Bipartisan Policy Center Issues Report Entitled 'Impact of COVID-19 on the Rural Health Care Landscape: Challenges & Opportunities'
Here are excerpts:
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ACKNOWLEDGMENTS
BPC would like to thank state hospital associations from
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Table of Contents
6 ... E XECUTIVE SUMMARY
1 8 ... INTRODUCTION
21 ... RURAL HEALTH LANDSCAPE AND FINANCIAL OUTLOOK
28 ... POLICY RECOMMENDATIONS
28 ... Provide Immediate Stabilization for Rural Hospitals, RHCs, and FQHCs
34 ... Strengthen the Rural Emergency Hospital Model and Advance Other Rural Care Deliver y Transformations
59 ... Ensure an Adequate Rural Health Care Workforce
76 ... Secure Access to Virtual Care in
8 8 ... CONCLUSION
89 ... APPENDICES
94 ... ENDNOTES
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Executive Summary
Before the COVID-19 pandemic began, hospital closures were increasing in rural communities across the nation: 116 rural hospitals closed between 2010 and 2019./1
Over the past two years, federal relief has helped stabilize facilities, and the pace of closures slowed. However, this assistance was temporary, and rural hospitals continue to struggle financially and to recruit and retain nurses and other health care employees.
Against this backdrop, the
Today in rural America, roughly 1 out of every 3 individuals are enrolled in the Medicare program and nearly 1 in 4 individuals under age 65 rely on Medicaid as their primary source of health care coverage./2,/3
Although all payers should be part of the solution in ensuring access to quality rural health care, this report largely focuses on strengthening rural health care delivery in Medicare and Medicaid given the outsized role these public programs play in rural communities.
RURAL HEALTH LANDSCAPE AND FINANCIAL OUTLOOK
Health systems in rural communities face ongoing challenges that threaten their financial well-being. Although federal support during the pandemic temporarily helped many struggling facilities, financial challenges remain across rural health care systems. Notably, many rural stakeholders told BPC that once the federal public health emergency (PHE) ends and federal financial relief is no longer available, many of the rural hospitals that were struggling before the pandemic will once again be at risk of closure unless additional action is taken to shore up these facilities.
Among the hospital associations BPC interviewed, each indicated negative total operating margins over three consecutive years for at least some hospitals in their state, according to the most recently available cost report data. Hospitals experiencing persistent financial losses ranged from 6% in
An even greater share of hospitals experience losses on patient care alone, including half of
BPC assessed financial vulnerability across multiple domains and found that out of 2,176 rural hospitals, 441 face three or more concurrent financial risk factors, putting them at risk of service reduction or closure (see Figure 1)./5
Financial risk factors included: negative total operating margin, negative operating margin on patient services alone, negative current net assets, and negative total net assets.
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Figure 1: Financial stress affects a significant portion of rural hospitals, 2017-2020/6
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A
Stakeholders from
At the same time, over the past decade, most of the states had at least one converted hospital closure, where the facility closes its inpatient unit while continuing to provide other health care services, such as emergency, rehabilitation, or outpatient care./9
Approximately 83 hospitals have undergone a converted hospital closure nationally since 2005, compared with 98 hospitals that closed completely./10
These conversions reflect a trend that is in line with broader federal efforts to offer rural communities other care delivery and reimbursement models that shift the focus away from inpatient care to emergency and outpatient services. One example is the
IMPACT OF POTENTIAL
RURAL HOSPITAL CLOSURES
Rural hospital closures can significantly reduce access to health care services in the community, particularly in less densely populated places. According to a 2020 report by the
Closure of facilities also affects the availability of health care workers./12
A
PROPOSALS TO HELP IMMEDIATELY STABILIZE RURAL HEALTH SYSTEMS
BPC recommends several short-term policies aimed at immediately stabilizing and strengthening access to CAHs and other small rural hospitals and rural health clinic services. The proposals are designed to serve as a bridge as health care systems exit the pandemic and move toward longer-term reforms. Policy recommendations include:
* Providing rural hospitals full relief from across-the-board Medicare spending reductions, known as sequestration, until two years after the federal PHE ends.
