Rural hospital in southwest Va., caught in vise of reimbursement cuts and static Medicaid, is closing

Lee Regional Medical Center in Pennington Gap, Va., a town of 1,800, is closing Tuesday "because of reimbursement cuts associated with Obamacare, extremely low community use of the hospital and a lack of consistent physician coverage," Hank Hayes reported for the Kingsport Times-News in East Tennessee. The 70-bed hospital receives more than 60 percent of its payments from federal and state programs. Virginia, which has a Republican governor who is leaving office at year's end, is leaning towards not expanding Medicaid under federal health reform. (Read more)

Beth O'Connor, executive director of the Virginia Rural Health Association, writes in the Daily Yonder that had Medicaid been expanded, the hospital could have stayed open. "Unlike a business, a hospital has to accept anyone and everyone who walks through the emergency room door, regardless of whether or not they are able to pay for the services they receive. If you are hungry and go to a grocery, but are unable to pay – you will not get food. If you are homeless and go to an apartment complex, but are unable to pay – you will not get a unit. But if you show up in a hospital emergency department and are unable to pay, that facility is required by federal law to see you anyway. And in small, rural hospitals the percentage of people who are unable to pay is much higher than in urban areas. For Lee Regional Medical Center that number is 12 percent; uninsured rates at other rural facilities range from 10 percent to 20 percent. Do you know of a business that could stay open if 20 percent of their customers did not pay the bill?"

Hospitals like Lee that have a disproportionate share of Medicare and Medicaid patients have been getting a 1 percent bonus on their reimbursements, but the reform law repeals that at the end of the year. The logic was that as Medicaid expanded and more people were treated, such hospitals would make up the loss on volume, but the U.S. Supreme Court said states could refuse to expand Medicaid without risking their overall Medicaid funding. Wellmont Health System, which owns the hospital, cited the problem as well as "the additional two percent cut in Medicare reimbursements enacted because of the federal sequester," Hayes reported.

"Medicaid expansion was written into the Affordable Care Act to decrease the number of uninsured people hospitals have to treat. Yet Virginia hasn’t kept up its end of the deal," O'Connor writes. "In its grave will lay jobs. Lee Regional Medical Center supports 190 full-time equivalent positions.  These are not low-paying, entry level jobs. These are doctors, nurses, anesthesiologists, therapists. In its grave will lay the local economy. The hospital, which is the fourth largest employer in the county, pumped $11.5 million in labor costs into the local economy every year. At almost 24 percent, Lee County already has the highest poverty rate of any county in the state. Where will that go from here?"

Lee County is at the far western tip of Virginia. Its residents will have to travel more than 20 miles to the nearest hospital, and more than 40 miles to the nearest advanced hospital, in Kingsport. "People who have to travel out of their community for service will undoubtedly take their money with them. Dollars spent on gas, food, entertainment and lodging will be stripped out of Pennington Gap, crippling their already fragile tax base." (Read more)