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45 rural hospitals losing critical access status, must reapply

Affected organizations must reapply by September 2016

Medical Center of Peach County decided in 2011 to go further than a clinical partnership and become a part of a larger hospital organization, central Georgia’s Navicent Health System.Medical Center of Peach County decided in 2011 to go further than a clinical partnership and become a part of a larger hospital organization, central Georgia’s Navicent Health System.

Forty-five critical access hospitals will lose their rural status amid changes in federal demographic classifications, and must reapply to the Centers for Medicare & Medicaid Services by September 2016 to keep their critical access designation.

The U.S. Census Bureau and Office of Management and Budget changed their urban and rural classification in several dozen regions around the country. For the critical access health program, that meant reclassifying 105 rural counties as located in an urban area. The 45 affected hospitals in those counties now must prove that they serve largely rural and small town populations.

There are two routes rural hospitals can take to keeping their designation, according to the American Hospital Association. First, the hospitals can show that they lie in a rural-urban commuting area that has a population density of less than 50,000. The other way requires the state to take legislative or regulatory action that defines a hospital as rural.

In either case, rural hospitals recertifying their status need to send documentation to their CMS regional office by September 30, 2016.

Many rural hospitals trace their roots back to the post-World War II baby boom, often financed in large part by federal, state and local governments. Today, rural hospitals face a host of challenges. They serve low-income populations and aging baby boomers with a high rate of chronic disease, face stagnating funding levels and in some cases reimbursement cuts, and operate without Medicaid expansion in many southern, rural states.

In the last year, 22 rural hospitals have closed, all but two of them in states that have not expanded Medicaid, according to the National Rural Health Association. The 45 hospitals that have to reapply for their federal rural designation are scattered across 21 states. Five hospitals in Louisiana need to certify, and four in both Arizona and Washington.

Nineteen hospitals in 11 states that have not expanded Medicaid also need to reapply.

In those states, a coverage gap has emerged for people who earn too much to qualify for Medicaid but too little to qualify for health insurance exchange subsidies. In Georgia, where two critical access hospitals will have to recertify as rural, four rural hospitals have closed since 2012, out more than 30 critical access hospitals in the state.

Two hospitals in Georgia have taken several steps to sustain their business.

Morgan Memorial Hospital, a community facility 60 miles east of Atlanta, was built in 1957 and designated as critical access in 1999, after which it expanded to offer a range of outpatient services including behavioral health, physical, occupational and speech therapy, and senior support programs. Earlier this year Morgan Memorial entered into a clinical collaboration partnership with Athens Regional Health System to expand primary care and access to specialists.

Meanwhile, the Medical Center of Peach County, the other rural hospital that will have to recertify despite being 100 miles away from Atlanta, decided in 2011 to go further than a clinical partnership and become a part of a larger hospital organization, central Georgia’s Navicent Health System. That allowed the critical access hospital to build a new $27 million medical center in 2013, 60 years after its founding and a decade after a decision to rebuild. The medical center now offers inpatient acute care, along with intensive care, rehabilitation, inpatient and outpatient therapy, lab services and sleep studies, while referring and transferring complex cases to specialists and tertiary care facilities in the parent system.

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