13 of Kentucky's 71 rural inpatient hospitals at risk of closing, with six of them at immediate risk, a national policy center estimates

Center for Healthcare Quality and Payment Reform map

By Melissa Patrick
Kentucky Health News

Thirteen of Kentucky's 71 rural inpatient hospitals are at risk of closing, and six of those are at immediate risk of closing, according to the latest analysis of Hospital Cost Reports by the Center for Healthcare Quality and Payment Reform, a policy center that says it works toward patient-centered, affordable health care. 

The report does not name the 13 hospitals, but it does offer a wealth of financial information about most rural hospitals in Kentucky and every other state, including critical access hospitals and rural emergency hospitals that are not designated as rural.  

The center says its analysis is based on financial data from the most recent cost reports that hospitals must submit annually to the Centers for Medicare and Medicaid Services. The financial report shows rural hospitals' operating margins, profits and losses on patient services and revenues and costs on patient services and those that are not directly tied to patient care. 

Low reimbursement rates from Medicare and Medicaid are often blamed for why rural hospitals have such ongoing financial troubles, but the center expands that list to all types of insurance, saying in the report, "losses on private insurance patients are the biggest cause of overall losses" in at-risk hospitals. 

"The only way to prevent more closures of services and hospitals is for all health insurance plans, including Medicare Advantage plans, commercial insurance plans, and Medicaid programs, to pay rural hospitals enough to cover the higher costs of delivering services in rural areas," the center says in a news release. 

The center also states that the federal  Rural Emergency Hospital program, which forces rural hospitals to eliminate inpatient services in order to receive large federal grants, "is not a solution to these problems" because it eliminates much-needed services in a community. Kentucky has one such hospital, Crittenden Community Hospital in Marion, Ky. 

Instead, the center calls for change in how rural hospitals are paid and proposes a method of payment that calls for all payers to start providing "standby capacity payments" to rural hospitals to cover the fixed costs of essential services such as emergency care, inpatient care and maternity care. 

What the numbers show

According to the center's "Data on Rural Hospitals" financial status report, using data from the three most recent years for which Hospital Cost Reports are available, 15 rural hospitals in Kentucky lost money (defined as "negative total margin");  19 others lost money on patient services, but not overall; and 10 lost money on patient services and overall. 

The 15 listed with negative total margins are in Fulton, Pineville, Irvine, Carlisle, Madisonville, Shelbyville, Albany, Manchester, Owenton, Mount Sterling, Marion, Burkesville, South Williamson, Campbellsville and Russellville.  

The 10 cited that lost money on patient services and overall are in Pineville, Irvine, South Williamson, Marion, Mount Serling, Shelbyville, Albany, Owenton, Manchester and Fulton. 

The 19 listed that lost money on patient services, but not overall are in Martin, Columbia, Prestonsburg, Benton, Hazard, Paintsville, Danville, Greenville, McDowell, Harlan, Salem, Middlesboro, West Liberty, Carrolton, Russell Springs, Monticello, Tompkinsville, Hardinsburg and Whitesburg.

The report explains several ways that a hospital could lose money on patient services, but not overall. 

"Many hospitals have managed to remain open despite losses on patient services because they receive local tax revenues or state government grants," says the report. "However, there is no guarantee that these funds will continue to be available in the future or that they will be sufficient to cover higher costs." 

For example, the report notes that the federal assistance many hospitals received during the pandemic has ended, which has resulted in more than one-third of rural hospitals losing money overall in 2022-23. 

It also says that some hospitals have financial reserves to offset the loss of inpatient services, adding that "the hospitals at greatest risk of closing have more debts than assets . . . to offset their losses on patient services for more than a few years."

What's Kentucky doing? 

The previous report said 16 rural Kentucky hospitals were at risk of closing and 10 of those at immediate risk of closure, higher than this year's 13 and six, respectively.  

More information is needed to know why the number of at-risk hospitals in Kentucky is lower than they were in last year's report, but what is known is that Kentucky legislators have passed laws to help support them. 

Kentucky Cabinet for Economic Development table 

For example, in 2020 they created the Kentucky Rural Hospital Loan Program, a revolving loan fund for distressed rural hospitals, and in 2021, funding of $20 million. 

