In addition, the letter warns that "hundreds more rural facilities will be severely harmed due to the October 1 expiration of the rural current 'low-volume' adjustment" for rural hospitals that incur higher incremental Medicare costs due to a low-volume of Medicare patients.
"When Congress shifted to the prospective payment system years ago, hundreds of rural hospitals closed. The system did not work for them," Elehwany says. "Congress intervened because rural patients were losing critical access points for healthcare. They created special hospital designations and they worked."
Elehwany says it's important to remember that senior populations in rural areas are quite vulnerable. "They are poor and have a higher percentage of chronic diseases than their urban counterparts and they are overall a sicker population," she says. "So these hospitals are treating these vulnerable individuals and no facility makes money on Medicare reimbursements. It's not like Costco where you can make up for it because you have this huge volume of other patients you are treating."
Elehwany believes that MedPAC's analysis is shortsighted and incomplete.
"When MedPAC says these rural payments aren't specifically targeted, or some are doing better than urban hospitals they don't do the math and take the next step and figure out what would happen to these small rural hospitals if they lost these payments," she says. "We believe these hospitals will be forced to limit services and cut staff and some will have to close their door."