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Rural Hospitals May Need More Help

May 14, 2009
by David Raths
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Do the nation's 1,300 rural critical access hospitals (CAHs) need more help than the Medicare bonus incentives made available to them in the HITECH Act?

After watching a recent presentation by Rich Donkle, director of financial consulting services for the Rural Wisconsin Health Cooperative (RWHC), I believe more grant funding may need to specifically target rural hospitals. (RWHC is owned and operated by 35 hospitals, 29 of which are designated critical access hospitals.)

How the Medicare EHR incentives tie into existing payment schemes for CAHs and larger urban hospitals is complicated. But RWHC points out that while most hospitals can expect to receive up to $4 million in added payments, CAHs might receive only $480,000 in extra funding from Medicare. Because of their low patient volumes, CAHs receive cost-based reimbursements for their Medicare patients (typically about a third of all patients), including Medicare's share of expenditures on health IT. Yet that payment scheme has not spurred rural hospitals to invest in EHRs. CAHs average just 1.3 on the HIMSS EMR adoption scale, while general medical/surgical hospitals average 2.4. The Congressional Budget Office has estimated that only half of CAHs will be meaningful users of health IT by 2019, Donkle said.

All the challenges involving the health IT workforce, cultural changes, physician involvement and ongoing health IT costs of EHR implementation are magnified in a rural setting, he added.

Most grant funding for rural areas in the HITECH Act involves greater broadband capacity, telemedicine or involvement in health information exchange. RWHC argues that more grant funding should aim at helping these rural hospitals with upfront capital costs. It also recommends that the incentive bonus should apply to the cost for PACS and other systems that lead down the road to a paperless environment, and that individuals who understand rural hospital issues and reimbursement should be included in discussions on achieving widespread health IT adoption.

We can't have a Nationwide Health Information Network without a strong rural component.

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