Rural hospitals watch the federal budget cuts closely - KWWL - Eastern Iowa Breaking News, Weather, Closings

Rural hospitals watch the federal budget cuts closely

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Rural hospitals like Grundy County Memorial Hospital in Grundy Center are the latest point of attack by budget cutters on Capitol Hill.

Under the latest recommendations by the Office of Inspector General, 82 out of Iowa’s 118 hospitals would be reassessed and possibly lose their designation as Critical Access Hospitals (CAH).

The move could save millions of dollars a year, but it comes at a price for rural communities.

Medicare pays CAHs in a different way it would bigger hospitals like Allen Hospital in Waterloo. The change was made in 1997 after many rural hospitals in America were closing and Americans in those areas were losing their access to health care.

‘The Critical Access program is paying for access so that’s why they’re [Medicare is] paying more. They are paying for that access that was beginning to start deteriorating through the ’90s when these hospitals were beginning to shut down,” Allen Vice President of Strategy and Business Development Steve Slessor said.

“It doesn’t just impact when they have an emergency and need somewhere to go," he added. "It potentially impacts them receiving general care and what’s going to happen if they stay home when they should be getting preventative care?”

After 16 years, exemptions were put into place, and the program was put on the budget chopping block multiple times.

This month, the Department of Health and Human Services Office of Inspector General (OIG) released a study arguing that “nearly two-thirds of CAHs would not meet the location requirements if required to re-enroll.”

Grundy County Memorial Hospital is one of many examples of this. The facility is about 33 miles away from Allen Hospital in Waterloo, about 30 miles away from Covenant Medical Center in Waterloo and about 27 miles away from Sartori Hospital in Cedar Falls.

The distance alone could make Grundy County Memorial Hospital’s status as a CAH questionable because one of the qualifications is a distance requirement of 35 miles.

However, all of the secondary roads between Grundy County Memorial Hospital and these other hospitals are taken into account, which is why hospital officials in Grundy Center aren’t quite as worried.

But if the OIG’s recommendations are taken seriously, many hospitals could face deep cuts.

“If CMS (Centers for Medicare & Medicaid Services) had decertified all CAHs located 15 or fewer miles from nearest hospitals or other CAHs, Medicare could have saved an estimated $268 million in 2011,” the OIG report reads. “Additionally, if CMS had decertified half of all CAHs that would not meet the location requirements, Medicare could have saved approximately $860,000 per decertified CAH in 2011.”

Grundy County Memorial Hospital CEO Brian Kellar believes their hospital would still be exempt, but if the hospital lost this status, he says it would be “difficult to exist.”

He says it’s hard to put a dollar amount on the loss, but Grundy County, like many other Iowa hospitals, would have to re-evaluate what services it could provide, if any. He estimates the loss to be in the hundreds of thousands.

And his estimation is common. New Hampton’s Mercy Medical Center’s CEO Bruce Roesler and Guttenberg’s Municipal Hospital CEO Kim Gau both estimate the loss to be in the six digits. Gau says the CAH change could put their hospital budget in the red.

As a way to cut the federal budget, President Obama has proposed that all hospitals within a 10-mile radius of another hospital would lose their CAH status.

Sen. Tom Harkin (D) and Sen. Chuck Grassley (R) were two of 20 senators who signed a letter to the Senate Finance Committee objecting to the CAH change.

It’s bipartisanship area hospitals are glad to see.



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