Without their integral involvement. I think from the challenges, the article does that, naming them, talking about them, and trying to understand where theres common ground, theres difficulties figuring out, ultimately with a goal of Getting Services to people who need them, from a Public Health evidence based services to people that need them is the end game we want. And then lastly data, we took a cursory look for today. Id like to do more on that, i think thats critical. Mark . Where you live often changes where you think. Where im located, i dont see the negatives as much as the positives. Were flooded with great opportunities, we cant take in all of them. To see the partnerships that are going on are terrific. So im very positive on this. I think in terms of addressing the challenges, it is the faith communities can be the trip wires for the challenge and the solution at the same time. Weve had conversations with the north american chair of somalia, hes very interested in working with us, taking the networks in somalia and the communities of somalia, kenya, and any other place. Hes already reached out to the head in somalia, will you work with me on this . Were not working on how to make that happen. We want to look at that, the imam came to meet with us a couple weeks ago. Im going to go out to minneapolis to speak with him directly. I think we can take the mechanisms we have for Public Private partnerships and use the religious leaders to answer the challenges that may come out of the religious community. I just want to agree with what the other panelists have said, and add a couple things, we certainly need to reach the poorest of the poor, i want us to not leave the marginalized reasons behind. And which makes it much more difficult conversation for us. Its necessary in hiv and aids. The other important issues that would help practitioners. Jimmy carter and others who recognized the importance of this 30 years ago, and started working with us, theres a robust, but small body of work on cross training, our practitioners and people on the ground to talk with each other and define some of that common language that john was talking about, so it helps us we have to have the same language to have a conversation about particularly sensitive issues. Its always a challenge. Just to end on a trend that i see in academia and elsewhere, i think speaks to the future in a very important way. Its this Incredible Group that we have seen with john at emery, that we have seen. Interdisciplinary aproechs to development, Public Health and theology, that include all of our schools and also a real growth in degrees and development, and theology and all of this cross training. That i think makes me very hopeful about what the leadership will look like 10 years from now, 15 years from now, on these kinds of issues we all hold so dear. Theres a lot of bright light on the horizon when it comes to new leadership. This has been such an interesting panel, i think it opens the door for so many more conversations and so much happening in the field right now, great thanks to all of you for what youre doing in this area, and sharing your insights with us. Please join me in thanking our panel. The cspan cities tour visits cities across america every other weekend on cspan2. And this month, the cities tour is on cspan every day at 6 00 p. M. Eastern. Today topeka kansas and the violent confrontations of the 1850s, over whether kansas would be a free or a sliv state. Also, a tour of the state capitol. And a conversation with the states governor. When Congress Returns from its august recess, one of the first items of business will be a resolution of the Nuclear Agreement with iran and other world powers. Starting tomorrow night, well bring you key statements and hearings that took place after the deal was announced in mid july. Including a speech in early august by president obama at american university. Statements for and against the agreement by senate leaders. Congress has until september 17th to pass the resolution. Next, look at the challenges faced by patients and Health Care Providers in Rural Communities and hospitals, with government officials, ceos and specialists from missouri, mississippi, washington and kansas. A senate Preparations Committee held the hearing earlier this year. The appropriations subcommittee on labor, health and Human Services, education related agencies will come to order. Were glad to have all of you this morning, i want to thank the witnesses for appearing before the subcommittee today to discuss the unique Health Care Needs that face Rural Communities. We have two panels this morning, members should know that i expect to call up the second panel around 11 00 a. M. , so we have adequate time to hear from both, and, of course, if for some reason we get done with this panel earlier than that, well go to the second panel quicker. Well try to go no later than 11 00, were glad that everyone has come today to talk about this issue. One of the priorities of the committee and my priorities has been to ensure that all americans have access to quality and Affordable Health care in their local communities regardless of where they live. The obstacles faced by Rural Health Care patients and providers in Rural Communities are unique, and often significantly different from those in urban areas, albeit the Truman Medical Center in kansas city tomorrow, and they have a different set of problems. Both our intercity hospitals and rural hospitals have challenges that are unique to them in Rural Health Care, the issues can range from a lack of access to simple primary care physicians to difficulty findsing a specialist. Many patients have to drive long distances to seek care or may not receive care until its too late. Ultimately cost taxpayers more in medicare expenditures than if we had provided access in a better way, i think its critically important that washington recognize that Health Care Access is essential to the survival of Rural Communities across the country. Some of the proposals within the departments budget and recent regulations that have been issued that would disproportionately affect Rural Health Care and jeopardize Health Care Access, you do that, you threaten the survival of small towns. The medicare Payment System fails to recognize the unique circumstances of rural or small hospitals, this administration has appeared in my view to target a rural hospital in particular. The department once again has proposed to decrease the reimbursement rate for critical access hospitals, and eliminate critical access hospitals within 10 miles of any other hospital. The department has proposed that change for years. Just recently been able to provide details to the hospital about which hospitals would be eliminated if we look at that new mileage standard. The department has continuously issued regulations that would disproportionately affect small and rural hospitals more than their larger urban counterparts. Cmss payment for critical access hospitals and the direct physician supervision rules. And recovery audit, contractor ought ids, not only hinder the care of patients. And resources to comply with those rules. Finally, given the fact that the department requested billions this year, is more surprising or maybe not so surprising that the office of rural health received a 20 million cut that the administration issues, the administration has never once asked for an increase in rural health programs. More than 46 million americans live in rural areas and rely on rural providers as their lifeline to care. They face ongoing challenges in assessing proper medical treatment. Certainly senator murray and i both have an interest in this, i look forward to working with her and the rest of the committee to ensure that all americans have access to Affordable Health care. Thank you for calling this hearing on an important topic. Im particularly excited to welcome julie peterson. Julie is the chief executive officer. Through her work at pmh and her leadership across our state, julie is helping that Rural Communities are getting the health care they need. Thank you for coming all the way out here and testifying today. Over the last few years we have taken historic steps forward when it comes to making our Health Care System work better for our families, i believe there is much more we can do to continue to improve affordability, access, equality, and keep building a Health Care System that works for women, families and seniors and puts their needs first. In my home state of washington, where about one out of every five residents lives in a rural area. A critical part of this work is making sure that families can find the doctors they need in their own community, regardless of whether they live in prosser or seattle. This is true in many other parts of the country as well. This is a serious challenge ive been focused on for a long time, and im proud that Washington State has done so much to tackle it head on. This approach could reduce emergency room visits and help patients avoid the cost and inconvenience of leaving home to get care. I hear repeatedly about the number of new patients getting coverage through the Affordable Care act across my state. For example, a network of four Rural Health Clinics reported a 43 increase in patients last year. Thats great news, but it also means we need to think carefully about how to make sure there are enough doctors and other Health Care Providers to treat all of the patients. Im glad to have the opportunity today to talk about the investments we need to make, so we can build on that progress. The agreement took important steps to support access to health care in rural areas, it included funding for Health Centers, each of which play a Critical Role in expanding access to critical care, especially in our rural areas. The sgr legislation my home state of washington was a leader in setting up these training programs, and now primary care providers are being trained in communities with a shortage of Health Care Providers from spokane to yakima to our pu pullette tribe. Im pliesed we were able to agree to sustain those investments, i hope well be able to do more moving forward. Im pleased the 3rezs budget maintains investments in other key programs that support rural health. Providing outpatient drugs to Health Care Providers at lower costs. 