CAH Status Challenge Must Consider Access

John Commins, for HealthLeaders Media , August 21, 2013

If the OIG's recommendations are acted upon they could adversely affect about 1,000 of the 1,300 critical access hospitals in 45 states that gained an "NP" exemption, which includes Margaret Mary Health in Batesville, IN.


Tim Putnam, CEO at Margaret Mary

Tim Putnam, CEO at Margaret Mary and the president of the Indiana Rural Health Association, says his 25-bed hospital is already reeling from the 2% cuts in Medicare mandated by the sequestrations. Further stripping the hospital of its critical access status and the funding that goes with it " would be a significant cut in reimbursement which would cause us to carefully evaluate services " for the older, sicker, poorer patient base the hospital serves.

"For us, the program has been successful. It has allowed us to remain a vibrant healthcare system. We have always felt we have been financially responsible and frugal and this will be a significant impact," Putnam says.

Critical access hospitals are paid 101% of allowable costs, which sounds great on paper. But Putnam says "allowable" narrows when you read the fine print.

"Allowable costs eliminate all costs associated with legal fees, marketing, and things that are not provided for Medicare patients, " he says. " So the square footage in the gift shop has to be carved out of our cost report. Any portion of the cafeteria that is used to provide meals for family and guests that are not provided for patients has to be carved out. "

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