There has been a public outcry since the recommendation was issued in August, said Doneen Hollingsworth, South Dakota Department of Health cabinet secretary. The department of health will fight it and the governor will fight it, she said. The governor has already sent a letter opposing it, she said.
The proposal from the Office of the Inspector General in the U.S. Department of Health and Human Services would require hospitals to be at least 35 miles away from another hospital in order to maintain their critical access hospital status. In the past, the federal government has allowed states to designate hospitals less than 35 miles as critical access hospitals. Bowdle Healthcare Center and Eureka Community Health Services Avera are 24.1 miles from each other. One of the hospitals would have to close for the other to maintain its critical access status.
The status allows hospitals to receive 101 percent of the cost of treating their Medicare patients versus the 70 percent reimbursement rate for patients at most hospitals.
The loss of Medicare funding would be devastating to small rural hospitals, hospital administrators say.
"This is one of those rules made in D.C. that just doesn't work," Hollingsworth said. "I think the whole thing is ludicrous. We need to fight it, and the state will fight it."
She said that the current network of critical access hospitals aims to insure adequate health care access for South Dakotans as well as the economic viability of towns. The hospitals do a good job of caring for their patients, she said.
"It is crazy to say that by driving patients to a larger tertiary care facility that the government would save money," she said. "That is a fallacy. Rural hospitals provide more cost-effective care than urban facilities."
Medicare funding is especially important to rural hospitals that have a high percentage of elderly patients. In Eureka, the median age of residents is 63.5 years, according to the 2010 census. About 48 percent of the residents are age 65 or older, according to the census.
The loss of Medicare revenue for critical access hospitals would have a huge impact on the hospital, said Carmen Weber, interim administrator at Eureka Community Health Avera, in a Sept. 5 story in the American News.
"Hospitals are very important to small towns," Hollingsworth said. "A community without a hospital has difficulty attracting a physician. It affects the nursing home and the pharmacy. These hospitals are very important to the fabric of the community."
Hollingsworth said she is optimistic that the proposal from the Office of the Inspector General will not be fully adopted by the U.S. Congress
"The outcry against this has been very loud," she said.
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