26 of 39 hospitals participate in that program. Similarly, the budget continues to support enhanced payment for Rural Health Clinics. In my home state and many others, these facilities help make sure that when a parent needs to take a sick child to the doctor or a senior needs followup care, its easier for them to get the treatment they need in their own community. We need to make sure they have the resources that they need. I do also want to express concern that the budget proposes to cut the rural hospital Flexibility Program, that Program Helps sustain and improve hospitals in the most difficult to reach communities including 10 hospitals in my home state. I believe we need to seek strong support for this investment for families in Rural Communities. I want to know if the president s budget is able to sustain the investments, along with supporting other key priorities to defense because it responsibly replaced the harmful cuts from sequestration that are now set to kickback in. Im proud that republicans and democrats were able to comb together to reach an agreement that rolled back sequestration for fiscal years 2015. I hope we can build on that bipartisan foundation and prevent these harmful cuts to investments in families and jobs in our k34e, including critical support nor our Rural Health Care. I look forward to working with all of our colleagues on this in the coming weeks and months, and i want to thank all of our witnesses for being here. Thank you for holding this important hearing, this is a topic that means a lot to the people in my state. We have two witnesses on the first panel, the center for medicare and Medicaid Services. And tom morris. Were pleased youre both here and well listen to your opening statements. I want to thank you for the opportunity to testify here today on the topic of rural health. Across the department of health and Human Services there are a range of departments and resources that support Rural Communities. This included 11 billion in Grant Funding that went to Rural Communities. My office serves as the focal point with continued access to care. There are nearly 15 Million People living in rural areas, about 15 of the population, spread across 80 of the land mass in the united states. Individuals in Rural Communities often have to travel further for their care. This can have an impact on their health care outcomes. Over the past 20 years, life skpen tanscy has been lower than urban and that gap is widening. Hersa helps improve health care in Rural Communities, investing in Community Centers and expanding the use of telehealth. We have several initiatives that focus on capacity building. We fund the state offices and that ensures theres a focal point for rural health in each of the 50 states. And the small hospital Improvement Grant Program on Quality Improvement. And stabilizing finances. Startup funding for a Pilot Projects for Rural Communities. Community Health Centers are an essential component, they provide accessible, affordable and efficient care in underserved communities. Hersa has 1300 centers supported nationally, about 50 of those Service Sites serve Rural Communities. Hersa recently announced 164 new access point grants for new Community Centers. 74 of those are in Rural Communities, totaling about 45 million in investments that will go to improve access to care. Training programs also work to increase access to health care by ensuring there are providers in underserved areas. The National Service core for primary care providers, almost half of those providers that we support located in Rural Communities. Fy 2014, Health Profession students went to 11,000 training sites in Rural Communitieses. We also invest in Community Based rural Residency Training around the country. Telehealth extends the reach. Hersa is funding projects in 48 different clinical areas, this includes Mental Health, weve seen them pilot new initiatives. We also have 14 Telehealth Resource Centers around the country that provide free Technical Assistance communities to enhance what theyre doing in telehealth. Rural communities have benefited from the white house council. The councils focused on getting federal agencies and departments to Work Together to coordinate and serve Rural Communities better. I know in our case this has led to ongoing partnerships between my office, the u. S. Department of agriculture and the department of veteran affairs, one example of that, is that we expanded the National Service core to critical access hospitals. I want to thank you for the opportunity to be here today and thank you for your support of programs, and ill look forward to answering any questions you might have. Chairman blunt, Ranking Member murray, thank you for the invitation to discuss the center for medicare and medicaid for Quality Health care in rural areas. Providing high quality care to the quarter of all americans who live in rural area s presents unique challenges. Medical beneficiaries reside a significant distance from the health care provider. Making these organizations particularly sensitive to changes in medicare payment policy. At cms, weve taken a number of steps to improve Rural Services for Medicare Beneficiaries. Cms has rural healthco order naturers who meet monthly with Central Office staff and representatives from the hersa office at our Rural Health Policy. Cms also offers regular Rural Health Open Door forums. Answer questions and learn about emerging rural health issues. Were also trying to remove regulatory barriers for Rural Health Providers. Last year cms reformed medications, as unnecessary obsolete or burdensome. Which will save providers 2. 5 billion over the next five years. A key provision reduces the burden on critical access hospitals and fqhcs, by eliminating the requirement that the person be held to a prescriptive schedule for being on site. Physicians can provide care at lower costs while maintaining high quality care. Medicares telehealth would require the practitioner and patient to be in the same location. A variety of Health Care Providers pay for Office Visits and psychiatry services. Each year, cms for 2015, weve added the annual wellness visits, and prolonged e m services. Were exploring how we can improve the current telehealth benefit, the centers are testing Pilot Projects that use telemedicine to Bring Health Care to Rural Communities. A grant has been awarded to health link now. Serve patients with Chronic Behavior Health Conditions in wyoming, montana and washington sta state. This year we announce the aco model, that model will be tested Telehealth Services as well. Critical access hospitals are small rural facilities that may lack access to in patient care. Medicare reimburses cause rather than the rates set by the applicable Payment Systems. Theyre currently more than 1300 cogs in the united states. Here i pause and thank congress for extending the medicare dependent hospital program. The Rural Health Clinic Program Helps us increase the physicians and nonphysician practitioners serving patients in rural areas. Approximately 4,000 rhys are providing care in rural areas. And finally, the Innovation Center is uniquely positioned to improve access and quality of care for Rural Communitieses. The Innovation Center is designed to report entities, such as smaller access, help them get into the shared savings program, the aco investment model is a new model of prepaid shared savings that builds upon the experience of the advanced payment model cms recognizes the challenges faced. I look forward to working with hersa and congress to provide quality care to beneficiaries, regardless of their location. Let me ask a few questions. The department, the budget the administration submitted would have cut your budget by 20 million, did you ask for that c cut. We support the president s budget and the request came forward, we think it supports the key programs for our office, includes the Outreach Program for the Flexibility Program for our policy and research activities, and we think that those are the programs that could be most effective in meeting the needs. Where are you going to spend 20 million less than you are spending this year . The budget does have there is it that decrease. What programs are you going to decrease . Theres no request for the funding of the small hospital improvement program, and no request for the funding of the access to emergency devices program, in the case of these programs and the administrations requests. These are challenging budget times and they require some tough choices sometimes, i think the president s budget reflects a request that for the program, we think are really effective in meeting the need. We have the Flexibility Program, 25 million request for that. The program focuses on the most vulnerable hospitals in the center, the critical access hospitals, there will be 25 million requested to support Quality Improvement. Working in the flex programs in the states and activities many we this is a program that places automatic external defibrillaters. We think that the need has largely been met in that program, not only through federal funding but state and private sector funding. We do allow people to come in to get at the same issue, so an applicant could come in for outreach funding or Network Funding and do the same thing as the aed program, in the sense they could develop a program that seeks to purchase those defibrillaters. For the remaining need thats out there, it can be met through Outreach Program. The program that you would continue is a 25 Million Program . Yes, sir. Is that in the current year, youre spending 25 and proposing to spend another 25 next year . And then the 20 that you would have this year, for sim lar purposes would go away, in the president s budget . Yes, sir, the ship program, theres no request for that, it had been funded historically at 15 million, the other 5 million is for the request to emergency devices program. What obstacles do you see in telehealth, we have people telling us there are still issues theyre trying to work through with your department. What would you say are the top obstacles . One of the issues were trying to get at is the who issue of cross state license. You may have providers in one state providing services in another state. We currently have grants with the federation of state medical boards and what were trying to do with those grants is work with licensing boards so say a psychiatrist was practicing in missouri, but was providing services in another state, rather than having to complete two different applications they could adopt a common licensure, so it makes it easier for someone to practice across the state lines but protects patient safety. Thats one way were trying to get at it, the other thing weve found, weve been investing in telehealth for a number of years, i know it improves access to care. One of the challenges is finding out which applications have the best clinical outcomes. The base could be expanding. One of the things we did this past year is put money into an evidence based program, what were trying to understand is, how does the outcomes from using teleemergency care compare to when you have those