At the start of the new year, the federal government began a new payment model for struggling rural hospitals. However, the program requires that rural hospitals give up their inpatient services to receive payment, leaving them feeling as though they must choose between their community’s needs or their facility’s survival.According to a recent study by the nonprofit Center for Healthcare Quality and Payment Reform, over 600 rural hospitals, or nearly a third of all rural hospitals in the country, are at risk of closing due to not being paid enough to cover the cost of delivering services in rural areas.

This new program, however, seeks to relieve rural hospitals by offering larger Medicare reimbursements and monthly facilities payments to rural hospitals that agree to convert to outpatient-only facilities, exclusively keeping patients for less than 24 hours. Under this program, the Centers for Medicare and Medicaid Services offer $272,866 in monthly facilities payments for hospitals that have converted to providing outpatient services only, as well as an additional 5 percent to rural hospitals with under 50 beds for their covered outpatient services.

While the new model provides a chance at viability for some rural hospitals that otherwise could not stay afloat, others say that eliminating their inpatient unit does more harm than it does good, both for the community and the hospital itself. By converting to a strictly outpatient/emergency center, most rural hospitals typically cannot recover the costs associated with ridding of their inpatient units, nor can they do without the lost revenue. This would also leave many rural patients struggling to access bigger hospitals that are also struggling with finances, overcrowding issues and staffing shortages.

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