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Report: Rural Hospitals Excluded From Government’s Push For Better Quality

Critical-access centers turn to ACOs

Crawford Memorial Hospital in rural Robinson, Illinois, is the only hospital for miles around. But Crawford, along with one-quarter of the hospitals around the country, is being left out of some of the biggest shifts in American health care initiated by the Patient Protection and Affordable Care Act (PPACA). These changes are aimed at bringing accountability to hospitals by linking Medicare payments to the quality of their care. They also are encouraging hospitals to monitor patients’ health so doctors and nurses can intervene before problems become acute.

The Department of Health and Human Services has not yet incorporated the 1,256 primarily rural, “critical-access” hospitals, such as Crawford, into Medicare’s pay-for-performance programs. With no more than 25 beds, these hospitals are generally located in isolated areas, making them the only acute-care option for local residents. Medicare repays them their cost plus 1% — more than it pays other hospitals — to ensure they do not close.

While some of the facilities deliver exemplary care, a study published last year by the Harvard School of Public Health found that death rates at critical-access hospitals in 2010 were higher than at other small, rural hospitals and in the industry overall.

The PPACA required the government to start testing how to provide bonuses and penalties to critical-access hospitals based on their quality of care by 2012, but Congress never provided any money.

Other Medicare efforts to improve care also are not making major inroads among rural hospitals.

Fewer than 1 in 20 critical-access hospitals are participating in accountable care organizations (ACOs), in which hospitals and doctors coordinate services with the promise of bonuses from Medicare if they deliver care more efficiently. Another project to test new ways to deliver rural health care is limited to five states, and the selection of participants has not been announced, even though the deadline for applications was in May.

Some rural health-care leaders say they are rankled at being marginalized and are concerned that they could be left behind as reforms spread.

“I do not want to see my hospital on the sidelines,” said Don Annis, chief executive of Crawford. “I want us to be prepared for this.”

Instead, Crawford is part of the Illinois Critical Access Hospital Network, which is developing its own ACO.

Critical-access hospitals have other reasons to be leery of the new incentives, as they are not eager to risk losing money if they perform poorly.

Forty-five states have designated some of their hospitals as “critical access” under a 17-year-old program that helped stop a wave of closings in rural communities. Fifty critical-access hospitals are located in Illinois, and even more are in Texas, Wisconsin, Nebraska, Kansas, Minnesota, and Iowa.

The PPACA excused critical-access hospitals from inclusion in the early years of Medicare’s pay-for-performance incentives. They are exempt from fines levied against hospitals with a large number of patients who return within 30 days, as well as penalties or bonuses based on patient-satisfaction reviews and hospital death rates.

Congress gave these hospitals a reprieve because of the difficulty in bringing them into the pay-for-performance programs. Many of the ways Medicare is measuring hospital quality require enough cases to be reliably analyzed, but these small hospitals often don’t have enough heart attack patients, for instance, to estimate death rates. Other measures look at surgical practices, but critical-access hospitals often send those patients to bigger institutions. Experts have come up with customized measures that could be used to judge rural hospital quality, such as the time it takes to evaluate a patient in the emergency room.

Other hospitals are required to report quality scores on Medicare’s Hospital Compare website. Critical-access hospitals can do that voluntarily, but many do not. Data show that only about one out of three critical-access hospitals report their emergency room quality measures, even if just to say they did not have enough cases to evaluate.

Some critical-access hospitals have found ways to get involved in new payment arrangements. For example, hospitals in the Rural Wisconsin Health Cooperative have contracts with private insurers that provide financial incentives for quality. In Batesville, Indiana, Margaret Mary Health joined six hospitals and a group of clinics around the country to form a virtual ACO with enough patients to qualify for the Medicare ACO program.

Medicare says 59 critical-access hospitals are participating in 18 of 338 ACOs.

Source: Kaiser Health News; September 30, 2014.

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