The original bill allows the Cabinet for Economic Development to provide loans to struggling hospitals to maintain or upgrade facilities; maintain or increase staff; or provide health services not currently available. The low-interest loans can run up to 20 years and are available to hospitals in counties with fewer than 50,000 people.

So far, eight Kentucky hospitals have been approved for projects, with $7.2 million in funds authorized. They are Pineville Community Health Center, Baptist Health Deaconess Madisonville, Rockcastle Hospital & Respiratory Care Center in Mount Vernon, Trigg County Hospital in Cadiz, Crittenden Community Hospital in Marion, Ohio County Hospital Corporation in Hartfort, Deaconness Union County Hospital in Morganfield and ARC Health Systems in Ashland.  

Of this list, the hospitals in Pineville and Madisonville and the Rural Emergency Hospital in Marion have negative total margins. 

Laws have also been passed to allow Kentucky hospitals to get more money from Medicaid, basing payment on the "average commercial rate" instead of the current Medicaid rate, which is often below that amount. This legislation was passed under two bills -- the first in 2021 that addressed higher rates for inpatient care and the second, passed in 2023, that addressed higher payments for outpatient care, which is the one that is most beneficial to rural hospitals. 

More recently, the Kentucky Hospital Association gave a detailed overview of the 340B drug discount program at the July 30 Interim Joint Committee on Health Services and asked for help to secure these payments with contract pharmacies as a way to ensure rural hospitals can keep providing many of the programs they support. 

KHA President Nancy Galvagni explained that the 340B program requires pharmaceutical companies to sell drugs to covered hospitals and their contract pharmacies at their best price, allowing Kentucky hospitals to then invest their 340B savings to provide patient services that otherwise would not be available. 

For example, she said the savings from the 340B program allows some hospitals to "keep the doors open." Others, she said, use it to offer low-cost medications for the uninsured, cancer programs and hepatitis C clinics, and to support their charity care.   

Galvagni added that because some hospitals don't have in-house pharmacies, they contract with local pharmacies to provide the medications covered by the 340B program. 

"The problem we face is the large pharmaceutical manufacturers have refused to deliver the medications covered by the 340B program to our contract pharmacies," she said. "That refusal by these large, highly profitable multinational corporations to deliver medications to the contract pharmacies creates massive losses for the critical programs our patients need. Without the savings from the 340B program, critical health services will become unaffordable, and hospitals simply won't be able to provide the care that is funded from the 340B savings." 

In closing, Galvagni asked the General Assembly to enact legislation to require the delivery of these 340B medications to contract pharmacies in Kentucky, as six other states have already done and 19 more are working on. 

The center's figures can be downloaded at https://ruralhospitals.chqpr.org/Data1.html.

UK expands heart and vascular care to hospitals across the state

By Melissa Patrick
Kentucky Health News

One of the many ways that UK HealthCare strives to improve the heart health of Kentuckians is through its Gill Heart and Vascular Institute Affiliate Network, which includes a community of hospitals across the state working to ensure patients receive high-quality cardiac care close to home. 

The program serves a great need, since heart disease is the leading cause of death in Kentucky and the state has one of the country’s highest rates of heart disease. 

Dr. Navin Rajagopalan

Dr. Navin Rajagopalan, director of the affiliate network, said it is made up of over 20 hospitals throughout the state.  

"Our key mantra is always . . . one of collaboration," he said. "The University of Kentucky is a big hospital, we have lots of services here. But we never want to be seen as competing with local, community hospitals for their patients. So we want patients to stay local for as long as possible to receive optimal cardiovascular care." 

He added that while it's important for UK's program to remain strong for patients who may need higher levels of care, the goal of the network is to "provide resources, education, and training, where appropriate, to the hospitals in our network." 

New to the network is Owensboro Health Muhlenberg Community Hospital in the Muhlenberg County seat of Greenville, featured recently in a UK news release. CEO Ed Heath said being in the network "furthers our mission to heal the sick and to improve the health of the communities we serve." 

“We look forward to utilizing the expertise of UK HealthCare and the perks of this affiliation to better serve our patients," he added.

