The Senate Finance Committee June 24 approved three AHA-backed bills to support access to hospital services in rural communities and to emergency psychiatric care for underserved and vulnerable populations.

S. 1461 would delay through December enforcement of direct supervision requirements for outpatient therapeutic services provided in critical access hospitals (CAH) and certain small, rural hospitals.

S. 607 would extend for five years the Rural Community Hospital Demonstration Program, which enables rural hospitals with 50 or fewer acute-care beds to test the feasibility of cost-based reimbursement. The bill would extend the demonstration only for those hospitals participating in the program as of Dec. 30, 2014, and require the Secretary of Health and Human Services (HHS) to report to Congress on the effectiveness of the program by Aug. 1, 2018.

The third bill, S. 599, would extend the Medicaid Emergency Psychiatric Demonstration Program through September 2016 or whenever HHS completes its final evaluation of the project, whichever occurs first, as long as the extension would not increase Medicaid costs. It also would allow HHS to extend the demonstration project, set to expire this year, for an additional three years and to other states, subject to the same budget-neutrality standard. 

The bills now await consideration by the full Senate and House.


S. 1461 puts temporary hold on direct supervision.  The controversial direct supervision policy requires a supervising physician or non-physician practitioner (NPP) to be immediately available whenever a Medicare patient receives outpatient therapeutic services like, for example, drug infusions and injections, blood transfusions and chemotherapy.

CAH and other small rural hospital administrators argue that the agency’s direct supervision requirement essentially requires the round-the-clock presence of physicians and non-physician practitioners. Many say they can neither find nor afford the medical staff to meet that requirement.

They contend that CMS should allow them to perform these types of outpatient therapeutic services under general supervision, which allows the service to be done under the overall direction of a physician or an appropriate NPP without requiring their presence.

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.

If approved by the House, the stop-gap moratorium would give Congress more time to enact legislation such as the AHA-supported Protecting Access to Rural Therapy Services Act, S. 257/H.R. 1611. The legislation would require CMS to allow a default setting of general supervision, rather than direct supervision, for outpatient therapy services and create an advisory panel to establish an exceptions process for risky and complex outpatient services.


Hill briefing on rural health care needs. The Senate committee’s action on the rural health care bills came a week after the AHA participated in a bipartisan Capitol Hill briefing hosted by the Senate Rural Caucus, chaired by Sens. Pat Roberts ,R-Kan., and Al Franken, D-Minn.,) to educate congressional staff on the unique circumstances and needs impacting health care delivery in rural communities.

The AHA highlighted the importance of continuing vital rural programs, such as the Medicare-dependent hospital and enhanced low-volume adjustment programs; and passing key rural legislation such as the Rural Community Hospital Demonstration program. Other participants in the briefing included the Health Resources and Services Administration’s Office of Rural Health Policy and the National Association of Rural Health Clinics.


Rural emergency acute care. In other rural health care developments, Sen. Charles Grassley, R-Iowa, on June 23 introduced the Rural Emergency Acute Care Hospital Act. The legislation would allow CAHs and prospective payment system hospitals with 50 or fewer beds to convert to Rural Emergency Hospitals (REH).

REHs would provide emergency and outpatient services, but not inpatient care. They would receive enhanced reimbursement rates of 110% of reasonable costs to transport patients to acute-care hospitals in neighboring communities.

In a letter to the senator, AHA Executive Vice President Rick Pollack called the legislation “a good first step toward ensuring access to health care services in some rural communities,” and said the AHA looks “forward to working with you to further develop this and other alternative payment models to ensure the continued access to health care services in rural communities.”