Rural Primary Care Hospitals

To maintain health care services in rural communities, Congress authorized limited-service hospitals, known as rural primary care hospitals, to operate in seven states--California, Colorado, Kansas, New York, North Carolina, South Dakota, and West Virginia. In October 1997, Congress replaced rural primary care hospitals with critical access hospitals, which were authorized to operate nationally. Existing rural primary care hospitals were eligible to participate in Medicare as critical access hospitals. GAO found that rural primary care hospitals were an important source of inpatient and outpatient care for Medicare beneficiaries in rural areas. Medicare payments to these hospitals for inpatient stays were, however, somewhat higher than payments would have been to full-service rural hospitals. A chief reason for this was that about 21 percent of the inpatient cases had lengths of stays that exceeded the 72-hour maximum in effect at the time, and eight percent would have exceeded the 96-hour limit for critical access hospitals. The Health Care Financing Administration (HCFA) has not established a way to enforce the length-of-stay limit, and GAO believes that one is needed to give critical access hospitals an incentive to adhere to the limit. For critical access hospitals and peer review organizations that are authorized to grant waivers to the 96-hour limit, HCFA also needs to define the conditions and the circumstances under which it would be appropriate to waive the requirement. HCFA also has not established a way to check compliance with the requirement that a doctor certify that patients admitted to rural primary care hospitals--now critical access hospitals--are expected to be discharged within the maximum allowed length-of-stay limit. Such a mechanism should underscore the importance of certification and its intent to ensure that only the appropriate kinds of patients are admitted.

GAO noted that: (1) RPCHs provide additional and, likely, much more proximate access to health care for Medicare beneficiaries residing in the rural areas where the facilities operate; (2) these facilities treat, on an inpatient basis, beneficiaries with less complex illnesses and furnish important stabilization and transfer services for those with more complex conditions; (3) moreover, RPCHs serve as the source of outpatient care ranging from primary to emergency care; (4) the 13 RPCHs for which complete data were available had 1,708 Medicare inpatient cases since they were certified to participate in the program; (5) the RPCHs provided the full inpatient stay for 1,545 beneficiaries who had less complex needs and stabilized and transferred an additional 163 beneficiaries to full-service hospitals; (6) the RPCHs treated primarily patients (65 percent of the total) who had respiratory ailments such as pneumonia, circulating system problems such as congestive heart failure, and digestive system illnesses such as inflammation of the digestive canal; (7) in addition, during the most recent cost-reporting period, these RPCHs provided more than 28,000 outpatient visits for more than 6,700 beneficiaries; (8) these outpatient visits ranged from those for primary care to emergency treatment for injuries; (9) Medicare payments for the 1,545 cases from September 1993 to May 1996 treated solely by an RPCH were slightly more than if these cases had been treated at full-service rural hospitals and somewhat less than if they had been treated at urban hospitals; (10) a primary reason why RPCH costs were higher than those for rural hospitals was that about 21 percent of the stays exceeded the 72-hour stay limitation in effect at the time; (11) without the extra inpatient days these cases involved, RPCH costs would likely have been lower than those for rural full-service hospitals; (12) the Health Care Financing Administration (HCFA) had not established a way to enforce the 72-hour maximum length-of-stay requirement for RPCHs, and it is important that the agency do so for the replacement CAH program's 96 hour maximum; (13) as is to be expected with limited-service hospitals, RPCHs in the four states GAO studied transferred a higher portion of patients to other hospitals than did full-service rural hospitals; and (14) total Medicare payments for the 163 transfer cases were about $148,000 higher than if a full service rural hospital had transferred the patients to another acute care hospital because of differences in the way payments are determined in the two situations.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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