Hospital Association Proposes New Model for Rural Hospitals Facing Steep Cuts

May 2, 2016

The Oklahoma Hospital Association floats a new plan to help struggling rural hospitals stay open with Medicaid reimbursement rates on the state’s chopping block.

OHA’s 24-hour outpatient model would eliminate inpatient services at rural hospitals. Outpatient services like primary care and behavioral health would help offset losses from running emergency rooms. OHA’s Andy Fosmire said few rural ER visits turn into admissions at those hospitals.

"Most of them are treated and released, or stabilized and then shipped to a higher level of care," Fosmire said.

Eastern Oklahoma Medical Center CEO Mike Carter said a lot of his current Medicare and Medicaid patients in Poteau end up being transferred to Fort Smith, Tulsa or Oklahoma City.

"Many times, a patient's family doesn't have the means to travel with that patient, or many times we've heard patients who are discharged at that hospital and simply don't even have a mode of transportation to get back home," Carter said.

Hospitals that adopt the new model, which is voluntary, would have minimal overnight staffing, though a doctor must be on call and able to arrive in 20 minutes at most.

This model hasn’t been tried before, so the federal agency over Medicare and Medicaid doesn’t have a reimbursement schedule for it. Fosmire hopes to get several states to join Oklahoma in a pilot study soon and said bad things happen when rural hospitals close completely.

"There's no longer imaging services in that community. There's no longer lab services in that community," Fosmire said. "The primary care providers are going to go on to work somewhere else, generally, if there's not full services to support them. It's kind of a domino effect that happens in a community when a hospital closes."

The Oklahoma Health Care Authority has proposed cutting Medicaid reimbursement rates 25 percent to deal with state budget cuts. Carter and other rural hospital administrators said that would force them to close entire departments and possibly more.