Rural Health

Health Hippo: Rural Health

Health Hippo: Rural Health


Walking is the best medicine.

Predicting the survival of rural hospitals is no easy task. A 1989 study of rural hospitals in Northwestern states, for example, listed eight “high risk” hospitals in Minnesota. High risk was defined as hospitals with net overall losses in three of the last four years. Although none of the hospitals listed in the study closed, 15 other rural Minnesota hospitals did. In addition to being social institutions, rural hospitals play important roles in attracting retirees and industry to small communities. In rural Minnesota, 55% percent of the communities with hospitals rank health care as their first or second leading industry and 81% of these communities rank health care in their top five industries. Rural hospitals are termed “small” in statewide size comparisons, but when viewed from their community’s perspective they are enormous resources.

U.S. Code

  • Affordable Care Act: Rural Provisions
    • Sec. 3121. Extension of outpatient hold harmless provision.
    • Sec. 3122. Extension of Medicare reasonable costs payments for certain clinical diagnostic laboratory tests furnished to hospital patients in certain rural areas.
    • Sec. 3123. Extension of the Rural Community Hospital Demonstration Program.
    • Sec. 3124. Extension of the Medicare-dependent hospital (MDH) program.
    • Sec. 3125. Temporary improvements to the Medicare inpatient hospital payment adjustment for low-volume hospitals.
    • Sec. 3126. Improvements to the demonstration project on community health integration models in certain rural counties.
    • Sec. 3127. MedPAC study on adequacy of Medicare payments for health care providers serving in rural areas.
    • Sec. 3128. Technical correction related to critical access hospital services.
    • Sec. 3129. Extension of and revisions to Medicare rural hospital flexibility program.
    • Sec. 3131. Payment adjustments for home health care.
    • Sec. 3132. Hospice reform.
    • Sec. 3133. Improvement to medicare disproportionate share hospital (DSH) payments.
    • Sec. 3134. Misvalued codes under the physician fee schedule.
    • Sec. 3135. Modification of equipment utilization factor for advanced imaging services.
    • Sec. 3136. Revision of payment for power-driven wheelchairs.
    • Sec. 3137. Hospital wage index improvement.
    • Sec. 3138. Treatment of certain cancer hospitals.
    • Sec. 3139. Payment for biosimilar biological products.
    • Sec. 3140. Medicare hospice concurrent care demonstration program.
    • Sec. 3141. Application of budget neutrality on a national basis in the calculation of the Medicare hospital wage index floor.
    • Sec. 3142. HHS study on urban Medicare-dependent hospitals.
    • Sec. 3143. Protecting home health benefits.
    • Sec. 3504. Design and implementation of regionalized systems for emergency care.
    • Sec. 3505. Trauma care centers and service availability.
    • Sec. 10221. Indian health care improvement.
    • Sec. 10306. Improvements under the Center for Medicare and Medicaid Innovation.
    • Sec. 10313. Revisions to the extension for the rural community hospital demonstration program.
    • Sec. 10314. Adjustment to low-volume hospital provision.
    • Sec. 10316. Medicare DSH.
    • Sec. 10317. Revisions to extension of section 508 hospital provisions.
    • Sec. 10324. Protections for frontier States.
    • Sec. 10403. Amendments to subtitle C.
      • Urban, rural and frontier grants
    • Sec. 10404. Amendments to subtitle D.
      • Urban, rural and frontier grants
  • Medicare Modernization Act: Rural Health Provisions
    • Sec. 401 Equalizing urban and rural standardized payment amounts under the medicare inpatient hospital prospective payment system.
    • Sec. 402 Enhanced disproportionate share hospital (DSH) treatment for rural hospitals and urban hospitals with fewer than 100 beds.
    • Sec. 403 Adjustment to the medicare inpatient hospital prospective payment system wage index to revise the labor-related share of such index.
    • Sec. 404 More frequent update in weights used in hospital market basket.
    • Sec. 405 Improvements to critical access hospital program.
    • Sec. 406 Medicare inpatient hospital payment adjustment for low-volume hospitals.
    • Sec. 407 Treatment of missing cost reporting periods for sole community hospitals.
    • Sec. 408 Recognition of attending nurse practitioners as attending physicians to serve hospice patients.
    • Sec. 409 Rural hospice demonstration project.
    • Sec. 410 Exclusion of certain rural health clinic and federally qualified health center services from the prospective payment system for skilled nursing facilities.
    • Sec. 410A Rural community hospital demonstration program.
    • Sec. 411 Two-year extension of hold harmless provisions for small rural hospitals and sole community hospitals under the prospective payment system for hospital outpatient department services.
    • Sec. 412 Establishment of floor on work geographic adjustment.
    • Sec. 413 Medicare incentive payment program improvements for physician scarcity.
    • Sec. 414 Payment for rural and urban ambulance services.
    • Sec. 415 Providing appropriate coverage of rural air ambulance services.
    • Sec. 416 Treatment of certain clinical diagnostic laboratory tests furnished to hospital outpatients in certain rural areas.
    • Sec. 417 Extension of telemedicine demonstration project.
    • Sec. 418 Report on demonstration project permitting skilled nursing facilities to be originating telehealth sites; authority to implement.
    • Sec. 421 One-year increase for home health services furnished in a rural area.
    • Sec. 422 Redistribution of unused resident positions.
    • Sec. 431 Providing safe harbor for certain collaborative efforts that benefit medically underserved populations.
    • Sec. 432 Office of Rural Health Policy improvements.
    • Sec. 433 MedPAC study on rural hospital payment adjustments.
    • Sec. 434 Frontier extended stay clinic demonstration project.

