02.15.02

Cantwell To Cosponsor Legislation To Improve Rural Health Care

WASHINGTON, DC - U.S. Senator Maria Cantwell (D-WA) announced today that she cosponsored the Rural Health Improvement Act of 2001. Cantwell called the bill "important to the sustainability of rural health care providers."

This bill seeks to erase inequities in the Medicare system for rural providers, and improve services for rural patients by standardizing reimbursement amounts for all providers, whether urban or rural, and providing additional payment adjustments for low-patient volume health care facilities.

"Rural health care providers are unfairly disadvantaged by the Medicare reimbursement system. The service they offer the community is not a luxury. We need to get rural health care providers the help they need to survive."

Rural health care providers are disadvantaged financially because they lack economies of scale. Many facilities operate at a substantial loss when serving Medicare and low-income patients. Compared to urban inpatient margins of 13.5 percent, rural hospitals operate at a much slimmer 4.1 percent margin, and they operate at a deficit of 2.9 percent when treating hospitalized Medicare patients. These losses result in inadequate facilities and equipment over time, and the inability to modernize or upgrade technologically.

"The Rural Health Improvement Act will go a long way toward improving healthcare treatment, equipment, and facilities in rural areas," said Cantwell. "I'm working with my colleagues in the Senate for the passage of this bill."

The bill recognizes higher costs incurred by smaller facilities, and equalizes Medicare benefits by providing an inpatient payment adjustment for hospitals serving less than 800 patients per year, eliminating the disproportionate share payments (DSH) cap on rural providers, and standardizing the inpatient hospital payment. Additionally, the bill would provide low cost loans or grants for capital improvements, equipment upgrades and the establishment of network resource centers to provide technical assistance.

Overall, this is the Senate's most comprehensive amendment to title XVIII of the Social Security Act and the Public Health Service Act to date. Additionally, it provides vital improvements to our nation's rural health care system.