Services Face to face. Thats a question any insurer would want to know about. The more we can learn about the evidence base, i think can it target us moving forward. May we move forward on that a little bit, maybe with the next panel senator murray . Im a strong supporter of workforce training programs. Other providers that agree to work in are rural underserved areas. I want to recognize your agencys Important Role in documenting workforce shortages, threw the National Center for workforce analysis. What are the current projections, what do the current projections say about our National Health Care Workforce shortage. Demand is expected to increase for primary Care Services through 2020, this is due to the fact that the population is aging, growing there are also impacts you referenced earlier in terms of more coverage and seeking more services. The National Center has done some projection work, what theyre projecting is that there will be a shortage of approximately 20,000 full time equivalent positions by 2020. Now, this is mitigated somewhat by if we were able to take advantage of Nurse Practitioners and p. A. s and use them to the full extent of their training. If that happens, the same thing for physician assistance, i think the shortage drops down to 6,000. What kind of Health Care Providers are needed in Rural Communities. I think the full spectrum, that includes primary care, and we see shortages in meantal health, and thats for everything from licensed clinical social workers to psychiatrists, psychiatry is not a service you often find in Rural Communities. Even in terms of the allied health workforce, and regular nursing and those are k45e6r7chs Rural Communities face. Tell me about how to address shortages like we have in rural washington. It would dramatically increase the funding for the National Service core. We found down to the level of funding thats available. The more funding thats available would allow us to fund more Rural Communities. Its been a lifeline for communities. 50 of the placements for the service core communities. How can we continue to leverage the teaching Health Centers program to make sure that residents stay in rural areas, is there anything we can learn from this program to attract other specialists . I think one of the big lessons is that you can do Residency Training. So much of our Residency Training takes place in large academic Health Centers, if we can get more folks exposed to Community Based training, the hope is, theyll be interested in that and well see them working in our small hospitals. I think the Teaching Staff shows our help forward training a new Grant Program to do Community Based training, we know also some of the work we do, which started in your state, this is a unique model where they do one year in an Academic Health center, and 70 of the graduate s end up practicing in Rural Communities. I think the evidence is strong well meet the needs better. I completely agree, ive seen this working in my state, where are you practicing and do your residency makes a difference on where you stay, and we have such a need in our Rural Communities, having those residence in the Rural Communities doing their residency, it works really well i hope we can continue to build on that. I thank you. Thank you for convening this hearing on the challenges were faci facing. We hope to learn from this hearing ways to provide the needed resources, up to the point where were authorized to do so. Its been brought to my attention that the Health Resources and services has released a grant notice to provide funding for Telehealth Research center. Could you tell us what that is, and what are you looking for in an applicant and what are the goals that would be funded by this cooperative agreement . I think this builds on the comment i made earlier, we again, need to find out what the impact of that is. We need to find out which applications work best and deliver the best outcomes, what were looking for are experienced researchers who can do comparative research. Heres the outcome, how does that compare to whether you had it face to face . And i think that would really inform the evidence base. Are you encouraged by the results of your applications and those who are betigsing the government to choose them . We have a lot of calls on this funding opportunity just in the week its been out there. I understand the centers for medicaid and7c Medicare Service respect reimbursement for telehealth based on geographic locations. How do you administer that, how do you choose which urban areas are more eligible than others . Thank you for the question, in the statute, it gives us instruction to allow telehealth to be provided in certain geographic areas, pleased that with help from our colleagues, a few years ago we changed our reges to expand the definition of rural areas, the geographic restrictions really originate in the statute the good news is, through the Innovation Center, were able to move beyond those barriers and test new models of telehealth without some of the other statutory restrictions, we have telehealth models being tested currently. Thank you very much. Senator more an. Thank you very much, thank you for you and senator murray having this hearing this important one with a senator from kansas, really for the country. Let me start with mr. Morris, tell me what statistics are there that demonstrate over a period of time how many rural hospitals are closing or being in addition to that are threatened to close, ive seen an ap story just in the last few days that 50 hospitals have close closed. The pace has been accelerating with more closures in the past two years. Ive seen the study from the North Carolina research agency, indicating 47 is the number of hospitals that have closed, do you consider those numbers accurate and what kind of study analysis do you have about cause . What can we pinpoint the cause for those closures and whats your expectation for the trends in the future . This is an issue weve been tracking and those numbers align with what weve found. Theyre one of our Rural Health Research centers, their work is very solid, i think that were trying to get a better handle on whats driving the closures, i dont think theres one single factor behind it. I think what it is it, its community specific sort of issue in some cases, the community has lost population, it may not have a volume to support a full Service Hospital its something were going to continue to study further, and the u. S. Of North Carolina Research Center will lead those efforts. Well be happy to share with you all those findings, we are looking at what happens in a community after a hospital closes. Doing some informal calling around to get a handle on this in some communities a hospital closes and another provider can step in maybe theyve expanded the clinic hours so theyre not just open 9 to 5, and the Community Seems largely okay with that, how it played out. In other cases, theres a gap when a hospital closes with the 34 hospitals that close since 2013, that is an uptick from the previous two years whats interesting is, the same number of hospitals closed in urban areas. When a hospital closes in a rural area, its different than when it closes in an urban area. Well work with our colleagues to better understand it, and see what other resources can be brought to bear. Id be interested in knowing the Research Outcome in what happens to a community following a hospital closure, i would encourage for that research, for research to be conducted that would indicate what steps could we have taken to have prevented the closure in the first place im certain in most instances, the research will demonstrate situations pretty dire to a community and to patients, i thought we ought to be more prospective, how do we avoid this . I agree with you, its not one thing. The population is maybe something we cant control here, certainly with the Regulatory Environment the cost structure is important to those officials. The reimbursement rate, on that topic, i wanted to ask you about the idea of cost rate reimbursement. When we say were reimbursing cost, what does that mean in the real world. We create this misperception that a critical access hospital is getting more than what it costs them to operate. Is there analysis . Can you quantify whats going on in a hospital when we tell them or when we tell the public that your hospitals getting 101 of costs when its really reimbursable costs . Thats a complicated question. What does historical costs feed into it does vary from state to state, but i would be happy to get back with you and your staff, we can connect with you can you confirm for the record you talk about reimbursing a hospital, their costs, theyre receiving something something significantly less than the cost of operating a hospital. Its hard to say that nationally, its different it might be different for kansas than it is for alabama, and as you know, how structures cost is a science on to itself, im happy to get back to you on more of that. What weve done with investments in the flex program, were focusing on making sure the hospitals are not required to report their data. If they can do that, pench mark their quality, they can give back more to their community. We have an example in tallahassee, mississippi, where were able to send consultants in there, and improve their financial bottom line, within the finances we have in there, were keenly away of our flex program, we can begin to get at that, we want to do all we can to stabilize folks so were not in a closure situation. Very few are able to survive in the absence of a tax levee to support the hospital. Thank you, senator moran. I want to thank the panel, i would like to ask a question to mr. Carvin awe, in your testimony you talked about the new initiative, which is pairing telemedicine and telepsychiatry, this program is being tried in three states, i was wondering what measurable data the Pilot Program is showing you. And what are the prospects of expanding this to other Rural Communities. Theres a shortage of rural Health Professionals everywhere. I was at the center for medicare and Medicaid Innovation. There were quite a few telehealth and telemedicine proposals, i was surprised at the number that had a link to Behavioral Health. We have some early evaluations of those, theyre very qualitative, case studies of how theyve faired in standing up the program. We hope in the next year to have some quantitative data. The statute set up the Innovation Center and said, these models can be tested if they meet Quality Improvement standards, we intensively stan qaq models. Tensively we hope in the next year to have quantitative results. Many of the Innovations Center models are being tested at large scale. Some of