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More than 200 rural hospitals are close to closure, iVantage study claims

The decision by some states not to expand Medicaid under the Affordable Care Act has had a negative financial impact on rurals, report finds.

Susan Morse, Managing Editor

As of February 2, 67 rural hospitals have closed nationwide since 2010 and another 210 are on the brink, according to a study by iVantage Health Analytics.

The study found a total of 673 facilities are at-risk of closing. Of these, 210 are the most vulnerable.

iVantage did not release the names of the hospitals but did give the states that have the highest, and lowest, percentages of hospitals that are in danger of closing.

All 673 vulnerable hospitals are clustered in 42 states, while eight states and the District of Columbia have no vulnerable facilities, according to the study.

Rural hospitals in southern states are particularly at-risk.

In Mississippi, 79 percent of rural facilities have a high rate of vulnerability; in Louisiana, it's 58 percent; Georgia, 53 percent; and in Texas, 50 percent, according to the study's Hospital Vulnerability Index.

Other states with high vulnerability rates include California, Nevada, Oklahoma, Missouri, Tennessee and West Virginia.

States low on the vulnerability scale include Maine, New Hampshire, Vermont, Connecticut, Maryland, Delaware, Utah and Oregon.

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Overall, one in three rural hospitals nationwide are vulnerable, according to iVantage Senior Vice President Michael Topchik.

Topchik and others in the Portland-Maine based company, as well as legislators, attended the annual National Rural Health Association Policy Institute being held from Feb. 2-4 in Washington, D.C.

Sixty-five percent of rural hospitals operate on a negative margin, the study said. Federal reimbursement cuts and policy decisions have cut their revenue.

[Also: Critical access hospital River's Edge bucks rural trend, plans expansion after profitable year]

Critical access hospitals make up 461 of the 673 vulnerable facilities, according to iVantage. If critical access hospitals were able to participate in CMS's value-based purchasing program, their net inflow would be $137 million, the study said.

At least two bills address funding and policy decisions by the Centers for Medicare and Medicaid Services that threaten rural survival.

A bill proposed by Senator Chuck Grassley, R-Iowa, would change the current CMS mandate that critical access hospitals give around-the-clock emergency services. The Rural Emergency Acute Care Hospital Act would provide alternate delivery models of care for Critical Access Hospitals that would allow for more outpatient services.

[Also: Community rallies to save struggling rural Mendocino Coast District Hospital]

Another Grassley-sponsored bill, the Rural Community Hospital Demonstration Act of 2015, would extend the CMS demonstration program for another five years. On Jan. 25, this bill was referred to the House Committee on Ways and Means. The demonstration pays participating hospitals under a cost based methodology for inpatient hospital services.

A Save Rural Hospitals Act by Rep. Sam Graves, R-Missouri, would eliminate the Medicare sequester for rurals, among other initiatives. The sequester, that went into effect in March 2013, cut two percent from Medicare spending. Over ten years, the cuts are expected to save $123 billion, including an estimated $2.8 billion slated for rurals, according to the Congressional Budget Office.

[Also: MedPAC suggests converting rural hospitals to outpatient, emergency facilities]

In March 2015, critical access hospital swing-bed reimbursement was proposed to be lowered to match that of alternative facilities.

The hospitals on the vulnerable list tend to serve the sick and challenged populations, the study said. The decision by some states not to expand Medicaid under the Affordable Care Act had a negative financial impact on rural hospitals. In states without Medicaid expansion, more than 16 percent were considered vulnerable, compared to 8 percent in states that had expanded Medicaid, according to iVantage's 2014 study.

The study included 2,078 hospitals and excluded those with more than 200 beds.

Twitter: @SusanJMorse