* Taking rural facilities out of the ongoing "extender" and "needing to be renewed" budget cycle, including by permanently authorizing the
* Updating or rebasing
STRENGTHENING THE REHMODELAND ADVANCING OTHER RURAL DELIVERY TRANSFORMATION MODELS
BPC also recommends advancing and refining new rural care delivery models, including, most notably, the REH model that
BPC received extensive feedback from rural stakeholders, health system leaders, and rural policy experts about the areas of the REH model that hold promise and areas that require refinement or additional consideration. Not every community or hospital will benefit from the REH model, but improvements to this delivery option would likely result in a higher participation rate among communities and facilities. A primary area of concern for stakeholders is how to structure the new, additional facility payment. Although payments would be made available to REH participants to cover services and supports beyond the typical Medicare reimbursement structure, stakeholders worry that such payments may be set too low or be too restrictive to prove useful to REHs.
The report also highlights other rural health care delivery models that are undergoing testing in certain communities by the
PROPOSALS TO ENSURE AN ADEQUATE RURAL HEALTH CARE WORKFORCE
Addressing rural workforce challenges, which were significant even before the pandemic but have worsened over the past two years, is also a priority. Rural health care systems consistently report that retaining workers and ensuring adequate staffing levels is one of their most vexing challenges.
Key problems during the pandemic include staff burnout, the need of providers to leave the workforce to care for family members, and wage pressures that made it difficult for financially strapped rural hospitals to compete with other employers.
Recommendations in this report would extend the capacity of the existing health care workforce and improve the retention of providers in rural areas. Discussed later, BPC outlines several recommendations, including leveraging federal tax credits to encourage health care workers to remain in rural communities and improvements in the rules that allow practitioners trained outside of
PROPOSALS TO SECURE ACCESS TO VIRTUAL CARE IN
Finally, the report sets forth recommendations aimed at further advancing the use of virtual care in all communities, including rural and frontier areas, beyond the temporary federal PHE flexibilities.
During the COVID-19 public health emergency,
Stakeholders consistently reported that temporary telehealth flexibilities helped sustain access to clinical services during the public health crisis and will continue to be a valuable tool if certain flexibilities remain in place. This report includes a series of recommendations to build on this success to ensure that rural and frontier communities can continue to benefit from virtual care advancements.
Policy Recommendations
1. Provide Immediate Stabilization for Rural Hospitals,
Provide Immediate Stabilization for
*
*
* HHS should re-establish the CAH "necessary provider" designation process.
*
*
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Make Certain Rural Hospital Designations or Payment Adjustments Permanent
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*
*
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Ensure Continued Access to Care at RHCs
* HHS and
2. Strengthen the REH Model and Advance Other Rural Care Delivery Transformations (Page 34)
Ensure Adequate Funding Levels and Allow Flexible Use of Additional Facility Payments (AFP)
*
* HHS should provide REHs the flexibility to use new AFPs to offer extra medical and social support services, such as wellness and preventive care; mental health care; substance use disorder services; oral health services; end-stage renal disease care; and transportation, including for maternal care services and for food or housing assistance.
Consider Alternative Payment Pathways for REHs and Evaluate the REH Reimbursement Structure on an Ongoing Basis
*
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Determine the Role of Medicaid
* HHS should clarify whether REHs would be eligible to receive
* HHS should evaluate the role Medicaid reimbursement will play in the REH program.
Address the Need for Additional Capital Infrastructure Investments and Technical Assistance and Support
* To support REH transformation, HHS should ensure the hospitals are eligible for capital infrastructure funding that would enable them to update their facilities and ensure safe and high-quality care.
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Ensure Continued Access to Inpatient Hospital Care and Allow Communities to Maximize Local Infrastructure and Workforce
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* HHS should establish guidance on how REHs can transform back to another hospital model if the REH model is no longer financially viable or appropriate in the community.
* HHS should allow REHs to establish visiting provider programs to ensure adequate access to critical health care workers.
* HHS should permit co-location of services to increase patients' access to clinical and service offerings.
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Ensure Quality
* To increase accountability and improve care in rural communities,
*
* HHS should encourage communities to complete a community needs assessment--with full participation from stakeholders--to ensure that transformation to new delivery models will improve access to high-quality care in the local area and assist rural communities in taking the findings to develop a hospital transformation action plan.
Ensure Access to Ambulance Care, Virtual Care, and
* The secretary of HHS should allow REHs to tailor emergency medical transfer agreements to meet the local community's need.