Code of Federal Regulations

    • Sec. 5.1 Purpose.
    • Sec. 5.2 Definitions.
    • Sec. 5.3 Procedures for designation.
    • Sec. 5.4 Notification and publication of
    • Appendix A Criteria for Designation of Areas Having Shortages of Primary Medical Care Professionals.
    • Appendix B Criteria for Designation of Areas Having Shortages of Dental Professionals.
    • Appendix C Criteria for Designation of Areas Having Shortages of Mental Health Professionals.
    • Appendix D Criteria for Designation of Areas Having Shortages of Vision Care Professionals.
    • Appendix E Criteria for Designation of Areas Having Shortages of Podiatric Professionals.
    • Appendix F Criteria for Designation of Areas Having Shortages of Pharmacy Professionals.
    • Appendix G Criteria for Designation of Areas Having Shortages of Veterinarian Professionals.


  • Owensboro Medical Health System (2014)(medical assistance/general assistance days associated with patients covered under the Kentucky State Plan properly excluded from the numerator of the Medicaid proxy of the Medicare disproportionate share hospital)
  • California Association of Rural Health Clinics (2013)(California legislation that eliminates coverage for certain healthcare services, including adult dental, podiatry, optometry and chiropractic services, conflicts with the Medicaid Act and is therefore invalid)
  • Health Alliance Hospital Leominster (2013)(observation bed days for the Provider’s fiscal year ending September 30, 2003 (“FY 2003”) were improperly excluded from the calculation of the bed count for purposes of qualifying for a disproportionate share hospital)
  • Memorial Hospital of Salem County (2011)(Provider is allowed an increase of 1,001 Medicaid eligible days for a total of 2,254 in the calculation of its DSH Medicaid fraction)
  • Indiana DSH-HCI Days Group (2011)(Intermediary properly excluded Indiana HCI program days from the numerator of the Providers’ Medicaid proxy for the Medicare DSH calculation)
  • St. Barnabas (2010)(Intermediary properly refused to include New Jersey Charity Care Program days in the numerator of the Providers’ Medicaid proxy)
  • Select Medical 2003-2006 New Hospital Capital Related Costs Group (2010)(Providers are entitled to the exemption for new hospitals for cost reports)
  • Select Medical 2002-2003 Freestanding “new Hospital” Capital-Related Costs Groups (2009)(Because the LTCHs are completely different from short term acute care hospitals, they would have the same special needs as new hospitals with regard to payments for capital)
  • Iroquois Memorial Hospital (2003)(One of the criteria to qualify for special treatment as a MDH facility is that the hospital cannot also be classified as a SCH. The record shows that the Provider attained SCH status on January 14, 2002. Therefore, by the time MDH status could have been granted, the Provider did not qualify under the governing regulation)
  • Howard Young Medical Center (1998)(Provider adequately demonstrated that it met all requirements and is entitled to Sole Community Hospital status)
  • A.O. Fox Memorial Hospital (1998)(Intermediary properly denied the Provider’s request for rural referral center status because it was not timely filed)


