In the News
Posted on June 25, 2019
A new step from the Trump Administration aims to reverse the unnerving trend of rural hospital closures.
In recent years, too many rural Tennesseans have seen their local hospital close and their doctors leave town.
Last year, McKenzie Regional Hospital closed, and just this month, the only hospital in Fentress County closed – bringing the number of hospital closures up to 11 in Tennessee since 2012.
Since 2010, 106 rural hospitals have closed across 27 states, and another 673 – about 36 percent of all rural hospitals – are at risk of closing.
A recent survey by the Robert Wood Johnson Foundation and the Harvard School of Public Health found that one in four Americans in rural areas could not access health care when they needed it.
A new rule from the Trump Administration works to fix the flawed Medicare Area Wage Index, which benefits some hospitals at the expense of others.
Medicare uses this wage index to calculate the costs of labor associated with hospital services for Medicare patients—so hospitals in areas with a high cost of living get higher Medicare reimbursements while hospitals in areas with a low cost of living get less. This means, for example, that a hospital in San Jose, California, will receive more money from Medicare than a hospital in Jackson or Brownsville, Tennessee.
But thanks to this new rule proposed by the Trump Administration in April, the Centers for Medicare and Medicaid Services (CMS) will update the wage index formula so rural hospitals can keep up with the cost of providing care.
This new rule from CMS will help ensure Americans can access health care close to their homes by attempting to level the playing field between urban and rural hospitals that rely on the Medicare hospital payment system.
Craig Becker, who leads the Tennessee Hospital Association, wrote earlier this month that this rule, “is good news for our state’s hospitals and will provide much-needed relief to many of them, especially those in rural areas,” and that the rule, “finally will address the significant inequities in the Medicare Area Wage Index — the first meaningful effort by any administration to address the flawed system.”
I agree, this is very good news for rural Tennessee, and the Trump Administration deserves a lot of credit.
The United States Senate is doing its part as well. The Senate health committee I chair is working on a bipartisan proposal to lower the cost of what Tennesseans pay for health care.
This legislation will reduce what Tennesseans pay out of their own pockets for care in three major ways: First, it will finally end surprise medical billing, so weeks or months after a hospital visit you don’t receive an expensive bill in the mail because the service you were provided was “out of network”; Second, it creates more price transparency – you can't reduce the cost of what you pay for your health care until you know what the cost of your health care is. And third, it reduces prescription drug costs by increasing competition and by bringing more lower cost generic and biosimilar drugs to patients.
Other provisions will expand technology-based health care to help Tennesseans in rural areas have access to specialty health care. The legislation will also extend funding for community health centers that 400,000 Tennesseans depend on for their primary care.
I commend the Trump Administration for what they are doing to help rural Tennesseans and rural hospitals, and I hope that CMS will quickly finish this rule and give more Tennesseans better health care choices and outcomes at lower costs.