* The secretary should clarify rules on ambulance reimbursement within the REH model, and ensure such reimbursement supports the transformation to the REH model and continued access to these critically important services.
* HHS should evaluate the REH reimbursement rate and structure to ensure REH providers can maintain strong virtual and telehealth service capabilities.
* HHS should ensure REHs are eligible to deliver all outpatient mental health and substance use services, as well as support additional service needs that surface during the community needs assessment.
* HHS should ensure funding is made available to REHs from HRSA programs, such as the Title V Maternal and Child Health
REH Alternatives
* The secretary of HHS should use lessons from current demonstrations to inform the establishment of additional multipayer, global budget initiatives that are tailored to rural communities and have the potential to improve care coordination and quality of care while reducing health care costs, where possible.
*
* The secretary should develop new models that promote increased coordination and integration of rural hospital and clinic services.
3. Ensure an Adequate Rural Health Care Workforce (Page 59)
Improve Utilization of the Currently Available Workforce
* To expand access to behavioral health services, CMS should consider permanently adding behavioral health provider types to the list of Medicare-covered providers (such as peer support specialists).
* To extend the existing workforce's capacity,
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Streamline Licensure Requirements
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Strengthen the Rural Workforce by Leveraging the Federal Tax System and the Immigration System
* To improve retention of the workforce,
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*
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Strengthen the
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Improve Reimbursement for Providers Practicing in Rural Areas and Reduce Administrative Burdens
* CMS should provide a nominal payment update for rural providers reporting data under the Quality Payment Program (QPP) and extend bonus payments for new Advanced Alternative Payment Model (APM) participants.
* CMS should exclude enrolled
* CMS should evaluate Merit-based Incentive Payment System (MIPS) data to ensure that rural providers are not disadvantaged by the program's structure.
* CMS should utilize readily available claims data to assess quality performance.
* CMS should decrease qualifying participation thresholds for rural providers operating under APMs, RHCs, and FQHCs.
4. Secure Access to Virtual Care in
Ensure Effective Broadband Implementation and Collection of Accurate Broadband Data
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Ensure New Modalities for Service Access Are Permanently Available in Areas Without Broadband
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* HHS should evaluate which services should remain available via audio-only to beneficiaries, especially for those without broadband access and for those with digital literacy or other technology-related barriers.
* HHS should expand asynchronous (store-and-forward) services beyond
Remove the
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Permanently Expand the List of Authorized Sites of Service and Remove Geographic and Site of Service Restrictions
* To ensure equitable access to services,
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Extend Telehealth Flexibilities for Two Years Post-PHE and Evaluate the Impact
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* HHS should develop a payment methodology for audio-only and non-facility-based telehealth services (for example, telehealth services accessed from a patient's home), specifying whether reimbursement for services would be appropriate at in-person payment rates.
* HHS should develop additional guidance for the billing of telehealth and audio-only services to ensure appropriate coding and improved data quality.
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Conclusion
Even before the COVID-19 pandemic began, rural communities struggled with hospital closures, an older and sicker population, difficulty recruiting and retaining health care providers, and a lack of broadband access.
COVID-19's surge over the past two years has disproportionately affected rural areas, not the least of which being that rural Americans are dying of COVID-19 at double the rates of their urban counterparts./229
The pandemic has also deepened workforce challenges for rural hospitals by stoking unprecedented rates of burnout among emergency and front-line staff. On the other hand, broad telehealth flexibilities afforded during the public health emergency made substantial inroads in the convenience, user experience, and utility of virtual care.
BPC's recommendations are evidence-based, viable solutions to the health care crisis in rural America. Recommendations are derived from dozens of interviews of rural stakeholders and build on the previous work of BPC's bipartisan 2020
The recommendations address fundamental and immediate problems in rural areas. These policies offer a necessary step forward to shore up rural hospitals and stem the loss of access to care. BPC's leaders thank
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Endnotes
1
2 Assistant Secretary for Planning and Evaluation, Access to Affordable Care in
3
4 BPC Analysis of CMS Provider of Services and Hospital Cost Report files, downloaded from:
5 Ibid.
6 Ibid. See also:
7 BPC staff discussion with
8 BPC staff discussion with
9
10 Ibid.
11
12 Ibid.
13 BPC staff discussion with
14
15
16
17
18
19 Ibid.
20
21
22
23
24 Informal BPC staff discussions with state hospital associations, June and
25
26 Ibid.
27
28 Public Law 98-121, Social Security Amendments of 1983. Available at: https://www.ssa. gov/OP_Home/comp2/F098-021.html.
