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A Look at Rural Hospital Closures and Implications for Access to Care: Three Case Studies

Issue Brief
  1. Brystana G. Kaufman, Sharita R. Thomas, Randy K. Randolph, Julie R. Perry, Kristie W. Thompson, George M. Holmes, and George H. Pink, “The Rising Rate of Rural Hospital Closures,” Journal of Rural Health. 32, no. 1 (2016): 35-43, http://onlinelibrary.wiley.com/doi/10.1111/jrh.12128/epdf;  Kristin L. Reiter, Marissa Noles and George H. Pink, “Uncompensated Care Burden May Mean Financial Vulnerability for Rural Hospitals in States that Did Not Expand Medicaid. Health Affairs  vol. 34, no. 10 (2015): 1721-1729, doi: 10.1377/hlthaff.2014.1340. http://content.healthaffairs.org/content/34/10/1721.abstract; Sharita Thomas, Mark Holmes, George Pink.  2012-2014 Profitability of Urban and Rural Hospitals by Medicare Payment Classification. (NC Rural Health Research Program, March 2016).  http://www.shepscenter.unc.edu/product/2012-14-profitability-of-urban-and-rural-hospitals-by-medicare-payment-classification/

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  2. For a current list of state Medicaid expansion decisions, see http://kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act/

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  3. Kaufman, Thomas, Randy K. Randolph, Julie R. Perry, Kristie W. Thompson, George M. Holmes, and George H. Pink, “The Rising Rate of Rural Hospital Closures,” Journal of Rural Health. 32, no. 1 (2016): 35-43, http://onlinelibrary.wiley.com/doi/10.1111/jrh.12128/epdf; Mark Holmes and George H. Pink, Change in Profitability and Financial Distress of Critical Access Hospitals from Loss of Cost-Based Reimbursement. (NC Rural Health Research Program, December 2013),  http://www.shepscenter.unc.edu/wp-content/uploads/2013/12/Change-in-Profitability-and-Financial-Distress-of-CAHs-November-2013.pdf. For a history of the Medicare prospective payment system, see Centers for Medicare & Medicaid Services, Office of Inspector General, Office of Evaluation and Inspections, Region IX, “Medicare Hospital Prospective Payment System, How DRG Rates Are Calculated and Updated” (August 2001). http://oig.hhs.gov/oei/reports/oei-09-00-00200.pdf

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  4. The Flex Program was initially authorized by the Balanced Budget Act of 1997. For more information on the Flex Program, see https://www.ruralcenter.org/tasc/flex-program-fundamentals

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  5. The Medicare Payment Advisory Commission, Critical Access Hospitals Payment System. (Washington DC: October 2014). http://www.medpac.gov/documents/payment-basics/critical-access-hospitals-payment-system-14.pdf

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  6. Victoria Freeman, Kristie Thompson, H. Ann Howard, Randy Randolph, and G. Mark Holmes. The 21st Century Rural Hospital Chart Book, March 2015.  (Rural Health Research and Policy Center, March 2015). http://www.shepscenter.unc.edu/wp-content/uploads/2015/02/21stCenturyRuralHospitalsChartBook.pdf

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  7. Ibid. Rural Referral Centers (RRCs) may also be classified as Medicare Dependent Hospitals (MDHs) or Sole Community Hospitals (SCHs). The percentages given for MDHs and SCHs refer to hospitals that have only those designations and are not also RRCs. As explained by Freeman, Thompson, et al., “[t]hese payment programs [CAHs, MDHs, SCHs and RRCs] recognize the challenges of providing care in rural settings and provide enhanced or supplemental reimbursement. Qualifications for these programs are complex and may include locations, hospital size, staffing, network agreements, patient demographics including insurance, and patient referral patterns.”

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  8. The Medicare Payment Advisory Commission, Critical Access Hospitals Payment System. (Washington DC: October 2014). http://www.medpac.gov/documents/payment-basics/critical-access-hospitals-payment-system-14.pdf

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  9. Ibid.

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  10. The North Carolina Rural Health Research Program defines a rural hospital as “any short-term, general acute, non-federal hospital” that is either: (a) not located in a metropolitan county; (b) located in a Rural-Urban Commuting Area Code (RUCA) type 4 or higher; or (c) a Critical Access Hospital. For a list of the hospitals and more information about the project, see http://www.shepscenter.unc.edu/programs-projects/rural-health/rural-hospital-closures/

     

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  11. Robert Bradfield. Parkway Regional Hospital ending in-patient and ER services. (Paducah, Kentucky, WPSD Local 6 News, December 10, 2014). http://www.wpsdlocal6.com/story/27598425/parkway-regional-hospital-ending-in-patient-and-er-services; West Kentucky Star Staff. Fulton Hospital Closing ER, Inpatient Service. (The West Kentucky Star, December 12, 2014). http://www.westkentuckystar.com/News/Local-Regional/Western-Kentucky/Fulton-Hospital-Closing-ER-Inpatient-Service.aspx; Amanda Roberts. Last day open for Parkway Regional Hospital. (Paducah, Kentucky, WPSD Local 6 News, March 31, 2015). http://www.wpsdlocal6.com/story/28676177/last-day-open-for-parkway-regional-hospital; Rob Canning. Hospital Closure Will Have ‘Domino Effect’ on Fulton Economy” (WKMS, Murray State’s NPR Station, December 12, 2014). http://wkms.org/post/hospital-closure-will-have-domino-effect-fulton-economy#stream/0

