Legislative Priorities

The American Hospital Association (AHA) is working diligently on several legislative and regulatory fronts to support operational improvements and program enhancements for critical access hospitals (CAHs). 

KEY ISSUE AREAS

The Health Care Access and Rural Equity Act (H-CARE) (H.R. 2860) would extend through 2011 existing critical rural health provisions of the Medicare Modernization (MMA) and Deficit Reduction Acts (DRA). Introduced by Reps. Earl Pomeroy (D-ND) and Greg Walden (R-OR), H.R. 2860 would extend the outpatient hold-harmless provision for rural hospitals with fewer than 100 beds and reauthorizes for sole community hospitals, the 2% add-on for ambulance trips in rural areas and the 5% add-on for rural home health services. It also would extend Section 508 of the MMA to allow certain Medicare wage index reclassifications to proceed in a non-budget neutral way, and hospitals near a Section 508 hospital to participate in a group reclassification. CAHs would gain flexibility to respond to daily and seasonal fluctuations in patient load and cost-based reimbursement for outpatient lab services. The bill also would remove the cap on disproportionate-share adjustment percentages for all hospitals, rebase sole community hospital payments, provide grants for health information technology, and expand the 340B drug discount program.

The Craig Thomas Rural Hospital and Provider Equity Act (R-HoPE) (S.1605) would extend the outpatient hold-harmless provision for rural hospitals under 100 beds and sole community hospitals, continue the grandfather clause allowing direct payments to independent laboratories for the technical component of pathology services, and extend the 5% rural add-on payment for home health services.  In addition, the bill would provide cost-based reimbursement for CAHs' outpatient lab services regardless of where the patient is physically located, remove the cap on disproportionate share adjustment percentages for all hospitals and improve payments for ambulance services in rural areas.  The bill was introduced by Sens. Kent Conrad (D-ND) and Pat Roberts (R-KS).

The Critical Access Hospital Flexibility Act (S. 1595) gives CAHs needed flexibility and allows the hospitals to meet either the current census limit of 25 beds per day, or a limit of 20 beds per day averaged over a cost reporting period.  The bill was introduced by Sens. Gordon Smith (R-OR) and Ron Wyden (D-OR).

Critical Access to Clinical Lab Services Act (S. 1277) would work to restore cost-based
reimbursement of referral lab services.  In 2003 CMS revised its lab payment policy specifying that CAHs could no longer be reimbursed at-cost for lab services, unless patients are physically present in the hospital lab when specimens are collected. Many CAHs continue to provide lab services at community health centers, skilled nursing facilities and in patients' homes. They are increasingly concerned about the costs of offering off-site lab testing.  The bill was introduced by Sen. Ben Nelson (D-NE).

The 340B Program Improvement and Integrity Act (H.R. 2606) would allow CAHs, sole community hospitals, rural referral centers and Medicare-dependent hospitals to access 340B discounts for inpatient and outpatient drugs.  The bill also would extend the discount to inpatient drugs for current eligible 340B hospitals.  H.R. 2606's sponsors include Reps. Bobby Rush (D-IL), Bart Stupak (D-MI) and Jo Ann Emerson (R-MO).

Rural Health Services Preservation Act (S.630/H.R. 2159) would ensure CAHs receive at least 101% of costs for inpatient, swing-bed and outpatient hospital services and rural health clinics receive the applicable all-inclusive rate for services provided to Medicare Advantage patients.  The bill's sponsors are Sens. Norm Coleman (R-MN), Tom Harkin (D-IA) and Richard Durbin (D-IL) and Reps. Ron Kind (D-WI) and Cathy McMorris-Rodgers (R-WA).