonstration for five more years, the legislation will ensure that the Rural Community Hospital program continues to help maintain access to care for patients by allowing hospitals to expand and improve the services their communities need.”
Bennet has previously called on the Department of Health and Human Services and the Small Business Administration to provide access to funding for rural hospitals and health care providers. In March, he introduced legislation with U.S. Senator John Barrasso (R-Wyo.) to address the crisis facing the rural health care system during the Coronavirus Disease 2019 (COVID-19) emergency.