Issue Position: Rural Health Care

Issue Position

As a native of McCook, Senator Nelson understands how important health care is to the survival of rural communities. Without basic services such as health care, rural areas cannot hope to attract new residents or retain existing residents. That is why Nebraska's Senator Ben Nelson has worked to improve access to health care in rural areas by ensuring that rural hospitals and providers have the resources they need to keep their doors open. Rural hospitals are a lifeline for many Nebraska communities. Unfortunately, many of these rural hospitals are facing a financial crisis. Currently, the amount hospitals receive from Medicare is pre-set by bureaucrats in Washington without regard to the special circumstances facing rural hospitals.

As a member of the Senate Rural Health Caucus, Senator Nelson has co-sponsored legislation to end Medicare's historic discrimination against states that do more with less. Rural hospitals are more dependent on Medicare payments as part of their total revenue; Medicare accounts for almost 70 percent of total revenue for small, rural hospitals. Rural hospitals have lower patient volumes, but must compete nationally to recruit providers due to the nursing and health professional workforce shortages. 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.

When the federal bureaucracy arbitrarily lowered the reimbursement rate for rural hospital lab services for less than its cost, Senator Nelson introduced the Critical Access to Clinical Lab Services Act of 2007, S. 1277, to overturn the regulation. The regulation stated that lab services would not be reimbursed by CMS unless the patient is at the facility where testing will occur. This change jeopardizes rural Nebraskans' access to care by imposing an additional burden on the frail elderly by requiring them to visit the hospital to get simple lab tests done. The additional time and expense incurred by the patient is unnecessary if a Critical Access Hospital (CAH) is willing and able to conduct tests at the point of patient care and transport it back to the hospital for analysis. Sixty-one rural hospitals in Nebraska were impacted by the regulation, costing some of these facilities hundreds of thousands of dollars. Senator Nelson successfully passed this legislation to alleviate this burden on rural Nebraska.

Many rural hospitals are too large to qualify for critical access hospital status, yet they are too small to benefit from the high volume of patients that larger hospitals enjoy. The Rural Community Hospital demonstration project which began in 2003 has played a critical role in helping rural hospitals to continue serving their communities and patients. Senator Nelson has introduced the Rural Community Hospital Demonstration Extension Act of 2009 to extend the current demonstration project which reimburses these mid-size rural hospitals at a reasonable cost rate so they may keep their doors open. This continued demonstration project will test the feasibility of making this reimbursement permanent and help increase the capability of these facilitates to meet the needs of their community.

Senator Nelson has also introduced the Health Professionals State Loan Repayment Tax Relief Act of 2009 which will improve health care in rural Nebraska and at least 15 other states by providing tax relief for doctors, nurses and other health professionals who receive state and local funds to help pay off student loans and commit to serving in rural communities. For years, state and local communities in Nebraska have teamed up to bring doctors, nurses and other health professionals to underserved rural areas by helping them pay off their student loans. However, the IRS has been treating this state and local award money in select states as ordinary taxable income. Many providers have had to take out personal loans simply to pay the tax on their original student loan forgiveness.

In August 2008, 116 health professionals were practicing under a three-year commitment in rural areas of the state and more than 700,000 people living in Nebraska have access to health professionals as a result of the rural incentive programs. Senator Nelson's bill creates the same tax exemption for Nebraska's program used for the National Health Service Corps and other loan repayment programs operating under federal guidelines.

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

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