"These hospitals are costly for Medicare and beneficiaries, but we have to balance cost concerns with hospital access for rural beneficiaries," Jordan said on the podcast. "With that balance in mind, we recommend that CMS create alternative location related requirements for critical access hospitals that don't meet the distance or rural requirements. For example, CMS could allow critical access hospitals to keep their designations—if they serve communities with high poverty rates."
Morgan says the nation's hospitals are already reeling from the effects of the 2% sequestration cuts and that removing the critical access designation, which theoretically allows hospitals to collect 101% of Medicare costs, "effectively closes them."
"The first thing we are going to hear argued back at us is that OIG isn't recommending that they shut the doors, but they are," Morgan says. "When they're talking about removing that designation from facilities where a large percentage of them are operating in the red already, that will effectively close them. So it's not an honest argument saying that 'we are not recommending closing 800 rural hospitals.'"