Cook County (Minn.) North Shore Hospital Administrator Kimber Wraalstad contends that most decision makers in Washington, D.C., don’t understand what it’s like for a critical access hospital (CAH) to provide care in a rurally isolated region of the country.Wraalstad

“Their definition of rural is significantly different than mine,” says Wraalstad. Her definition encompasses a county that, in total area, is the state’s second largest, but has only 5,200 residents.

Her hospital and an adjacent community health center in tiny Grand Marais (population 1,350) are the county’s health care safety net. The nearest hospital – also a CAH – is 70 miles away.

“People from Washington will look at Duluth and say, ‘boy that’s rural,’” Wraalstad says about the Minnesota lakefront city of 87,000 people. “I look at Duluth and I see urban metro.”

Wraalstad’s frustration with “Inside-the-Beltway” federal policymakers is shared by many CAH administrators. They say federal rules and policies – like the Centers for Medicare & Medicaid Services’ (CMS) 96-hour physician certification requirement as a condition for reimbursing CAHs for patient care, and direct physician or non-physician practitioner (NPP) supervision of outpatient therapeutic services – divert precious resources from patient care and drown hospitals in unnecessary paperwork.

Many will take that message to Washington when they attend the 2015 AHA Annual Membership Meeting, which takes place May 3-6. Getting relief from rules that threaten care in rural communities is a key part of the AHA’s advocacy agenda.

Congress created the CAH program in 1997, after a wave of rural hospital closures, to make sure Americans in isolated areas would still have access to health care. For that reason, hospitals designated as CAHs and with no more than 25 beds are reimbursed under Medicare based on their actual costs to provide care, rather than through a prospective payment system.

While CAHs are supposed to be at least 35 miles away from another hospital in rural areas, states were allowed to waive distance requirements and designate small hospitals as “necessary providers” if it was felt that they were offering services that would not be available in the area otherwise. When that provision of the law was eliminated in 2006, hospitals that had already been granted an exemption were allowed to remain in the program. There are roughly 1,300 CAHs in rural areas across the country. 

Next week, CAH leaders will urge legislators and staff to work for passage of the Critical Access Hospital Relief Act, H.R.169/S. 258, which would remove the 96-hour physician certification requirement as a condition of payment; and the Protecting Access to Rural Therapy Services Act or PARTS, H.R. 1611/S. 257, which would adopt a default standard of “general supervision” for outpatient therapeutic services.

The regulatory burden, coupled with Medicare’s 2% annual spending cut under the 2011 Budget Control Act, are pushing essential CAHs to the brink, says Blaine Miller, administrator of Republic County Hospital, a CAH in Belleville, Kan. His hospital has made all the cuts in staffing it can make in the wave of previous cuts in federal payments. Now, the hospital is considering closing a 38-bed long-term care facility. The hospital lost $900,000 in 2014 for the third consecutive year.Miller

“Regulations like direct supervision and the 96-hour physician requirement are not reasonable,” he says. “We will have more hospitals close. Our elderly people will have to drive farther for health care. In emergency cases, there may be people who die in route to the nearest health care facility.” He asks: “Why is Washington trying to denude rural America of health care?”

Direct supervision requires a supervising physician or NPP to be immediately available whenever a Medicare patient receives outpatient therapeutic services. CMS in 2009 characterized the direct supervision requirement as a “restatement and clarification” of existing outpatient payment policy that had been in place since 2001 – a move that put hospitals at increased risk for unwarranted enforcement actions.

The AHA and CAH administrators like Wraalstad and Miller say the policy essentially requires the round-the-clock presence of physicians and NPPs. Many say they can neither find nor afford the medical staff to meet that requirement.

“Direct supervision makes it more difficult for us to provide the type of care and services our community expects,” Wraalstad says. “This has never been an issue about patients not receiving quality care. It’s about rules that add costs and make it more difficult to keep services in the community.” 

In addition to a default setting of general supervision, the PARTS legislation would create an advisory panel to establish an exceptions process for risky and complex outpatient services. The legislation also would create a special rule for CAHs that recognizes their unique size and Medicare conditions of participation; and would hold hospitals and CAHs harmless from civil or criminal action for failing to meet the direct supervision requirements applied to services provided since 2001.

Wraalstad notes that she recently met with Sen. Al Franken, D-Minn., who visited Cook County’s community health center, and thanked him for his co-sponsorship of PARTS. “I said I appreciate your support,” she recalls. “Now let’s get it done.”

The 96-hour physician certification issue also irks CAHs. Medicare requires physicians to certify that patients admitted to a CAH will be discharged or transferred to another hospital within 96 hours in order for the CAH to receive payment under Medicare Part A. CMS has not historically enforced the requirement. But CMS last year, in guidance related to its “two-midnight” admissions policy, signaled its intent to do so through audits and recoupments – a situation that would threaten patients’ access to longer care when needed.

“At the 97th hour we don’t have any place to send these people,” says Paul Bengston, CEO of Northeastern Vermont Regional Hospital in St. Johnsbury. He says the nearest large hospital, Dartmouth Hitchcock Medical Center in Lebanon, N.H., is 60 miles to the south and “chock the block full all the time.”Bengston

He calls the physician certification requirement an example of the “long-term debilitating policy that deteriorates access to service and the quality of the patient’s experience.” Bengston was the 2014 chairman of the AHA Section for Small or Rural Hospitals Constituency Section’s governing council.

Tim Putnam, president and CEO of Margaret Mary Health, a CAH in Batesville, Ind., asks why it is necessary to transfer a patient to a hospital 90 miles from home when the community hospital can provide the necessary care just as well.

“Those are the things that make a critical access hospital administrator scratch his head,” he says. “I’ve got the capability to provide that care. We have good outcomes. I have surgeons that are well trained, and now the 96-hour rule inhibits me from providing that type of care for patients.”

Other policies under consideration in Washington could further squeeze CAHs. Some policymakers have proposed cutting the enhanced Medicare payments to CAHs. Others have suggested that CAHs within 35 miles of another hospital have their designations re-evaluated and receive reimbursements like other Medicare-certified hospitals.

According to the North Carolina Research Program, 50 rural hospitals, including 15 CAHs, have closed since 2010.

“Sometimes it seems like death by a 1,000 cuts,” says Republic County Hospital’s Miller. “If a critical access hospital closes, what happens to the physicians and what happens to access to primary and emergency care in that rural community?”

Northeastern Vermont Regional Hospital’s Bengston says “regulatory burdens are getting in the way of the big picture in health care” – higher quality care, healthier people, lower costs. “A lot can be done in rural communities, but we need more creative policies than what we have in place now.” Putnam