them are being tested at smaller scale, this would be one thats at smaller scale, even if we get promising data, i dont think the next step would be to go national with it. Were hopeful to have data public soon. Thank you. One of the obstacles that i think all of us who live in rural states are combating every day is the lack of high speed Rural Broadband access. And certainly thats got to be impacting telehealth into the rural Health Initiatives is this a problem youve develop ed. It affects what communities they can test these models in. We dont feel we have the tools to help with that. We rise it as a barrier. I think whether its telehealth or other technology. I think broadband is going to be a challenge to that. In talking with our hospitals, emergency room physicians, talking with the anesthesiologies the other day. One of the things thats cropping up now is the lack of seatal number of residencies, there are several hundred graduates of medical schools who dont match and dont get a residency, and that obviously stalls out their professional career they have Student Loans and all sorts of other issues. I think we should be looking at rural health as a way to expand the availability of residencies to fill this gap. I know you talked about residencies in your opening statement. We recognize the challenge youve laid out. One of the 24i7ks we looked at years ago, was to expand these rural training tracks. That number had been fairly static over the years, and now theyre about 34. Weve increased the number of rural training tracks. Whats unique is that although theres a cap on the total number of medical residencies that can be supported theres flexibility under that cap. Theres opportunity to create rural residencies and work with our partners at cms through that flexibility we know this is an evidence based model. It works, and weve seen some real successes from it. I would be supportive of any kind of way to meet, to solve this could help solve more than one problem here if we were able to expand that news wisely. Those of us who live in Rural America are always frustrated that its assumed by the more urban areas its cheaper to deliver medical services in rural area, typically wages are lower, you have workforce shortages, you have travel times, all kinds of other issues, its frustrating for us, i think, to make the case were always having to make the case, youre in this too. And so i applaud your efforts in helping us deliver the message, all of the Health Care Dollars need to be allocated. Its not as easy as some in the urban areas think it is. Thank you. Dr. Cassidy. I was looking down but listening, one of you pointed out the cause for closures multifactorial. I accept that. The only Business Model thats going to work in a rural setting is volume. You dont have the Critical Mass of capitated patients. I say this because we passed an sgr bill that promoted alternative models. With the implication that volume decreases, is one of the factors in this multifak toral problem, that the Business Model can only survive with certain business volumes. The push is away from volume and more toward quality. Have you run models on that, do you have studies im wondering if theres any hope for the hospitals. Be it through a tax base or some federal legislation i think senator, youre putting your finger on a very important challenge which is, as you say, how do Rural Health Providers not just thrive but survive. I think theres multiple ways this can happen. One is let me ask before you go forward, i have a specific question, do you have studies showing the effect of an accountable coordination on a capitated basis . Receiving their preponderance of care at this institution. Is there such a study looking at whether this model will work . We are pleased to say theres been a lot of skepticism. In the shared savings program, we have 15 we have about 7. 3 million aligned for acos, about 17 of those are living in Rural America. You live in Rural America, but still get your health care at geysinger. And so it wouldnt be that you had a local hospital, it could be you are linked with an urban hospital. You know, something such as that. Are these in the rural hospitals . What is the health of the rural hospitals in those settings in which you just described. You make a good point, the beneficiaries are aligned with primary care, not where they get their emergency care. You make a good point, you could live in a rural area and be in an aco that has a urban presence. There are those that are strictly in rural areas. Theres one aco that is combining Rural Communities across the country. I think its important to know acos. I have limited time, im trying to focus. What is the health of the rural hospitals in those areas in which theres an aco which governs which has responsibility, if you will, for the rural patient . Because this is about hospitals. If we have an would actually be starving the rural hospital. I dont have the data that youre requesting. We can certainly go back and see if its something we can compile for you. Okay. Okay. Continue, then. Because that was kind of the point you. Had another point. Im sorry i interrupted. So continue. I just want to make the broader point, senator, that we have heard from a lot of rural providers that they are excited about the prospects of getting into new payment models because they do find fee for Service Payments frustrating. They think theyre efficient providers in many cases, probably are. We do have one large initiative out of the Innovation Center called transforming clinical practice. And this is where were going to help small practices. Not the hospitals necessarily, but small physician practices. Give them Technical Assistance so they can develop the infrastructure and the knowledge to in that, ill just go back to this. Because its the hub is what matters here. If the hub is a rural hospital and that could potentially help, although under valuebased purchasing, youre still going to be emphasizing keeping people out of the hospital. And i dont see you tell me. Is there a Business Model that works for a small rural hospital that is not volumebased . I can see it working for the primary care providers, but i dont see one working for a rural hospital. If youre looking for that, our best hope is probably the Accountable Care organization with the aco being a primary player in that. And as i mentioned in my testimony, weve got two different programs to help rural hospitals. We provide them seed capital to help them form an aco and get into the shared savings program. Its very early both in the aco program and in these models that were running. Im sorry. So in that model, what is the im sorry. Im going a little bit long. Can i have it . What is the minimum number of patients you would need in order for that rural aco to work . So the aco it doesnt change the minimum number in the basic program, which is 5,000 alined medicare patients. Now that would be for primary care provider. But 5,000 patients would not support a rural hospital with a ct scan and o. R. , et cetera. The minimum number required to maintain a certain x number of hospital beds . Im sorry. I should have been clear. 5,000 is the minimum to get into the aco program, the shared savings program. Youre asking from an actuarial standpoint do we have some sense of what aligned lives would be needed. I dont know the answer. I tell you, we cannot make wise decisions regarding Public Policy unless you have those numbers. Because ultimately, they got to make money. And unless you can give us some data that this there is a Business Model that works on an alternative payment model, were wasting our time. And i say that not to scold. Im swaying have to make decision. We would ask yall to come back with that, if i can ask the indulgence of my chair and Ranking Member. I yield back. Thank you. Thank you, senator. Anybody have a followup question . We maybe have time for one or two other questions if anybody has one. Mr. Morris, in response to senator morans question, you believe there are states that reimburse the total cost of a critical access hospitals operation . No, sir. What i was saying is that because and sean can correct me if i get any of this wrong. You know, when you set the cost based reimbursement rate, its based on historical costs. And we just see some fluctuations from state to state in what that initial base is. But its more complicated than that. And i can get back to you with more information on it. I think we expect you to get back to us on that. Okay. But i think the point is well made that these rural hospitals are not in the profitmaking business, even if they get 100 101 of the allowable reimbursement. But there are states that have a formula that allows that, well be anxious to see which states are doing that and how they figured out how to calculate everything that is spent by the hospital to operate into their cost basis. And to respond to mr. Cassidys question too, i would say that we do have examples of hospitals even with low volumes that have been able to make it work. I think it really is situationally dependent. There is a base level of volume you need. I agree with that. But weve got some Success Stories out there where folks have been able to bring primary care and align the physicians and the hospitals in a way, figure out what lines of service they can get into that makes sense for that community, arrange relationships with upstream providers that make it work. So what we would like to do is use our funding to sort of be the connecting of the dots between that, identify those models, and maybe replicate them in other communities. All right. Mr. Cavanaugh . Yes, go ahead. Thank you, mr. Chairman, and thank you for helping me ask my question, and i appreciate the answer. This is a Home Health Care question. Some of our hospitals, more fewer than used to provide home health Care Services because they cant afford to. But the Affordable Care act includes a provision that requires Medicare Beneficiaries to have a facetoface encounter with a physician who certifies the need for that home health Care Services. The implementation of this facetoface requirement raises lots of concerns with Home Health Care provider, hospitalbased or otherwise. And the documentation that is necessary, it sure seems to the providers as unclear. And the backlog of audits is increasing. There is a real uncertainty as to what the cms standard is for providing satisfactory facetoface encounter. Most of the appeals have been overturned in favor of the Home Health Care provider. But my question is do you see this as a problem . Does cms have a plan to respond to clear up the confusion, provide certainty and reduce the backlog . Yes, senator. I think you have put your finger on a challenge