29 Public Law 101-239, Omnibus Reconciliation Act of 1989, 1989. Available at: https:// www.congress.gov/101/statute/STATUTE-103/STATUTE-103-Pg2106.pdf.
30 Public Law 105 - 33, Balanced Budget Act of 1997, 1997. Available at: https://www. congress.gov/105/plaws/publ33/PLAW-105publ33.pdf.
31 Public Law 108-173, Medicare Prescription Drug, Improvement, and Modernization Act of 2003, 2003. Available at: https://www.congress.gov/108/plaws/publ173/PLAW108publ173.pdf.
32 42 CFR Sec. 412.96.
33 Rural Health Information Hub, "Rural Hospitals," 2022. Available at: https://www. ruralhealthinfo.org/topics/hospitals#designations.
34
35
36 MedPAC,
37 Ibid.
38
39 Ibid.
40
41 Ibid.
42
43 Capital Link, Rural FQHC Financial and Operational Performance Analysis 2017 - 2020, 2021. Available at: https://caplink.org/images/Rural_Financial_and_Operational_ Trends_Report_2017-2020.pdf.
44 Public Law 117-71, Protecting Medicare and American Farmers From Sequester Cuts Act, 2021. Available at: https://www.congress.gov/117/plaws/publ71/PLAW-117publ71. pdf.
45 BPC staff discussion with
46 Sec. 1923(d)(3) of the Social Security Act.
47 MACPAC, Chapter 5: Annual Analysis of Disproportionate Share Hospital Allotments to States,
48 MACPAC,
49 R.C. Lindroot, M.C. Perraillon, et al., "Understanding the Relationship Between Medicaid Expansions and Hospital Closures," Health Affairs, 37(1), 2018. Available at: https://www.healthaffairs.org/doi/10.1377/hlthaff.2017.0976.
50 MACPAC,
51
52 BPC staff discussion with
53 Assistant Secretary for Planning and Evaluation, Medicare Beneficiary Use of Telehealth Visits: Early Data from the Start of the COVID-19 Pandemic,
54
55 BPC Analysis of CMS Provider of Services and Hospital Cost Report files, downloaded from:
*Average Margins show the profitability of the hospital during the three most recent years for which cost reports are available. (In most cases, the averages are based on either 2018-2020 or 2017-2019 data.)
56 Ibid.
*The Patient Service Margin represents the profit or loss from revenues and costs associated with health care services delivered to patients.
57 The
58 BPC staff discussion with
59 BPC staff discussion with
60
61
62
63
64 Public Law 115-123, Bipartisan Budget Act of 2018, 2018. Available at: https://www. congress.gov/115/plaws/publ123/PLAW-115publ123.pdf.
65 CARES Act (P.L. 116-136) suspended Medicare sequestration from
66 Public Law 117-71, Protecting Medicare and American Farmers From Sequester Cuts Act, 2021. Available at: https://www.congress.gov/117/plaws/publ71/PLAW-117publ71. pdf.
67 MedPAC, Chapter 3: Hospital inpatient and outpatient services,
68 Public Law 108-173, Medicare Prescription Drug, Improvement, and Modernization Act of 2003, 2003. Available at: https://www.congress.gov/108/plaws/publ173/PLAW108publ173.pdf.
69 Congress.gov, H.R. 1639 - Rural Hospital Closure Relief Act of 2021, 2021. Available at: https://www.congress.gov/bill/117th-congress/house-bill/1639? q=%7B%22search%22%3A%5B%22the+critical+access+hospital+relief+act%2 2%2C%22the%22%2C%22critical%22%2C%22access%22%2C%22hospital%22-%2C%22relief%22%2C%22act%22%5D%7D&s=1&r=2.
70
71 Congress.gov, H.R. 5376 - Build Back Better Act, 2021. Available at: https://www. congress.gov/bill/117th-congress/house-bill/5376.
72
73 MedPAC,
74
75 Ibid.
76 Public Law 108-173, Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Sec. 411, 2003. Available at: https://www.congress.gov/108/plaws/publ173/ PLAW-108publ173.pdf.