Rajagopalan stressed that the program isn't about UK taking over a hospital's cardiovascular program, but is designed to foster collaboration and expertise-sharing among the member hospitals. Members of the network have access to educational resources, quality-improvement initiatives and specialized training, and Rajagopalan said the network can provide outreach clinics or assist with cardiovascular imaging. "The idea . . . is that patients can receive specialized care close to home," he said.

When Dr. Michael Karpf was running UK HealthCare in 2013, he said it needed to expand its geographical reach to maintain its newly raised national status and to ensure access to quality care for Kentuckians. "We want the hospital to be the first choice when it comes to complex care,” he said, identifying several regional competitors. First on his list was Vanderbilt University in Nashville, which is 80 miles closer to the Greenville hospital than UK and gets many patients from Western and Southern Kentucky. It has locations in Hopkinsville and Franklin.

Asked if UK's program is driven by competition in any way, Rajagopalan said, "No, we make it very clear that this is not based on referrals." 

Hospitals in UK's Gill Heart and Vascular Institute Affiliate Network (UK HealthCare map)

Rajagopalan said UK is not actively recruiting new hospitals into the network and already had some relationship with many of them. More often, he said, hospitals will call UK with a question about something and that's how they learn about the program. He added that UK HealthCare also offers the Markey Cancer Center Affiliate Network and a Stroke Care Network. 

As for money, he said fees collected within the affiliate network are put back into the program in some way: "We don't make any money off the network." 

According to the news release, the affiliate network includes 24 hospitals, more than 15 outreach locations and more than 12 sites where Gill provides cardiac image interpretation services across cardiovascular imaging modalities.

Rajagopalan told Kentucky Health News that the work they are doing at the Gill Heart and Vascular Institute Affiliate Network is "relatively unique." 

"We're kind of hoping to have more success stories and kind of share what we're doing to  other academic centers," he said. "Because I think the way that we, as an academic institution, interact with the community hospitals in our region is rather unique in terms of the spirit of collaboration and in trying to support all the hospitals  in the community."

As part of resetting its relationship with rural hospitals, UK will not build a new hospital at interstate junction in southeast Lexington

By Al Cross

Kentucky Health News

FRANKFORT, Ky. -- The University of Kentucky will not build a hospital in southeast Lexington because it wants to do what its network of rural hospital partners want: focus on its mission as a top-level care facility for the sickest patients, a UK vice president told a legislative subcommittee Wednesday.

Mark D. Birdwhistell (UK photo)

The proposed Hamburg-area hospital "was perceived as us stepping outside of our swim lane" by the university's clinical affiliates out in the state, Senior Vice President for Health and Public Policy Mark Birdwhistell told the Budget Review Subcommittee on Health and Family Services.

"We heard loud and clear, 'We want UK HealthCare to focus on taking care of the sickest of the sick. We don't want UK out doing primary care and secondary care.' . . . That was very eye-opening."

Birdwhistell reiterated, "The message we received loud and clear from our clinical affiliates was, 'When our folks get that sick, we want them to come to UK. We want them on campus. We don't them in a community hospital.'"

UK was in the planning process for a new hospital at the southern junction of Interstates 75 and 64, and had bought the property and done some initial work. Baptist Health is in the process of opening a new hospital on an adjacent site.

Instead of a hospital, UK will build a clinic with specialty services like the one it has built in a former department store in the Turfland Center in southwest Lexington, but larger, Birdwhistell said after the meeting: "Turfland plus."

He told the legislative subcommittee that the university will also build other clinics to serve its employees in Lexington and the Bluegrass region, many of whom are "having to get health care outside the system. . . . We feel like that is our obligation."

Birdwhistell spoke to the subcommittee in a new role, which he said will include centralizing the university's "government-relations activities across campus," including "building a better partnership with the General Assembly. I felt I was uniquely positioned to do that."

 

Previously, Birdwhistell was UK HealthCare's vice president for health system administration and chief of staff. He was secretary of the state Cabinet for Health and Family Services under Republican Gov. Ernie Fletcher, and helped Republican Gov. Matt Bevin propose changes to the federal-state Medicaid program, which he had run before becoming cabinet secretary. He appeared with Angela Dearinger, executive vice dean of the UK College of Medicine, who was briefly health secretary at the end of Bevin's term.