that weve been taking on headon. The first thing is in rule making last year, we simplified youre correct that the Affordable Care act created the facetoface standard. Our initial rule making in addition required a narrative from the physician, a narrative writing, which providers found ambiguous. So we withdrew that requirement. So we still have the facetoface requirement, but not the requirement for a narrative description of the need. We continue to have dialogue with the Home Health Industry to make sure they understand what were looking for. We are exploring afters personally, im very interested in finding a way to facilitate people making the documentation. As you say, there are a lot of auditor reviews to these. Some get overturned, but many are upheld. Even when theyre upheld, its often about the documentation and not about whether the service was needed, whether it was provided. I mean, granted there is fraud. But im not talking about that. Im talking about a lot of services that were truly needed, truly provided but poorly documented. And im trying to find fought there is anything the agency, any role we can play to facilitate that without facilitating bad behavior by a subset of the industry. Thank you for that answer. I appreciate your attitude and approach toward attempting to solve this. And it is finding that place in which you dont punish those who are doing the right thing. And you do punish or prevent those who do bad things. Mr. Chairman, thank you. Thank you, and thank you to the panel. Im sure well have some questions submitted in writing as well. I appreciate your time today. And now well move to the second panel. And as the second panel is coming up, that Panel Includes tim wolters, the director of reimbursement at citizens Memorial Hospital in bolivar, missouri. And he is also a reimbursement specialist at the Lake Regional Health system at osage beach, missouri. Dr. Kristi henderson, chief telehealth and innovation officer at university of mississippi Medical Center in jackson, mississippi. Ms. Julie peterson, the cmo of pmh Medical Center in prosser, washington. And mr. George stover, the ceo of rice county hospital district in lyons, kansas. So thank you all for being here. Mr. Wolters, if you want to start with your testimony, well go right down the line, then. Thank you, chairman blanche, member murray, first the chance to discuss current challenges. 50 rural hospitals have closed since january 2010. Rural hospital closure means more than just the loss of access to health care for a community. As a rural hospital is frequently the largest employer in town, its closure represents an economic blow as well. My written testimony provides several examples of what is working in rural hospitals, including Quality Health care at a reasonable price to the medicare program, and programs like the medical home program which improves the health in our communities. I want to focus my oral comments, though, on four specific challenges rural hospitals face. First, patient volumes are lower at rural hospitals, and also fluctuate significantly on a daytoday basis, making it difficult to manage staffing levels. My written testimony has a graph on page three that shows the daily census at lake regional for the month of january showing significant daily fluctuations, including a high census of 103 patients on january 15th and a low of 66 patients on january 25th. A significant fluctuation. Second, medicalization is significantly higher at rural hospitals than urban hospitals. Page 4 shows urban hospitals average only 30 utilization compared to 42. 5 at rural hospitals. The challenge of such high medicalization is medicare cuts represent a higher percent of our budget. And we have less commercial and managed care volume to subsidize the medicare losses. The third challenge is the cumulative impact of medicare cuts. The graph on page 5 compares estimates using cms data of hospital costs versus payments from 2011 through 2023. The poptop line represents the costs and bottom line payments factoring in productivity and fixed cuts under the Affordable Care act and the sequestration cut under the budget control act. The difference between the lines represents medicares lost reimbursements, and it grows annually exceeding 17 by 2023. The cumulative impact of these cuts over this time period from my two hospitals is estimated to be about 120 million. Beyond all of the cuts weve been facing, recovery of a contractor or rac program is draining our resources. Lake regional currently has over 500 medicare claims worth about 3. 5 million in medicare reimbursement. The final challenge we face is the increasingly complex Regulatory Environment in which we operate. Page 7 shows six different medicare perspective Payment Systems and six different medicare fee schedules we must manage with each of these systems changing on a regular basis, including changes to the midnight rule that ms implemented in 2013. Also, we understand the reason for the change to icd10 this fall, and weve been training extensively for the conversion. But this is one more significant change in our operations that we must implement with scarce funds available. Both my hospitals were early adopters of Electronic Health records and have achieved stage 2 status. However, meaningful use funding nearing an end and the requirements continuing to increase, this is also become an Administrative Burden for us to keep up with the changes that cms implements. In conclusion, with 50 rural hospitals closing since january 2010, Congress Must act to prevent further erosion of health care in Rural Communities. We appreciate congressional action to protect the funding we receive. For example, hr2 eliminates the annual threat of a significant reduction in the medicare fee schedule. It also provides a 30month extension in the medicare low volume and medicaredent programs and extends the Home Health Care addones. For rural pps hospitals to survive, Congress Must continue to support these programs, in fact making them permanent. Likewise, rural hospitals should be exempted from a sequestration and future medicare cuts. We also need continuous support for programs like the 340b drug discount program, a lifeline for cms, which also saves money for the state and the federal government. Finally, grant fund shotgun be made available for rural hospitals to assist with the transition to icd10 and the larger conversion to future care delivery in future models. Thank you for the opportunity to present this testimony today, and i look forward to answering questions you may have. Thank you, mr. Wolters. Dr. Anderson . Chairman cochran, chairman blunt, Ranking Member murray and distinguished members of the subcommittee, its my pleasure to join you today to discuss how telehealth is improving health care in Rural Communities. My name is Kristi Henderson and im a Nurse Practitioner and serve at the university of mississippi Medical Center in jackson. Mississippi ranks at the bottom for overall health, obesity, heart disease, diabetes, and preventible hospitalizations. More than half of mississippis three million citizens live in a rural community, and almost a quarter live at or below the federal poverty level. Twothirds of mississippis hospitals are located in rural areas and lack sufficient resources in specialty care. But despite these facts, telehealth in our state is increasing access to health care and improving outcomes and lowering costs. The ummc center for telehealth began in 2003 with the teleemergency program connecting critical access emergency to departments to physicians at our trauma center. 12 years later, telehealth allow us to provide over 35 medical specialties to 166 sites around the state, including Community Hospitals and clinics, Mental Health facilities, schools and colleges, corporations, prisons, and even in the patients homes. We connect sites in 52 of the states 82 counties and serve an average of 8,000 patients a month. Since 2003, we have been awarded over 9. 7 million in federal grants to purchase devices, conduct workforce training, and enable the technology that we use to serve patients daily. This early funding allowed us to test Delivery Systems, areas of practice, and Service Locations in order to craft an effective and impactful model worth replicating. Without early critical support from usda, hrsa, fdc and others, our network would have been very slow to deploy, taking the longest to reach those with the most need. Today our system is completely selfsustaining. A critical factor to our continued sustainability is the reimbursement parity available in mississippi. Prior to 2013, Insurance Companies in mississippi did not reimburse for Telehealth Services. We argued that mississippi would ultimately save money if they did, and undertook a series of Pilot Projects to prove it. We were successful. In 2013 and 2014, governor bryant signed legislation mandating that health Insurance Companies reimburse for Telehealth Services at the same rate as inperson services. These policies changes were the catalyst for the rapid growth of our system. While increased reimbursement may cost more in the shortterm, years of data from our state and numerous others prove that the cost savings achieved through better chronic disease management, fewer er visits, and aggressive Preventative Care far outweigh the expenditures. Given the success we have seen in mississippi, i can only imagine the exponential impact of offering similar federal parity for Mental Health. I commend cms for opening new code sections for reimbursement and hope the committee will encourage them to expand coverage for more services in more communities, be they rural or urban. Without reliable connectivity, we cannot serve rural patients. Thanks to support from universal Service Funds and our Telecom Partners we are able to bring much needed health care to rural mississippi. It is this connectivity enabling remote patient monitoring in the home that is changing lives in ruralville, mississippi. Last fall we launched a Research Pilot aimed at managing 200 uncontrolled diabetics through aggressive inhome monitoring and intervention. Once enrolled, patients are sent home with an electronic tablet that monitors glucose readings daily, provides educational information, and transmits health data to specialists monitoring them hundreds of miles away. For the first time these patients have access to a medical Team Dedicated to their care, ophthalmologist, endocrinologists, pharmacists, nutritionists, Diabetic Care and nurses. Preliminary results show that the majority of patients have already met or exceeded the goals that were set for the end of the study. With one exception, none of our patients have gone to the er or been admitted to the hospital