77
78 Based on calculations of CMS cost report data by the
79 Public Law 116-260, Consolidated Appropriations Act, 2021, Sec. 130, 2020. Available at: https://www.congress.gov/116/plaws/publ260/PLAW-116publ260.pdf.
80 Public Law 105 - 33, Balanced Budget Act of 1997, 1997. Available at: https://www. congress.gov/105/plaws/publ33/PLAW-105publ33.pdf.
81 Public Law 116-260, Consolidated Appropriations Act, 2021, 2020. Available at: https:// www.congress.gov/116/plaws/publ260/PLAW-116publ260.pdf.
82 Rural Health Research Gateway, How Many Hospitals Might Convert to a
83 Ibid.
84
85 BPC staff conversation with North Carolina Rural Research Program, 6/21/21.
86 BPC staff conversations with North Carolina Rural Research Program,
87 Rural Health Research Gateway, Rural Ethnic/Racial Disparities: Adverse Health Outcomes,
88 Morbidity and Mortality Weekly Report,
89
90 MedPAC, Section 4: Dual-eligible beneficiaries,
91 MACPAC, Chapter 5: Annual Analysis of Disproportionate Share Hospital Allotments to States, 2021. Available at: https://www.macpac.gov/wp-content/uploads/2021/03/ Chapter-5-Annual-Analysis-of-Disproportionate-Share-Hospital-Allotments-to-States. pdf.
92 Title XIX of the Social Security Act, Sec. 1923(d)(3).
93 North Carolina Rural Research Program, The 21st
94 Congress.gov, S. 3105 - Hospital Revitalization Act of 2021, 2021. Available at: https:// www.congress.gov/bill/117th-congress/senate-bill/3105?q=%7B%22search%22%3A%5B %22hospital+revitalization+act%22%2C%22hospital%22%2C%22revitalization%22%2 C%22act%22%5D%7D&s=1&r=1.
95
96
97 Public Law, 117-103, Consolidated Appropriations Act, 2022, 2022. Available at: https:// www.congress.gov/bill/117th-congress/house-bill/2471/text?r=31&s=1.
98 Ibid, Sec. 753.
99 BPC staff discussion with
100
101
102 Rural Health Information Hub, "Rural Healthcare Quality," 2020. Available at: https:// www.ruralhealthinfo.org/topics/health-care-quality.
103 Rural Health Information Hub, "Critical Access Hospitals (CAHs)," 2021. Available at: https://www.ruralhealthinfo.org/topics/critical-access-hospitals#flex.
104
105 Ibid.
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123 BPC staff discussions with
124
125 Ibid.
126
127
128 Ibid.
129 Ibid.
130 Public Law 95-210, Rural Health Clinic Services Act of 1977, 1977. More information available at: https://www.govinfo.gov/content/pkg/STATUTE-91/pdf/STATUTE-91Pg1485.pdf#page=7
131
132
133 42 U.S.C Sec. 254b - Health Centers
134
135
136
137
138
139 Rural Health Information Hub, Rural Healthcare Workforce," 2020. Available at: https://www.ruralhealthinfo.org/topics/health-care-workforce.
140
141 Altarum, Health Sector Economic Indicators,
142
143 Ibid.
144
145 BPC staff discussion with the
146
147
148
149
150 BPC staff discussion with a
151 Public Law 117 - 105, Dr. Lorna Breen Health Care Provider Protection Act, 2022. Available at: https://www.congress.gov/117/plaws/publ105/PLAW-117publ105.pdf.
152
html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_content=newsletter&oly_enc_id=5523H7618490J9J. See also:
153
154
155 BPC staff discussion with
156 BPC staff discussion with a
157 BPC staff discussion with a rural
158
159 BPC staff discussion with a rural
160
161
162
163
164
165
166
167 Ibid.
168
169
170
171
172
173 Ibid.
174
175 Congress.gov, S. 2874 - Indian Health Service Health Professions Tax Fairness Act of 2021, 2021. Available at: https://www.congress.gov/bill/117th-congress/senatebill/2874/text.
176
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The report is posted at: https://bipartisanpolicy.org/wp-content/uploads/2022/04/BPC-Rural-Hospital-Report-4-22-22.pdf
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