The General Assembly is firmly controlled by Republicans. In the recent legislative session, Birdwhistell was the university's point man in changing legislation that helped Pikeville Medical Center and some other rural trauma hospitals but in its original form would have reduced some of the extra Medcaid payments that UK gets for being a "safety net" hospital.

That relates to UK's recent takeover of other hospitals in Ashland and Morehead, which Birdwhistell discussed at Wednesday's legislative subcommittee meeting. Speaking of UK's absorption of King's Daughters Medical Center in Ashland, he said "Where we failed . . . is when you put that UK brand in front of that name, that brings with it an expectation of service, not predator," which he said was the perception of some.

"And so, we're readjusting a lot of the narratives to say, 'When you have UK in front of your name, you go to a partner and say, 'What can we do to help you be successful?' It's not 'What do we do to crush you?' And this is community health care. This is not our forte, so we've learned that lesson. . . . We can grow the workforce for those providers and not have to do it ourselves."

Birdwhistell said UK can also serve as a backstop for its rural partners, noting that UK doctors rearranged their schedules one weekend to keep open the neonatal intensive-care unit at Pikeville, which would have had to close temporarily due to employee vacations. "That's what we do," he said. "That's where we excel and that's where we need to get back to."

UK's latest acquisition is St. Claire Medical Center in Morehead, where it has run a satellite medical-school program for several years. The College of Medicine also has satellites in Bowling Green and Northern Kentucky, and Dearinger said it has seven residency programs in Bowling Green, the state's third largest city, and is starting residency programs in Ashland and Pikeville.

"We are trying to grow the number of doctors to stay in our state," Dearinger said, calling UK's Rural Physician Leadership Program "one of our crown jewels." She said it has produced 120 doctors, most of whom are practicing in Kentucky, "the vast majority" in rural parts of the state. Later, she said 42 percent of all recent medical-school graduates from UK have stayed in Kentucky, far above the 24% of "a few years ago."

Two Democratic legislators from Louisville, Sen. Karen Berg and Rep. Lisa Willner, asked Dearinger if UK has had fewer applicants for medical school or residencies due to restrictions on medical education, by which they meant the recent state law that bans abortions except in cases of threat to the woman's life or permanent damage to a life-sustaining organ.

Dearinger said "To be honest, we have not seen a decrease." She said she has heard anecdotal reports of students or graduates interested in obstetrics and gynecology going elsewhere, but "We are still inundated with OB applicants to do a residency at the University of Kentucky."

Another Louisville Democrat, Rep. Sarah Stalker, noted a May 16 Kentucky Health News story, from Kentucky Public Radio, that said 15% fewer U.S. medical-school graduates applied to Kentucky residency programs in the 2023-24 academic year, and there was a 23% decline in those for obstetrics and gynecology, according to the Association of American Medical Schools., which blamed the decline on the state's near-total abortion ban.

Dearinger said UK is still getting hundreds of "very good applicants, and we don't have any problems filling our residency programs and fellowship programs with very high-quality young physicians. We are prioritizing as much as we can, Kentucky students, so that they will stay" in the state.

Roll call: Most members of the subcommittee did not attend the late-morning meeting. The chairman, Sen. Donald Douglas of Nicholasville, a physician, noted that at the start of the meeting and made an unusually pointed comment: "I expect my colleagues in the General Assembly to show up."

31% of Kentucky women live more than half an hour from a hospital with a maternity unit; across the U.S., only 9.7% do

Map from 2023 March of Dimes report

By John McGary, WEKU

“Estill Medical. This is Madisyn. How may I help you?”

It’s a few minutes before lunch at Estill Medical Clinic, in Irvine. The practice is owned by nurse practitioner and Estill native Donna Isfort. It offers many services, but, like every other medical facility in the county, no obstetrician/gynecologist.

Isfort said, “Many, many of my patients at least have to travel anywhere from 30 minutes to 60, 70, minutes just to get to obstetrical care. There's just not any here. We have no nurse midwives. . . . I do family practice, so I do a lot of women's health at my clinic, but not prenatal care.

Estill County does have a hospital, but a spokesman for Mercy Health-Marcum and Wallace Hospital said it hasn't delivered babies since 1986, not counting unplanned births in the emergency room.

