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From Health Law Daily, February 3, 2015

Grassley & Schumer seek permanent funding for rural hospitals

By Kathryn S. Beard, J.D.

Senators Chuck Grassley (R-Iowa) and Chuck Schumer (D-NY) introduced legislation that would provide rural health providers with peace of mind by permanently extending the Medicare Dependent Hospital (MDH) and Low-Volume Hospital (LVH) programs. The bill, designated S. 332, is a bipartisan effort to prevent the yearly extensions that have funded the programs to date

Rural hospital programs. Sections 3125 and 10314 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) created a temporary change in the LVH and MDH payment policies. Under the MDH program, Medicare pays hospitals a special rate to address the fact that most of their patients are Medicare patients. A hospital qualifies for the MDH program if it is located in a rural area, has no more than 100 beds, is not classified as a Sole Community Hospital, and has at least 60 percent of inpatient days or discharges covered by Medicare. Under the LVH program, Medicare provides additional support to hospitals that provide critical services to the community but may not serve a high volume of patients. An LVH is a hospital that is more than 15 road miles from another comparable hospital and has fewer than 1,600 Medicare discharges a year.

The ACA’s temporary change was later extended through the first half of FY 2015, i.e., to March 31, 2015. Without action from Congress, funding for both programs will expire on April 1, 2015 (see Low-volume hospital and MDH adjustment implemented to fill six-month gap, June 17, 2014).

S. 332. To prevent the expiration of funding for the rural hospital programs, and to prevent the need for future extensions of funding, S. 332 would make the programs permanent. Schumer explained, “Strong rural hospitals are essential to quality care, and they are the lifeblood of rural communities. These hospitals serve a vital public need, employ several thousands of people, and they deserve our support in their continuous efforts to provide the highest level of care to residents. These two federal programs are a key lifeline for these hospitals, and it is time to extend them on a permanent basis. Rural hospitals need certainty that this critical funding stream will be available year after year, and this bill will do just that.” Grassley agreed, “These programs bring a lot of value for rural residents and taxpayers. Small, rural hospitals offer good quality health care at a cost that compares well with urban hospitals’ cost. Congress should extend the programs that help keep the doors open for rural Medicare beneficiaries.”

The bill has been referred to the Senate Committee on Finance.

MainStory: TopStory SenateNews RuralNews IPPSNews HealthCareReformNews CAHNews DSHNews CMSNews PartANews HealthReformNews

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