for their diabetes. The results are improved care at a reduced cost. So we look forward to working with the committee and would like you to consider these few points. The need to test reimbursement parity at the federal level, particularly for remote patient applications. The only way for us to know if the success of pilots like ours can be replicated at the federal level is to test it. Now is the time for cms to pilot new reimbursement parity models for telehealth, especially were inhome monitoring impact is the greatest. The continuing need for support for telehealth. While our network has become selfsustaining, it will not be complete until we reach every mississippian. The need for federal funding remains, and efforts to coordinate opportunities across the agencies should be encouraged. The need to remove geographic barriers for reimbursement. Rural or urban, telehealth is a powerful tool in improving access to care and should be incentivized. We recommend that geographic restrictions for cms reimbursement be removed. And then lastly, the need for continued support for universal Service Funds. A reduction in any of the usf fund willing not only impact current operations, but will significantly hinder our efforts to offer remote patient monitoring in Rural Communities. Fund shotgun be protected. Our mission is to increase access to health care and improve outcomes and reduce costs. Telehealth allows that to happen. I thank the subcommittee or to the opportunity to testify today and look forward the answering your questions. Thank you. Thank you, dr. Henderson. Ms. Peterson . Chairman blunt, Ranking Member murray and members of the subcommittee, thank you for the invitation to testify today. My name is julie peterson, and im the administrator of pmh Medical Center, a critical access hospital located in prosser, washington, a community of about 6,000 people. Pmh is organized as a Public Hospital district, and we serve about 68,000 rural residents in two counties and five small towns. The mission of rural Health Care Providers like pmh is to ensure access to high quality, Affordable Care for populations that are challenged disproportionately by distance, poverty, age, chronic conditions, and cultural barriers. Many of our patients do not have reliable transportation, paid sick leave, and the other resources that allow them to travel to receive care outside of their communities. In short, Rural Communities are older, sicker, have poor health status, and face significant economic challenges. Its never been easy to provide access to high quality care in these communities, and its more difficult today than ever before. As is the case with most Rural Communities and hospitals, pmh is more than just a hospital. We are the backbone of the community Health System. What you may think of as traditional hospital activity makes up just slightly more than a quarter of our business today. In my written testimony, i included an extensive list of the nonhospital services that we provide. Everything from primary care to our 911 ems service. We are a fully integrated Delivery System dedicated to meeting the health needs of our community in a coordinated way. But the current reimbursement system does not recognize that reality. Reimbursement is siloed, and there are as many ways as we get paid as there are services we provide. This makes sustaining a coordinated Health System for our community very difficult. For example, i need to be moving forward to create medical homes for my residents. I need to be integrating Behavioral Health and medical health in my Rural Health Clinics. But there are so many reimbursement variables that i cannot assure my board that we can sustain these programs. The current fragmented Financial System destabilizes rural health. Another challenge we face is that many people in our area remain uninsured. Thats despite the fact that our state had a very successful Medicaid Expansion program. We provide coverage to 535,000 additional washingtonians through expanded medicaid and the Health Insurance exchange enrolled another 170,000 washingtonians. These efforts need to continue. Rural communities also face greater shortages of Health Care Professionals than their urban counterparts. As the ceo, physician recruitment is a constant activity for me. I have an aging workforce, and our doctors are still required in many cases to participate in call, which is not the case in urban areas. So they work very, very long hours, and they see far more complex cases in the clinic setting. Programs like the National Health service core and the nurse training initiatives enable many communities like mine to attract the providers that they need. These challenges our unique population, the fragmented population and work financial shortages make it very difficult for Rural Health Care facilities to survive. We need flexibility. In washington, as senator murray pointed out, weve identified about ten very small critical access hospitals that might be facing eminent closure. That awareness has led the association, the department of health, the state office of rural health and others to begin seeking new Delivery System models. Our goal in washington is to develop and test one of these new models within the next 12 to 18 months that is a very ambitious timeline, but it is justified in view of the plight of some of these smallest facilities. One invaluable tool in this effort is the cmmi grant that provides 65 million to the state for the healthier Washington Initiative. We also have two rural hospital collaboratives that are funded in part through hrsa grants that are working with critical access hospitals and rural clinics to pioneer Rural Network development and outreach. The federal office of Rural Health Policy and the Washington Office of rural health have been generous partners in these efforts. We will need continued help from these officers and from cms if we are to succeed. Finally, id like to take a moment to brag a little bit about the leadership shown by all of our washington hospitals in advancing quality of care and patient safety. The centerpiece of this effort was an 18 million grant that funded our hospital associations participation in the hospital engagement network. This quality and Safety Improvement work, this 18 million grant, has generated 235 million in Health Care Savings through a reduced readmissions, fewer hospital acquired conditions, and healthier babies. Thats just one example of how our rural hospitals are preparing for a future where measuring quality, efficiency, and service will be essential. We are ready to demonstrate our value to partner hospitals, health plans, and to our patients. Rural providers are dedicated to ensuring that the people who live in Rural Communities have access to the highest quality of Affordable Medical care. Im optimistic that we can achieve this goal. The programs that were discussing at this hearing today are valuable tools on that journey. Thank you. Thank you, ms. Peterson. Mr. Stover . Mr. Chairman and members of the committee, thank you for the opportunity to speak to you today. My name is george stover, and i serve as the chief executive officer of hospital district number one of rice county in lyons county. Lyons has a population of 3800. Our community hospital, which first opened in 1959 is a 25bed critical access hospital that employees approximately 150 individuals. Rural Community Hospitals have a long and distinguished commitment of providing care for all who seek it, 24 7, 365. More than 36 of all kansans live in rural areas, and depend on a local hospital serving their community. Rural hospitals face a unique set of challenges because of the remote geographic location, small size, scarce workforce, physician shortages, higher percentage of medicare and medicaid patients, and a constrained Financial Resources that limited access to capital. These challenges alone would make it difficult for many rural hospitals to survive. However, one disturbing challenge that is becoming ever ever creasingly ever increasingly more prevalent is the added regulatory burdens that are being placed upon Health Care Providers. More specifically, i would like to briefly touch upon the challenges related to the medicare policy on direct supervision of Outpatient Therapeutic Services and the 96hour physician certification requirement. In 2009, the center for medicare and Medicaid Services issued a new policy for direct supervision of Outpatient Therapeutic Services that hospitals and physicians recognized as burdensome and unnecessary policy change. In essence, the new policy requires that a supervising physician be physically present and in the department at all times when Medicare Beneficiaries receive Outpatient Therapeutic Services. As a result, many hospitals have found themselves at increased risk for unwarranted actions. While the congressional action last year to delay enactment was applaud by rural hospitals like mine, the protections afforded it under the legislation expired at the end of 2014. Rural hospitals are again at risk for exposure unless Congress Takes action. The 96hour physician certification requirement relates to the medicare conditions of participation on the length of stay for critical access hospitals. The current medicare condition of participation requires critical access hospitals to provide acute inpatient care for a period that does not exceed on an annual average basis 96 hours per patient. In contrast, the medicare condition of payment for critical access hospitals requires a physician to certify that a beneficiary may reasonably be expected to be discharged within 96 hours after admission to the critical access hospital. As a rural hospital administrator, the discrepancies between the conditions of participation and the conditions of payment have caused confusion and challenges. Equally troubling, the president s fiscal year 2016 Budget Proposal calls for critical access hospitals reimbursement to be reduced from 101 to 100 of allowable costs. This reduction, which would be on top of the 2 reduction associated with sequestration, would effectively eliminate any opportunity for a positive financial margin. Further, the recent consideration by congress on the trade Promotion Authority bill that extends sequestration cuts on medicare providers potentially exacerbates our financial challenges. Toward that end, a recent analysis within our state showed that 69 of rural kansas Community Hospitals had a negative medicare margin. The average rural medicare margin was a negative 9. 