  • CMS Has Yet To Enforce A Statutory Provision Related to Rural Health Clinics (OIG 2014) Approximately 12 percent of RHCs no longer meet the location requirements. Pursuant to the BBA, these RHCs should continue to qualify as RHCs and receive enhanced reimbursement only if they are determined to be essential providers.
  • Most Critical Access Hospitals Would Not Meet the Location Requirements If Required To Re-enroll in Medicare (OIG 2013) Nearly two-thirds of CAHs would not meet the location requirements if required to re-enroll. The vast majority of these CAHs would not meet the distance requirement. If CMS had decertified CAHs that were 15 or fewer miles from their nearest hospitals in 2011, Medicare and beneficiaries would have saved $449 million. podcast
  • MedPac: Critical Access Hospitals Payment System Medicare beneficiaries can receive care in over 1,300 small hospitals called critical access hospitals (CAHs). CAHs are limited to 25 beds and primarily operate in rural areas. Unlike traditional hospitals (which are paid under prospective payment systems), Medicare pays CAHs based on each hospital’s reported costs. Each CAH receives 101 percent of its costs for outpatient, inpatient, laboratory and therapy services, as well as post-acute care in the hospital’s swing beds.
  • HIV Testing in HRSA-Funded Health Center Sites (OIG 2013) We did this study to determine the extent to which HRSA-funded sites adopted four practices that CDC recommended: (1) routine HIV testing of all patients 13–64 years of age; (2) not requiring prevention counseling for all patients; (3) gaining patient consent for the HIV test in the same way as for other screening and diagnostic tests; and (4) providing HIV tests as standard, opt-out tests.
  • Quality Assurance and Care Provided at HRSA-Funded Health Centers (OIG 2012) This memorandum report provides information about the extent to which health centers maintained quality assurance programs and health center patients received primary health services in four areas: preventive health exams, vaccinations, referrals for specialized treatment, and dental services.
  • FCC’s Performance Management Weaknesses Could Jeopardize Proposed Reforms of the Rural Health Care Program (GAO 2010) Telemedicine offers a way to improve health care access for patients in rural areas. The Federal Communications Commission’s (FCC) Rural Health Care Program, established in 1997, provides discounts on rural health care providers’ telecommunications and information services (primary program) and funds broadband infrastructure and services (pilot program).
  • Information on Participation in the Rural Health Care Pilot Program (GAO 2010) provides information on participation in the Federal Communications Commission’s (FCC) Rural Health Care Pilot Program – a program worth roughly $418 million funded through the Universal Service Fund – which provides funding to selected pilot projects for designing and installing regional and state broadband networks that serve rural health care providers.
  • Health Professional Shortage Areas: Problems Remain with Primary Care Shortage Area Designation System (GAO 2006) To identify areas facing shortages of health care providers, the Department of Health and Human Services (HHS) relies on its health professional shortage area (HPSA) designation system. HHS designates geographic, population-group, and facility HPSAs. HHS also gives each HPSA a score to rank its need for providers relative to other HPSAs.
  • Status of Rural Health Clinic Program (OIG 2005) Under Medicare and Medicaid, RHCs receive cost-based reimbursement or a capped amount that is normally higher than a typical physician office visit. Payments for RHC services continue to increase and exceeded $630 million in calendar year 2002. To be eligible for RHC status, a clinic must be located in a “rural” and “underserved” area.
  • Health Centers And Rural Clinics: State and Federal Implementation Issues for Medicaid’s New Payment System (GAO 2005) GAO reviewed states’ implementation of the new payment requirements, the need to rebase or refine the BIPA PPS, and the Centers for Medicare & Medicaid Services’ (CMS) oversight of states’ implementation. GAO surveyed the states about their payment methodologies, did a targeted review in four states, and reviewed indexes used to reflect medical care inflation.
  • Rural Primary Care
    Hospitals: Experience Offers Suggestions for Medicare’s Expanded Program
    . (GAO 1998) Reviews
    the rural primary care hospital (RPCH) program, assessing compliance with the requirements that RPCHs have an
    average length of stay of 72 hours or less and that physicians certify that inpatients are expected to be discharged
    within 72 hours.

