Tuesday, January 17, 2017

Pa. pilot project to pay rural hospitals set amount each month, instead of reimbursing for services

State officials in Pennsylvania hope a new payment model for rural hospitals will keep more of them from going under, Steve Twedt and Karen Langley report for the Pittsburgh Post-Gazette. The Pennsylvania Rural Health Model, funded by $25 million from the Centers for Disease Control and Prevention and the Centers for Medicare and Medicaid Services, will pay hospitals a set amount each month, instead of reimbursing them for services provided.

As part of the pilot project six rural hospitals—a mix of independent hospitals and hospitals affiliated with larger health systems—will be selected "to participate in an initial pilot project of the payment model, which will launch in 2018," reports the Post-Gazette. "The group will then be expanded to 24 additional hospitals in the next three years." State Department of Health Secretary Karen Murphy said the $25 million "will be used to create a rural health redesign center to provide data analytics and other support."

"Various financial reports and surveys in recent years show how much small, rural hospitals in Western Pennsylvania have struggled," reports the Post-Gazette. "For the July-September 2016 period, regional hospitals with fewer than 100 beds collectively lost $10.4 million in those three months, for a negative 4.84 percent operating margin, according to a new Healthcare Council of Western Pennsylvania survey of its members. That compares with a negative 4.67 percent margin in 2015. Hardest hit have been small, rural hospitals that have fewer than 100 beds but are long-established with their communities and often are the only accessible acute care setting for miles."

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