3 . As a result of this trend and the fact that many rural hospitals serve a higher percentage of Medicare Beneficiaries, many rural Community Hospitals in kansas must seek some form of direct tax support from their local communities. In summary, it is critically important that our Rural Communities across the nation are able to access Quality Health Care Services. Therefore, steps should be taken to minimize the regulatory burdens that are placed on rural Health Care Providers. I strongly encourage this subcommittee to support solutions that address the aforementioned issues. Thank you again for the opportunity to be appear before you. And i would be happy to stand for any questions. Thank you. Thank you, mr. Stover. I think ill go last this time. So the order would be senator murray, senator cochran, senator moran. Senator murray . Thank you very much, mr. Chairman. Thank you very much to all of our panelists. I really appreciate all of you participating today. Ms. Peterson, im really excited to hear about the Delivery System reform work under way. And im proud that our hospitals have been recognized as National Leaders in increasing the quality and safety of care. Im particularly excited about the recent grant from the centers for medicare and Medicaid Innovation you mentioned in your testimony to support the healthy Washington Initiative efforts to improve care statewide that will reduce costs and stabilize some of our rural hospitals. What have you found to be the most significant barriers to integrating care in the first year of this effort . At this point, and youre right, it is very exciting what is going on in the state of washington, i would go back to that fragmented reimbursement system. Not only are the incentives different based on what line of service youre providing, but as my colleague mentioned about the racs and the amount of time it takes to reimburse some of these systems, its years out before we know what our true Financial Condition really is. So i would call out that fragmented reimbursement system. But we also need current early relevant data to move forward with when we talk about valuebased purchasing and population health. So i would say stability in reimbursement is one of the barriers. And the other is just a true reliable database for rural residents. Okay. And talk to us about some of the specific reforms that we can expect to be seen implemented in the first year of this. Well, what i would expect to see is this continued Movement Towards valuebased purchasing and defining quality. And, again, i think Washington State has done an excellent job of doing that. And led by the Washington State hospital association, all of the hospitals in washington are participating in reporting their quality data. So the rurals are right in there. I would expect that thats going to continue to happen. What i would like to see is more focus on what is relevant in Rural Communities. When we report in to hospital to compare, too frequently that grid of data has gaps for our rural facilities because were not measuring those things that are occurring and really contributing towards quality outcomes and reduced costs in rural hospitals. Such as . You know, our hospital acquired conditions, our ability to reduce readmissions from our Emergency Department and our in patients. One of the grants that you mentioned, the Community Paramedic program is actually hosted by my hospital, and its been a tremendous success taking our ems resources out into the community to see people after theyve been discharged. Make sure that theyre following their discharge instructions, getting their prescriptions filled, and that they have made that primary care followup. So those are some of the things id like. Weve had chance to talk than, but its fascinating to me that just that human touch on somebody, making sure they take their medication or follow what was told to them when they left the hospital reduces costs in the long run. It does. And theyre in their own home where they can think through their questions. We also get a look at the home and the environment theyve been discharged into make sure its safe and appropriate. Its a great program. Im really looking forward to more on that. One last question. What more can cms do to help Rural Communities make greater use of telemedicine . Well, telemedicine in the context we usually talk about is a direct link between the patient and a provider in a remote location, or a patient talking to someone at an academic Medical Center. And our facility, we also use telemedicine to support our local providers. So they can have that consult discussion with somebody at the university of washington or someone at swedish. Cms right now, and i think mr. Cavanaugh answered some questions about the metropolitan statistical area restrictions that we have. Thats a very antiquated assumption that if you increase telemedicine, youre going increase costs. In fact, youre going to take that very scarce workforce that we have in Rural America, and youre going to be able to extend it. It will be more efficient. And youll create access in our communities. Okay. Very good. Thank you very much for being here and your testimony. I appreciate it. Thanks, mr. Chairman. Thank you. Senator cochran . Mr. Chairman, dr. Henderson, you mentioned in your testimony that the reimbursement parity issue was an important factor in the growth of services that are rendered through television and Telehealth Services. The diabetes Pilot Project you described a real are really remarkable. And obviously i like the potential for significant cost savings if they could be expanded into communities across the country. What do you see as the programs that could be expanded . Are we talking about the diabetes Pilot Project . Is that a possibility to serve more communities . Yes. So we can expand the Diabetes Program to other geographic regions, but we can also expand it to other chronic diseases. And that program in particular is a Remote Patient Monitoring Program where were helping day to day with patients in their home manage their disease and keep them healthy. And using the resources that are in that community more efficiently. But from telehealth perspective, it really is about connecting and coordinating all the care team. Its not just a physician service. Its a nursing one. Its interpreters. Its case managers. Its patient navigators. Once you have this infrastructure and connectivity, you can connect any of those resources to bring what would only be at an academic Medical Center to a rural community. Thank you for your leadership. We think we benefit from these experiences that youve described for us today. And i hope we can help achieve those goals of expansion and improved access for less costs. Yes, thank you. Mr. Moran . Mr. Chairman, again, thank you very much for conducting this hearing. And i appreciate our witnesses. Thank you for what you do in your communities to make certain that citizens, patients are well cared for. Let me start with the kansan. Mr. Stover, welcome to our nations capitol. Thank you for coming from kansas to testify. I want to go back to what i was trying to raise with the Previous Panel about actual costbased reimbursement. Can you give us an idea of even though presumably you receive 101 of costs, what really what percentage of your actual costs are covered by that reimbursement . How do you make this work, even though presumably the image is that youre getting 100 of your cost . Our medicare volume is about 63 . We are a taxing entity. We are able to appropriate tax funds from our district, which is about 900,000, whats interesting with that number, in our fiscal year ending in 2014, we ended up having to write off nearly 800,000 to medicare bad debt. So that essentially washes itself out. When it comes to the cost base, youre absolutely right. Our reimbursement of 101 does not equate to our total cost of providing the health care within our facility. I would not knowing that number off the top of my head exactly, but i would say its probably around the 75 to 80 margin, which covers our costs. So we have to look towards our local tax base to make up that difference or otherwise start looking at reduction of services which we do not want to do. It used to be that hospitals would tell me that that mix, that 70 some medicare medicaid, you suppose you do everything you can to cost shift those to those who have private insurance. But are those opportunities available now as is it better to have a medicare patient and private pay patient and medicaid patient as far as revenue . How do you compensate for less than actual reimbursement of cost. Where do you make up that money other than taxes . Can you do it with private pay . We work towards our uninsured, our private pay in their struggles but, no, it doesnt come towards are you pleased when a blue cross and blue shield covered patient walks in your door . Does that mean this is a better deal than in it was medicaid or medicare . We look forward to the Blue Cross Blue Shield patient coming to our facility. The percentage of those who come in the door is a small percentage. A very small percentage, yes, sir. You mentioned uninsured and having to write off costs, im not trying to portray this in partisan or the way the issue is looked around here too often, but under the Affordable Care act, a theory is there would be more people insured. Has that proven to be true in light of what you just said about hoping that the private insurance covered patient walks in the door . We have seen a small increase of those individuals that are once uninsured. We funded them to be enrolled am medicaid in our state based nco program that we have. We have seen a small increase in the marketplace of those that once did not have insurance but otherwise found it on the marketplace. But when you look at the overall, that is a very small percentage of those individuals. They still find themselves uninsured. Some hospital administrators have told me that even with additional insured, that the copatients and deductibles are higher and the bad debt expense has increased. The way i described this is, somebody who had a 100 copayment could come up with 100 but if its a 5,000 copayment, they cant do that so you end up writing off more even though there might be a slight increase in insured . Thats correct, were finding that even though the copays in the past have been lower, were find being the copays now are on a payment plan and and in turn sometimes we have to write those off. Let me ask a broader question. I just like to have the summary of the cost associated with telemedicine and how they are paid for. As i was listening to your testimony, i jotted down three things i think that the hospital would have to pay for, the equipment, im interested if you could just im sure youve told this in your testimony but i would like to get this in a short summary so that i can understand it. You have to figure out how to pay for the equipment. And finally how