Grassley Introduces Bill to Extend Key Medicare Rural Hospital Programs Critical to Keokuk, Newton, Spencer, Fort Madison, Spirit Lake

Statement

Sen. Chuck Grassley of Iowa today continued his support of rural health care, introducing bipartisan legislation to permanently extend key Medicare rural hospital programs critical to five Iowa hospitals and many others around the country.

"These programs bring a lot of value for rural residents and taxpayers," Grassley said. "Small, rural hospitals offer good quality health care at a cost that compares well with urban hospitals' cost. Congress should extend the programs that help keep the doors open for rural Medicare beneficiaries."

The Rural Hospital Access Act of 2017, S. 872, would permanently extend the Medicare Dependent Hospital (MDH) and Low-Volume Hospital (LVH) programs. The Medicare Dependent Hospital designation helps rural hospitals that otherwise would struggle to maintain financial stability under Medicare's fee schedule because of their small size and the large share of Medicare beneficiaries who make up their patient base. Congress enacted payment modifications to help keep these hospitals open as a critical health care source for rural Medicare beneficiaries.

There are currently 160 Medicare Dependent Hospitals in 30 states, including five in Iowa. The Iowa hospitals are Keokuk Area Hospital, Skiff Medical Center (Newton), Spencer Municipal Hospital, Fort Madison Community Hospital and Lakes Regional Health Care (Spirit Lake).

The Low-Volume Hospital designation similarly offers hospitals that treat a low number of beneficiaries a payment formula that recognizes the fixed costs of treating these patients relative to the prospective payment system that favors high beneficiary volume. This funding is critical to the survival of these programs because they are frequently under financial stress due to their low volume in comparison to their urban counterparts. There are 594 low-volume hospitals nationwide.

Without an extension, these two programs will expire Oct. 1, 2017. Medicare Dependent Hospitals and Low-Volume Hospitals are the safety net providers for rural Americans and are extremely important to the economy of rural areas. In rural communities, hospitals are one of the biggest employers in the area. For the more than 1.3 million residents of rural Iowa, these hospitals help guarantee access to care and strengthen the economy. These programs have helped end the cycle of hospital closures, Grassley said.

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