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  12. Alan Bavley and Dave Helling. Closing of Kansas hospital adds to Medicaid expansion debate. (Kansas City, Kansas, The Kansas City Star, October 17, 2015). http://www.kansascity.com/news/business/health-care/article39620442.html#storylink=cpy; U.S. News and World Report. Mercy Hospital Independence, Independence KS. http://health.usnews.com/best-hospitals/area/ks/mercy-hospital-independence-6670440. More information on the Mercy Health system available at: https://www.mercy.net/

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  13. Rod Overton. Marlboro Park Hospital in Bennettsville to close, officials say. (WBTW News13, April 22, 2015). http://wbtw.com/2015/04/22/marlboro-park-hospital-in-bennettsville-to-close-officials-say/ South Carolina Health Data, Statistics and Insights in SC Health Care. (2013). http://schealthdata.org/list; McLeod Health Cheraw, History. http://www.mcleodhealth.org/cheraw/mcleod-health-cheraw-history.html

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  14. The American Hospital Association (AHA) prepared a summary of Medicare policies unrelated to the ACA that have resulted in lower payments to hospitals since 2010. Helen Adamopoulos. AHA: Hospital Medicare, Medicaid Payments Cut by $113B Since 2010. (Becker’s Hospital Review, January 15, 2014). http://www.beckershospitalreview.com/finance/aha-hospital-medicare-medicaid-payments-cut-by-113b-since-2010.html. AHA’s chart can be found at http://www.aha.org/content/16/acahospitalcuts.pdf

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  15. Information about the Readmission Reduction Program can be found at https://www.cms.gov/medicare/medicare-fee-for-service-payment/acuteinpatientpps/readmissions-reduction-program.html

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  16. Melissa Patrick. Bill would require Medicaid managed-care firms to pay contracted fees for ER visits; Senate hearing targets two companies. (Kentucky Health News, February 27, 2015). http://kyhealthnews.blogspot.com/2015/02/bill-would-require-medicaid-managed.html

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  17. Sharita Thomas, Mark Holmes, George Pink. 2012-2014 Profitability of Urban and Rural Hospitals by Medicare Payment Classification. (NC Rural Health Research Program, March 2016). http://www.shepscenter.unc.edu/product/2012-14-profitability-of-urban-and-rural-hospitals-by-medicare-payment-classification/

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  18. While our interviews did not address what type of mental health and substance use incidents led people to the emergency departments of these hospitals, rural communities are facing significant challenges with the current opioid epidemic. See Toliver, Z. The Opioid Epidemic: Testing the Limits of Rural Healthcare. (The Rural Monitor, Rural Health Information Hub, May 18, 2016). https://www.ruralhealthinfo.org/rural-monitor/opioid-epidemic/

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  19. All three of our case studies involved hospitals that were located close to a state border. The ability of Medicaid patients to access care across state lines may depend on state rules and Medicaid managed care contracts and networks even if a provider in another state is the closest provider.

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  20. Others have used this concept to describe the current status of many rural hospitals. See, e.g., Lemming M, Wyland M. February 23, 2016. Death by a Thousand Cuts: The Flickering Lights of the U.S. Rural Hospital. Boston, Massachusetts: The Nonprofit Quarterly https://nonprofitquarterly.org/2016/02/23/death-by-a-thousand-cuts-the-flickering-lights-of-the-u-s-rural-hospital/

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  21. Kristie Thompson, Kristen Reiter, Rebecca Whitaker, Sharita Thomas. Does ACA Insurance Coverage Expansion Improve the Financial Performance of Rural Hospitals?  (NC Rural Health Research Program, April 2016).  http://www.shepscenter.unc.edu/product/aca-insurance-coverage-expansion-improve-financial-performance-rural-hospitals-2/

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  22. Several of these demonstrations are described at https://www.ruralhealthinfo.org/new-approaches

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  23. Kansas Hospital Association Rural Health Visioning Technical Advisory Group. March 2015. Sustaining Rural Health Care in Kansas, The Development of Alternative Models. Topeka, Kansas: Kansas Hospital Association. http://www.healthforum-edu.com/rural/PDF/2016/BendbutDontBreakFlexibleDeliveryModelsforRuralCommunities2.pdf; Susan Morse, Kansas plan would convert many rural hospitals into primary health clinics. (Healthcare Finance, August 18, 2015). http://www.healthcarefinancenews.com/news/kansas-plan-would-convert-many-rural-hospitals-primary-health-clinics

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  24. The Oregon Health Authority oversees the state’s Rural Health Reform Initiative. Information about the plan is available at  http://www.oregon.gov/oha/pages/rhri.aspx

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  25. Ron Shinkman. MedPAC suggests alternative models for rural hospitals. (Fierce Healthcare, October 15, 2015). http://www.fiercehealthcare.com/finance/medpac-suggests-alternative-models-for-rural-hospitals More information on MedPAC’s proposals is available at: http://www.medpac.gov/documents/october-2015-meeting-presentation-models-for-preserving-access-to-emergency-care-in-rural-areas-.pdf?sfvrsn=0

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  26. Rural Emergency Acute Care Hospital Act. S. 1648. 114th Congress. (2015). https://www.congress.gov/bill/114th-congress/senate-bill/1648

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  27. Save Rural Hospitals Act. H.R. 3225, 114th Congress. (2015).  https://www.congress.gov/bill/114th-congress/house-bill/3225/text

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Appendix
  1. Lauren Sausser. Two rural Pee Dee hospitals may close in May.(The Post and Courier, January 10, 2015). http://www.postandcourier.com/article/20150110/PC16/150119974

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  2. Staff report. Fulton patients to get care at local clinic. (The Paducah Sun, December 19, 2014). http://www.paducahsun.com/news/local/121914_PS_Fulton-hospital-folo

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