According to a 2023 report by the March of Dimes, women living in what some call “maternity care deserts” like Estill and several nearby counties must travel more than twice as far to get the care they need. Multiple studies conclude that greater distance puts women, expectant and otherwise, at greater risk.

The report says 31 percent of Kentucky women live more than 30 minutes form a birthing hospital; the national figure is 9.7%.

Isfort says she and her staff work closely with the Estill County Health Department to provide the help they can and out-of-county referrals for services they can’t provide.

Some think Kentucky’s maternity care deserts may spread. At a June 24 rally in Lexington to mark the two-year anniversary of the Supreme Court’s toppling of Roe v. Wade, second-year medical student Shriya Dodwani painted a bleak picture.

“The Accreditation Council for Graduate Medical Education requires that OB/GYN residents have access to abortion training,” Dodwani said. “This isn't about politics. It's about ensuring that we have the comprehensive skills needed to provide the best possible care for our patients. Without this training in Kentucky, we're left with no choice but to leave and pursue our education elsewhere.”

In a recent survey of students at Kentucky’s three medical universities, 62 percent of respondents said they’re considering finishing elsewhere because of the state’s near-total abortion ban.

A week later, University of Kentucky HealthCare officials unveiled a plan that could help some women in rural areas. The outreach division of UK Women’s Health OBGYN announced they’d add services at 19 new sites, several in Eastern Kentucky, and expand telehealth services.

Dr. Emily DeFranco is chair of UK’s Department of Obstetrics and Gynecology, said “We'll send a sonographer with an ultrasound machine to the site, and they'll perform the ultrasound and then virtually, by telemedicine, the physician who is in Lexington is able to view the images from the ultrasound, and then have a video conference with the patient on that site and counsel her about the findings.”

That sort of outreach could eliminate some of the long trips many women must make for routine care. Another program, funded in part by Medicaid and tobacco-settlement dollars, helps expectant and new mothers: HANDS, which stands for Health Access Nurturing Development Services. It’s available to all women during pregnancy through a child’s third birthday.

At the Estill County Health Department, Teresa Talbott is the ongoing home visitor, dropping in weekly with 15 to 20 families per year for the last 17 years.

“We're not coming in to look at your home. We're not coming, you know, to tell you what t“o do, Talbott said. “We're just coming in and giving you the information and helping you along with it.”

One woman she’s helping now is Whitney Bingham, who happens to be the health department’s Women, Infants and Children program coordinator. Talbott, who Bingham calls TT, is assisting her and her two-year-old son through challenges ranging from potty training to car-seat installations.

But Bingham says that when it’s time for her to leave for an OB-GYN visit, she makes the hour-long drive to Lexington.

The state Cabinet for Health and Family Services declined our request for an interview with the Department for Public Health’s director of women’s health.

Bowling Green's Med Center Health acquires Russellville hospital

Sign on chain's flapship hospital in Bowling Green

Kentucky Health News

Med Center Health, the nonprofit hospital chain based in Bowling Green, is now the owner of 75-bed Logan Memorial Hospital, and has changed its name to The Medical Center at Russellville. That extends the chain to seven like-named hospitals in Southern Kentucky, from Russellville to Albany.

Med Center Health said the facility will have will have six ICU/CCU beds and 10 swing beds, and serve a population of about 45,000. The purchase, finalized July 1, also includes three medical office buildings on the main campus as well as rural health clinics in Russellville, Auburn and Elkton.

“Med Center Health’s mission is to care for people and improve the quality of life in the communities we serve,” President and CEO Connie Smith said in a news release. “This acquisition aligns perfectly with that mission as we look to further enhance healthcare services for residents of Logan County and surrounding communities. We have a proven track record of improving access to care and services in our rural communities, and we could not be more excited to do the same for our friends and family in Logan County.”

The hospital was owned by the county until 1989, when it was sold to Nashville-based Hospital Corp. of America, which had managed the facility for several years. HCA later became Columbia/HCA Healthcare. In 1999 the hospital was part of that company's spinoff of rural hospitals into a new firm called Life Point. In 2022, when Life Point acquired Kindred Healthcare, it became part of a new company call ScionHealth, which sold it to Med Center Health.