  • Rural Health Clinics: Growth, Access, and Payment (OIG 1996) We cannot be certain of whether the recent spurt of growth in RHCS represents a positive development, in terms of opening access to care, or a negative one, in terms of cost or excess capacity. However, we do have reason to raise some concerns for immediate action or further study.
  • Public Health: A
    Health Status Indicator for Targeting Federal Aid to States
    (GAO 1996) Pursuant
    to a congressional request, GAO identified measures of the health status of states’ populations that could be used
    to target federal funds.

  • Rural Health
    Clinics: Rising Program Expenditures Not Focused on Improving Care in Isolated Areas
    (GAO 1996) Pursuant to a congressional request, GAO reviewed the Rural Health Clinic (RHC) Program.

  • Area Health Education Centers: A Role in Enhancing the Rural Practice Environment (OIG 1995) We recommend that the Public Health Service strengthen the role of AHEC3 by facilitating their ability to focus support services on three areas: clinical practice guidelines, managed care, and telecommunication.
  • Trends in Rural Hospital Closure: 1987-1993 (OIG 1995) Over the past decade, closure of general, acute care hospitals raised concerns about continued access to care and the appropriateness of related Federal and State health care policies. A number of studies predicted that hospitals would continue closing for several years.
  • Health Professions
    Education: Role of Title VII/VIII Programs in Improving Access to Care Is Unclear
    (GAO 1994) During the past decade, the supply of nearly all health professionals has increased faster than has the population. For most health professions, however, data are unavailable to show whether this increased supply has translated into more access to care in rural and underserved areas.

  • Trends in Rural Hospital Closure (OIG 1993) This report describes the phenomenon of rural hospital closure in the United States during a 5-year period — 1987-1991. It examines the extent, characteristics, reasons for and impact of rural hospital closure.
  • Rural Hospitals: Federal Efforts Should Target Areas Where
    Closures Would Threaten Access to Care
    (GAO 1991) Pursuant to a congressional request, GAO
    examined the causes and consequences of rural hospital closures, focusing on the: (1) major factors associated with
    a higher risk of closure; (2) impact of hospital closure on rural communities and health care costs; and (3) role of
    Medicare in closures.

  • Effects of 1988 Rural Hospital Closures on Access to Medical Care (OIG 1990) Most residents do not express a serious problem with access to medical care since closure of the hospital in their communty. However, close examination of the survey results reveals that whether the residents of a community where a rural hospital closed believe they have serious access problems is largely determined by proximity to another hospital.
  • Rural Health Clinic Services Act Has Not Met Expectations
    (GAO 1982) GAO reviewed the progress made by the Department of Health and Human Services (HHS) to
    implement the Rural Health Clinic Services Act, the extent to which Medicare beneficiaries use the clinics, and any
    obstacles preventing broader implementation of the Act.


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