MHA's Center for Rural Health

Becoming a (Financially Stable) System

Before Watauga Medical Center merged with two other hospitals to form the Appalachian Regional Healthcare System, the 117-bed rural North Carolina facility had historically maintained a strong 5% operating margin and a comfortable amount of cash on hand.

But soon after, the system ended a year $10 million in the red with a bank’s noose tight around its neck and the collapsing credit markets pulling it tighter.

To thrive in its newly systemic configuration, ARHS would have to improve its internal operations and convince an increasingly skeptical external market of its rediscovered strength and stability. The efforts resulted in an investment-grade rating for the rural system and a more affordable new debt structure designed to be easily adaptable to future system needs.

Read more here.

Task force focuses on extending health IT to rural hospitals

The HHS Rural Health IT Task Force, composed of the Office of the National Coordinator for Health IT and the Health Resources and Services Administration, is working with the Department of Agriculture to give hospitals and providers in rural areas access to capital for deploying health IT systems. The Obama administration announced its commitment to the initiative last week.

Learn more here.

Rural Hospital Charges Due to Ambulatory Care Sensitive Conditions in the United States, by Insurance Type, 2000 to 2004

In this policy brief, the Rural Health Research & Policy Center report findings from a study that used nationwide hospital inpatient discharge data to examine the trends and regional variations of rural hospital charges due to ambulatory care sensitive conditions (ACSCs) in the United States, by insurance type, from 2000 to 2004. Hospital charges due to ACSCs are reported by region and payment source.

Changes in the percentage of hospital charges generated by ACSCs may indicate opportunities for cost savings through use of care management. The data presented in this policy brief indicate potential benefit from targeting resources designed to support ambulatory primary care.

Rural Recruitment at CAHs

The Department of Health and Human Services (HHS) will issue guidance to expand eligibility for the National Health Service Corps loan repayment program so that Critical Access Hospitals (those with 25 beds or fewer) can use these loans to recruit new physicians. This program will help more than 1,300 CAHs across the country recruit needed staff.

The addition of one primary care physician in a rural community generates approximately $1.5 million in annual revenue and creates 23 jobs annually. The average CAH creates 107 jobs and generates $4.8 million in payroll annually.

Read more here.

White House announces rural health initiatives

The Department of Health and Human Services will issue guidance to expand eligibility for the National Health Service Corps loan repayment program so that critical access hospitals can use the loans to recruit physicians, the White House announced Aug. 16. In addition, the administration said HHS and the Department of Agriculture will sign an agreement to link rural hospitals and clinicians to existing capital loan programs to purchase health information technology. The actions were announced as part of an initiative to grow the economy and create jobs in rural America, based on recommendations from the White House Rural Council.

Rural EDs Trail Urban Counterparts in Adopting E-Prescribing Systems

A new study finds that emergency departments in rural areas lag behind urban EDs in adopting electronic prescribing systems. Researchers say the meaningful use incentive program might help reduce the disparity between urban and rural EDs.

Read more here.

Rural representation on debt panel has its perils

On the same day that the first members of the powerful new congressional deficit-reduction committee were announced, one group of healthcare providers sought to influence the panel's composition. Read more from Modern Healthcare here.

CAH Meth2 Anesthesiologist Pay Fix

Physicians billing on type of bill 85X for professional services rendered in a Method II CAH have the option of reassigning their billing rights to the CAH. Currently payment is calculated for anesthesia services performed by an Anesthesiologist with a modifier of AA in a Method II CAH on a 20 percent reduction of the fee schedule amount before deductible and coinsurance are calculated.

CR7465 removes the 20 percent reduction that should not be applied in the payment calculation for these services. More info below.

Download CAH Meth2 Anesth Claim Fix

Download Aug 1 CR 7465 CAH Meth2 Anesth Pay Fix

Bill would extend mortgage insurance program to all CAHs through 2016

Sen. Herb Kohl (D-WI) last week introduced bipartisan legislation that would extend through July 2016 an exemption that allows all critical access hospitals to participate in the Federal Housing Administration’s Hospital Mortgage Insurance Program. Without the exemption, which expired July 31, many rural hospitals would not qualify for the low-cost loan insurance based on patients’ average length of stay, raising their financing costs for construction and renovation loans.

The American Hospital Association supports the bill. Since 2006, 10 rural hospitals in 10 states have received mortgage insurance through the program as a result of the exemption.

Rural hospitals partner with larger systems to survive

State budget cuts are expected to hit rural hospitals especially hard, as they already struggle with limited financial and workforce resources. To continue serving their oftentimes isolated communities, some rural hospitals are partnering with larger health systems nearby and across the country, giving them access to more resources and services, reports Kaiser Health News in conjunction with NPR.