Dr. Kamal Singh of Russellville, a member of the hospital's board, said in the release, “We are proud of the quality patient care that we deliver at Logan Memorial Hospital to the local families, Individuals, and our neighbors, and we are very pleased with the progress we have made under ScionHealth’s ownership. We are confident that Med Center Health’s breadth and depth of care services will best serve the local community as they seek to expand services and offer the resources of the most comprehensive health system in the region.”

Med Center Health, which grew out of the government-owned Bowling Green-Warren County Hospital, says it has more than 3,500 employees and 150 employed health-care providers.

Rural Tennessee hospitals near Kentucky border remain closed as the Volunteer State keeps spurning expansion of Medicaid

Jellico Medical Center is defunct. (KFF News photo by Taylor Sisk)

By Taylor Sisk
KFF Health News

JELLICO, Tenn. — In March 2021, this town of about 2,000 on the Kentucky border in the shadow of Pine Mountain lost its hospital. It's in Campbell County, which ranks 90th of Tennessee’s 95 counties in health outcomes and has a poverty rate almost double the national average, so losing its health care cornerstone sent ripple effects through the region.

“That hospital was not only the health-care lifeline to this community,” said Tawnya Brock, a health-care quality manager and a Jellico resident. “Economically and socially, it was the center of the community.”

Since 2010, 149 rural U.S. hospitals have closed or stopped in-patient care, according to the Cecil G. Sheps Center for Health Services Research at the University of North Carolina. Tennessee has had the second-most closures of any state, with 15, and the most closures per person. Texas has the most, with 25. Neither state has expanded Medicaid under the Patient Protection and Affordable Care Act, as has Kentucky, where only four hospitals have closed.

Jellico Medical Center was a 54-bed, acute-care facility. When it closed, some 300 jobs went with it. Restaurants and other small businesses in Jellico also have gone under, said Brock, who is a member of the Rural Health Association of Tennessee’s legislative committee. And the town must contend with the empty husk of a hospital.

Dozens of small communities are grappling with what to do with hospitals that have closed. Sheps Center researchers have found that while a closure negatively affects the local economy, those effects can be softened if the building is converted to another type of health care facility.

In Jellico, the town owns the old hospital building, and Mayor Sandy Terry said it is in decent condition. But the last operator, Boa Vida Healthcare of Indiana, holds the license to operate a medical facility there and has yet to announce its plans for the building, leaving Jellico in limbo. Terry said local officials are talking with health-care providers that have expressed interest in reopening the hospital. That’s their preferred option. Jellico does not have a Plan B.

“We’re just in hopes that maybe someone will take it over,” Terry said. Meanwhile, the nearest emergency rooms are a half-hour drive away in LaFollette, Tenn., and in Corbin, Ky.

MapQuest map, adapted by Kentucky Health News

An hour and a half away in Fentress County, the building that once housed Jamestown Regional Medical Center has been empty since June 2019, when Florida-based Rennova Health — which also previously operated Jellico Medical Center — locked it up.

County Executive Jimmy Johnson said Rennova’s exit from Jamestown was so abrupt that “the beds were all made up perfectly” and IV stands and wheelchairs sat in the halls. About 150 jobs evaporated when the center closed.

Rennova still owed Fentress County $207,000 in taxes, Johnson said, and in April the property was put up for auction. A local business owner purchased it for $220,000. But Rennova was granted a year to reacquire the building for what it owed in back taxes, plus interest, and did so within a few days.

Abandoned hospital buildings dot the map in Middle and East Tennessee. In West Tennessee, some shuttered hospitals have found new life.

The closing of McKenzie Regional Hospital in 2018 was a blow to the local economy. But Baptist Memorial Health Care, which operates a hospital in nearby Huntingdon, bought the assets — including the building, land, equipment, and ambulance service — and subsequently donated the building to the town of McKenzie.

Cachengo, a technology company, ultimately took over the space. Because of hospitals’ electrical infrastructure, the site was a perfect fit for a business like his, said Ash Young, Cachengo’s chief executive. Young said Cachengo is now looking into repurposing abandoned hospitals across the country.

Jill Holland, McKenzie’s former mayor and a local-government and special-projects coordinator for the Southwest Tennessee Development District, believes the town can become a technology hub. “It’s opening a lot of doors of opportunity for the youth in the community,” she said.

