Medicare measure may benefit rural hospitals
Legislation recently introduced by U.S. Sens. Mark R. Warner and Tim Kaine could ensure rural Virginia hospitals receive fair Medicare reimbursements — a move receiving praise by leaders from both Danville Regional Medical Center and Centra Health.
“Delivering quality care has always been a priority at Danville Regional Medical Center,” Danville Regional Medical Center CEO Alan Larson said in a statement. “The proposed legislation would help provide the resources needed to ensure that we continue to meet the needs of our community.”
The legislation would make sure federal Medicare funding is reflective of the costs of providing care. Under the bill, Warner said 21 hospitals operating in five of the commonwealth’s 11 statistical areas would receive reimbursements that reflect their operating costs.
“Rural hospitals are a lifeline to hundreds of thousands of Virginians, and are at the heart of many of our communities,” Warner said in a news release. “However, hospitals in rural areas face unique challenges and many struggle to stay afloat – challenges that are exacerbated by the federal government’s skewed payment system for services provided to Medicare beneficiaries at these hospitals.”
Centra Health CEO E.W. Tibbs said the legislation is a needed focus on local hospitals.
“This policy proposal aims to assist health systems like Centra that are major employers, economic engines and vital health care providers,” Tibbs said in a statement. “This legislation represents an important step forward in recognizing the financial burdens health systems like Centra face daily with dwindling government reimbursements.”
Centra operates Gretna Medical Center and has plans to build another in Danville.
In 2014, there were 14,839 Medicare recipients in Danville, or about 35 percent of the population. There were 10,481 recipients in Pittsylvania County, or about 17 percent of the population.
Kaine said the challenges faced by rural hospitals affect both access to care and long-term viability.
“The bipartisan Fair Medicare Hospital Payments Act aims to reform the way hospitals are reimbursed by Medicare for services by establishing a national standard, as opposed to the status quo which places an undue burden on rural hospitals in economically disadvantaged areas,” Kaine said in a release.
The legislation would create a national “area wage index” of 0.874, which is based on a hospital’s wage level in a geographic area compared to the national average. According to the Virginia Hospital Association, 29 hospitals in Virginia fall below this threshold, and would benefit from the legislation.
