Nelson bill aids rural hospitals

WASHINGTON -- Sen. Ben Nelson said he is co-sponsoring bipartisan legislation with Sen. Sam Brownback of Kansas to assure that people who live in rural communities will have access to quality, affordable hospital care.

The legislation won't be an easy sell in Washington, Nelson said, during a conference call with with administrators from five hospitals that are participating in a demonstration project, since Washington is better at dealing with urban issues than rural.

"It will be an uphill battle, but it's a battle we have to fight and will continue to do so."

The Nebraska hospitals involved in the project include the Beatrice Community Hospital, Columbus Community Hospital, Community Hospital of McCook, Phelps Memorial Health Center in Holdrege and Tri-County Area Hospital District in Lexington.

"The Rural Community Hospital Assistance Act makes certain that senior citizens will be able to receive the same quality of health care throughout the country whether they live in rural or urban areas," Nelson said.

"What's happening is another example of when it comes to rural living Washington just doesn't get it. They understand big hospitals and they understand small hospitals, to some extent, but they don't understand mid-sized hospitals at all and as a result mid-sized hospitals are being unfairly reimbursed by Medicare and Medicaid. This bill will change that."

The five hospitals are among 14 nationally in eight sparsely populated states that are participating in the demonstration program that was mandated in the Medicare Modernization Act passed by Congress in response to financial concerns of rural hospitals.

Nelson and Brownback plan to introduce bipartisan legislation with to allow all rural hospitals to receive adequate reimbursement from Medicare based on the success of the demonstration project. That would include about 560 hospitals nationwide, including the five in Nebraska.

"In a rural state like Kansas, community hospitals form the backbone of the health care infrastructure," said Sen. Sam Brownback. "This legislation will preserve access to the high-quality health care delivered at these hospitals. "Kansans and other Americans in rural communities deserve nothing less."

"Many rural hospitals are too large to qualify for critical access hospital status, yet they are too small to benefit from the economies that larger hospitals enjoy," said Nelson. "Their rural population base also lends to a greater reliance on Medicare as a source of revenue than urban hospitals."

The legislation would allow rural hospitals with 26-50 acute care beds the option of receiving Medicare payments based on 101 percent of costs using the same formula used for smaller rural hospitals. These hospitals are currently paid by a formula that does not pay them their true cost of providing care.

The economic impact on the five hospitals in the demonstration project alone amounts to $34-35 million in Nebraska over the next five years. Adding the additional services would increase this estimate to 55-56 million dollars for the same time period.

This is the latest in a series of bills Nelson has introduced that champion the cause of rural health care. Summary of other rural health care legislation follows:

Nelson worked with Sen. Brownback to introduce legislation to create the new designation of "rural community hospital" for hospitals with between 25 and 50 beds.

Under this proposal, which was included as a pilot program in the Medicare Modernization Act of 2003, 15 rural community hospitals -- including five in Nebraska -- will receive cost-based Medicare reimbursements, allowing them to recoup their costs of providing care as well as to maintain their facilities by making necessary improvements.

The Brownback-Nelson legislation also included enhanced cost-based reimbursement for even smaller, rural hospitals. This provision was also included in the Medicare bill and provides the 60 critical access hospitals in Nebraska with the financial means to make critical infrastructure and technology upgrades.

Nelson has a strong commitment to protecting these critical access hospitals. When the Centers for Medicare and Medicaid Services changed a regulation to lower the reimbursement rate for off-site laboratory services, Senator Nelson introduced legislation to reinstate the original formula. Many CAHs provide laboratory services in rural health clinics and nursing homes in smaller, neighboring communities, as well as in home-health settings; however, the elimination of cost-based reimbursement may make it prohibitive for them to continue offering off-site laboratory testing.

As a result, Medicare beneficiaries will have to travel to a CAH to have laboratory specimens drawn. The additional time and expense these patients will have to incur is entirely unnecessary if the CAH is willing and able to draw a specimen at the point of patient care and transport it back to the CAH for analysis. This change imposes a considerable burden on patients, particularly the sick and the elderly, and jeopardizes their access to care.

Nelson voted for legislation to end Medicare's historic discrimination against states that do more with less. Medicare's complex funding formula penalized rural states such as Nebraska for practicing cost-effective medicine by reimbursing them at a lower rate.

Health care providers and hospitals in Nebraska received a lower reimbursement for the same procedure performed in New York. This practice created a disincentive for doctors and nurses to stay in rural areas and hurt hospitals that were already struggling financially. The legislation Senator Nelson supported helped equalize the reimbursement rate between urban and rural America. 

Nelson understands the difficulty rural areas face when trying to recruit physicians. Senator Nelson cosponsored legislation that provides a special visa to foreign doctors who agree to spend three years serving in the state. The program has been successful in retaining these physicians with 83 percent of those who have served in Nebraska remaining past their assigned period of time. 

The National Rural Health Association recognized Senator Nelson as one of the top legislators for 2004 for his work on rural health care issues.