does the provider get reimbursed for providing the service . My question there is, when the university of kansas Medical Center in kansas city provides telehealth to the rice County District number one hospital, is there a reimbursement to the physician who is present in kansas city at the Major Hospital and is there any reimbursement that then comes to the hospital thats providing the service at the other end . I dont know who is the person to answer that question. Your points are absolutely correct. How were doing it in our state, our center for telehealth is providing all of the equipment. Thanks to the federal funding dollars im able to employ that. That is not an up front capital cost. Would that be true generally across the country that there are grants available for the equipment . The majority of all of these programs have started off with grant money. In our state were able to pay the provider who provides the service, they are paid through reimbursement here youre talking about the provider in the rural setting . Im talking about the other side. Right. So where the patient is there can be a facility fee billed and that can be reimbursed as well and that helps offset their cost for facilitating that interaction. Typically its not a provider to provider because both providers cannot be paid for the same service. If you have a generalist with a specialist and they both do an exam, then they both can bill. You have a general practice physician at rice County District hospital one and specialist, both of them can bill . If they are doing different services, yes. So there is no disincentive to a provider to make this happen . As long as youre in a state that allows parity reimbursement. All right, ill have to figure that out. Finally, let me clarify, for me, when we talk about that reimbursement, does it matter whos providing medicaid versus medicare ver vus private insurance . Is the answer the same in all three settings . Its not. And it depends on your state and what the legislation allows for, and medicare has geographic restrictions as well. In our state, all public and private players have a parity reimbursement. Do you want me to stop or ask one more . [ indistinct comment ] so, mr. Stover or mr mr. Walters, how does it work in missouri, as far as medicare versus medicaid, versus private pay for telehealth, or mr. Stover, how does it work in our state . I can answer that. We invested heavily in telehealth. The geographic restrictions are such that we have a network of 12 Rural Health Clinics we operate. They are rural, for the purpose of being rural clinics under the medicare program. Four of those are considered urban for telehealth. The patient is in that Rural Health Clinic and they are not covered by medicare and cannot access Telehealth Services. We also have six longterm care facilities that we operate. Two of those six are in urban locations. So there are times when the patient have an event going on at the longterm care facility. Wed like the doctor to see that patient. But if its an urban facility, they cannot use telehealth under the medicare program. So we essentially would have to transport the patient by ambulance to the e. R. To access care that probably could have been provided by telehealth except for the fact that medicare defines that as a urban facility. From a reimbursement of cost to the Medicare Trust fund, that doesnt make sense, right . No, sir. Chairman, thank you. You used all of your time. And all of my time. Missouri and kansas cooperating. Exactly. You mentioned you had a health tax provided about 900,000 a year, but you lost 800,000 in medicare bad debt, is that what you said, medicare bad debt . Yes, sir. How would you have medicare im sure everybody at the panel understands that, but i dont. How would you have medicare bad debt . Its the bad debt that we recognize on our medicare cost report. Oh, okay. Its not bad debt that the medicare system owes you thats correct. And in your reporting to medicare, youre reporting, you have 800,000 of bad debt. Thats correct. I see. Thats helpful to me to understand that. Mr. Walters, i saw theres a ap story out in kt wmu story out today on harvard study that indicates that of the 195 hospital closures nationwide, they had little impact on patients unless you are in rural settings and that headline says in Rural Missouri but its clear they mean rural may mean rural settings anyway. You had close to the hospital in oceola closed. Do you want to talk about what your system did to alleviate some of that loss of service. Thank you, senator, yes, the hospital in oceola, about 35 miles north of boliver, closed november the 1st, and that represented a loss to that community. No more emergency room and loss of quite a few jobs. We did step forward and have taken over the operation of the Ambulance Service and weve taken over the operation of their Rural Health Clinic. In fact, we converted that into a walkin clinic open seven days a week, 12 hours a day so they can provide access to the patients in that area. Weve also taken over the operation of the Retail Pharmacy they had. Its the only pharmacy in town. Weve added Rehabilitation Services for physical and occupational and Speech Therapy services in the community. We try to provide Outpatient Care and the ambulance care to transport them to whatever hospital is appropriate when a patient has a need for emergency care. So weve tried to help alleviate the loss to that community, that certainly is a severe loss to osceola. I think the payer mix, almost the exactly you described about the same payer mix you have . My system is about 65 medicare medicaid. How much uninsured . About 7 at this point. So you have medicare and medicaid, and rest has some rest of your patients have some kind of coverage . Some sort of commercial coverage, correct. On rack audits, did you mention mr. Walters you had 500 claims currently . That are still sitting at the alj level and the backlog at the hearings center for the alj. So weve had about 1,000 denials overall over the past four or five years and weve appealed 85 of the denials. Of those that have been heard, at any level of appeal, weve been successful about 90 of the time in overturning the denial. Really . But the vast majority of appeals are still setting at the level and probably will be for another couple of years. And have this, have cms suspended rack audits because there is no aproehl possess right now, or are they continuing to have those audits. They are. Cms is reworking the contracts for the racks so they have essentially suspended activity while they are renewing the contracts. Cms has said theyre going to make some changes in the rack program. It appears to us the changes may not go far enough in terms of trying to correct whats wrong with the rack program. The overly aggressive incentives of recovery auditors to deny claims and take their percentage fees, regardless of the fact that most of those get overturned. Theres really no penalty to the rack auditor at this point. So they cannot deny me as i want but keep it for several years while the appeal is in process. So of the 500 claims and the 3. 5 million, you had to give that you had to return that money . Right, the money is gone right now. Were just waiting for it to hopefully come back somewhere down the road. If your current and past history was right, the odds are somewhere in ht neighborhood of 90 youll get that money back but you dont know when you get the money back and the use of the money is gone and you cant plan to get it back. Yes, sir, thats correct. Whats your rack audit history or just pure views on how the system is working . I couldnt agree more that the incentives dont align with a legitimate helpful audit process. Coding and determining whether someone is an observation patient or inpatient is very complex. We do welcome the ability to review those and go through a legitimate audit process. The problem is these are essentially bounty paid claims, so they get 9 or 12 or whatever the percentage is of any claims they overturn. Or deny. They also look at the entire record and second guess the physician who saw the patient at 2 00 in the morning in the er. So they are looking at a closed record of a fourday length of stay. The e. R. Physician had the information they had from the patient at the time. I think the other thing, theres a very, very long window that they can go back and deny those claims and review those claims and that also needs to be shortened up. Mr. Silver . Within our facility, being a critical access hospital, we are or maybe the outlier, that weve not had any particular rack issues or of such. Weve had minor ones, but we have not been i guess were just the outlier. But within kansas, we have a number of our my colleagues and those facilities out there that are faced with the continuance of having to fight for or prove through their appeal process. Is this process different for critical access hospitals . Im not aware individually. You happen to be a critical access hospital but you dont know thats why your experience is different . That would be correct. I dont know if our experiences are different. Can i make one one of the major areas company. Im using the moran standards. So another few minutes here. I would say one of the big areas that they are looking at is the decision to admit or not to admit a patient. One difference with a critical access hospital is the inpatient outpatient is still cost reimbursed and less of an impact on medical reimbursement there, for a critical access hospital, because they get paid for the care, whether its called inpatient or outpatient. For a pps hospital like cmh or regional, we get paid a higher payment for inpatient admit than for an observation payment. A significance difference in the level of payment. One other major position is whether you should have put the person in the hospital or not . Exactly. Typically, theyre not questioning the care we provide. They acknowledge the person needed to be there. They are saying should not have been an inpatient and that dramatically changes the level of reimbursement for the patient. Although they are looking at critical access claims in some areas. Ive been told on the hospital wage index is that rural hospitals can constantly pull more and more behind compared to counterparts in other places, would you think that would be an accurate statement . Yes, it is, because the data the cms used to determine the wage index is several years old and what happens is the wage data goes down. Youre paid less. Therefore, you have less to spend on salaries. It becomes a cycle where you end up paying less to your staff. You dont give the pay increases that maybe an urban hospital would give
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