Featured Health Business Daily Story, Dec. 3, 2010

Rural Health Makes Strides Under Reform, but Challenges Remain

Reprinted from AIS's HEALTH REFORM WEEK, designed to help savvy business leaders in health care understand what the enormous changes mean to them ... and what they can do about it.

November 8, 2010Volume 1Issue 21

A rural health lobbyist says that federal health reform is heading in the right direction: toward improving rural Americans’ access to insurance and care by working to strengthen small outlying hospitals and bolster the rural health work force and infrastructure. But lobbyists claim that several important rural-related provisions were omitted from the reform statute — on topics ranging from critical access hospitals’ needs to proper rural representation on national health panels — and they say they intend to continue fighting for these provisions in the next Congress.

“We set sail, but it’s a big ocean,” Maggie Elehwany, vice president of government affairs for the National Rural Health Association (NRHA), tells HRW. “We have said from the beginning: ‘We need greater coverage, but the bigger problem is just accessing care.’”

Spokesperson Patrick Riccards of the American Institutes for Research, a nonpartisan think tank in Washington, D.C., describes the reform law as “indeed a positive step forward for rural health needs.” But, he adds, “We don’t know what issues will be pursued in the new Congress.” Looking at national midterm election results, he asserts that some key leadership posts in the House will be filled by lawmakers “far more attuned” to rural health needs than is now the case. On the flip side, he worries that any repeal of the reform law could spell disaster for rural consumers and providers not faring well under the current health care system.

Rural Providers Push to End Gaps

The bottom line, according to NRHA, is that two steps must be taken to resolve what it describes as “an access to care crisis” in rural America: Health reform must end the work-force shortage in rural areas, and it also must eliminate longstanding payment inequities for rural providers.

Elehwany describes significant health needs in rural America, citing a proportionately greater number of uninsured and underinsured people there as compared with urban areas. “And rural Americans per capita are older, sicker and poorer,” she adds. “There’s such a great need.”

To address this need, billions of dollars have been invested in rural health care between the economic stimulus law (the American Recovery and Reinvestment Act of 2009, or ARRA) and the health reform law, Elehwany says. For example, she says, the reform statute contains incentives to expand the number of primary care physicians, nurses and physician assistants, including funding for scholarships and loan repayments for PCPs and nurses in medically underserved areas — roughly 70% of which are rural.

And in late August the Obama administration said it would expand a demonstration program increasing Medicare reimbursement for inpatient services at rural community hospitals. The program, which began as a five-year demonstration under the 2003 Medicare reform law, was expanded by the 2010 statute to add up to 20 more rural hospitals and to provide supplemental money to the 10 hospitals already participating. To qualify, hospitals of 50 beds or less must be located in one of the 20 states with the lowest population density, including Alaska, Iowa, Maine and Wyoming.

“Is it enough? Unfortunately, no,” Elehwany asserts. “There is great potential out there. You need to look at health care reform on top of ARRA and telemedicine. In fact, ARRA created a lot of anxiety among rural health providers because of the need to have electronic health records. What is scaring a lot of rural providers is they are unsure whether they have the financial capability and IT work force and up-front capital to do this.”

Overall, Elehwany says the reform statute contains significant improvements in payments, and some good work-force provisions. “There’s a lot of good intent, and good building blocks…but they need to be implemented well,” she says.

Exchanges Seen as Aiding Rural Areas

For example, she says the creation of health insurance exchanges for individuals and small businesses, set to begin in 2014 under reform, “may have great potential.” Because of lack of market penetration, rural Americans now may have only one or two health insurance options, she notes.

Elehwany says NRHA is now focused on details. “What we’re fighting for today is to make sure rural providers are taken care of…and we want fine-tuning in the next Congress,” she says. “We had a lot of amendments that didn’t make it into the reform bill.”

Specifically, she says NRHA wants to ensure that rural representation on the Medicare Payment Advisory Commission (MedPAC), and on the newly created boards and commissions resulting from the reform statute, is proportional — since 20% to 25% of Americans live in rural areas.

NRHA also wants to eliminate what it describes as unfair treatment of critical access hospitals — which provide 24-hour critical care at least 35 miles from the nearest hospital — found in the economic stimulus law. The group says ARRA didn’t provide the same financial incentives for health IT at critical access hospitals as for urban hospitals, and wants them to get priority funding as described in a Senate rural-health bill, S. 2838, introduced in December 2009.

Also in that bill is a provision allowing rural health clinics to participate in a program allowing certain safety-net facilities to purchase drugs at a discounted price. While the reform statute expands the list of eligible facilities, it did not include rural health clinics, which NRHA says provide critical access to underserved communities.

Contact Elehwany at (202) 639-0550 and Riccards at (202) 403-5000.

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