But in Jamestown, the vacant hospital is “deteriorating,” said Johnson, the county executive. “It could have been used to save lives.” Rennova did not respond to a request for comment.

The University of Tennessee Medical Center opened a freestanding emergency room elsewhere in Jamestown, sparing residents a half-hour drive to the closest ER. Johnson believes the old hospital building could serve the community as housing for those who are homeless or as a facility to treat substance use disorder.

Brock, the health-care quality manager, thinks things will get better in Jellico, but the community has had its hopes dashed more than once.

Brock believes a freestanding emergency room could be a viable solution. She urges her community to be responsive to “a new day” in rural health in America, one in which a hospital must focus on its community’s most urgent needs and be realistic about what that hospital can provide.

“Maybe it is just the emergency room, a sustainable emergency room, where you could hold patients for a period of time and then transfer them,” Brock said. “And then you build upon that.”

She added, “There are options out there.”

KFF Health News, part of the Kaiser Family Foundation, is a national nonprofit newsroom producing in-depth journalism about health issues.

Bill to help Pikeville hospital turned into a law that will help other rural hospitals after UK saw it as a threat and rewrote the bill

State Sen. Phillip Wheeler discussed his SB 280
 on KET's "Kentucky Tonight." (Screenshot from KET)

By Melissa Patrick
Kentucky Health News

State Sen. Phillip Wheeler of Pikeville says one of the most consequential pieces of legislation passed by state lawmakers this year is a bill he sponsored to funnel more money to rural hospitals in Kentucky. 

Senate Bill 280 allows certain rural hospitals that get at least 35% of their revenue from Medicaid to get the same enhanced Medicaid reimbursement rate as the University of Kentucky or the University of Louisville. 

The hospitals are defined as those that have a trauma center and offer clinical rotations for doctors, nurses and other medical professionals who are in training.

"It kind of levels out that playing field," Wheeler told Kentucky Health News. "And it does this without placing any additional liability for matching funds on the General Fund by allowing local communities to assess a provider tax against the medical provider." Such taxes are applied to revenues of health-care facilities, typically to get more government matching money.

Asked if his bill will keep rural hospitals from closing, Wheeler said, "I wouldn't be so bold as to say that this is the only solution. I think you need to take a multifaceted approach and providing these hospitals with the ability to compete and the funding they need to develop this specialized care is one piece of the puzzle."

Wheeler, a Republican who represents Elliott, Johnson, Lawrence, Martin and Pike counties, said the higher reimbursements will allow rural hospitals to provide a higher level of care, especially when it comes to specialty services. And this, he said, will increase access to care for rural communities. 

"Not only does that make a huge difference to the patients being served, but it also will result in a much larger increase in investment in health care in those communities," he said. "And . . . especially in a lot of rural areas, including where I live in the 31st Senate District, health care has essentially become our largest industry. I mean, the largest employer in my district, by far, is Pikeville Medical Center with over 3,000 employees." 

Wheeler said he didn't think anyone would be harmed by this law, noting that he resolved concerns voiced by UK HealthCare, which has clinical rotations at King's Daughters Medical Center in Ashland, which it recently purchased.

Path to "good public policy" 

Mark Birdwhistell, UK HealthCare's vice president for health system administration and chief of staff, explained that UK and UofL receive enhanced Medicaid reimbursements because they are Level I trauma centers that agree to care for the "sickest of the sick" patients in the state and also house the state's primary educational programs for medicine and dentistry.

UK HealthCare VP Mark Birdwhistell

He said the impetus of SB 280 and its companion bill SB 281, which was not heard in committee, came about when UK bought King's Daughters, which allowed the Ashland hospital to get the higher Medicaid reimbursement. 

The original SB 280 would have given Level II trauma centers -- Pikeville has the only one in the state -- the same enhanced Medicaid rate as UK and UofL. SB 281 said UK and UofL could only take that enhanced Medicaid reimbursement in clinics or hospitals that operated in the county of the educational facility, limiting UK's enhancement to Lexington.

"Both of these had unintended consequences," Birdwhistell said, so UK could not support the bills in their original form. He said they would have left UK with lower Medicaid payments for services provided in any hospital that it has an agreement with to provide care, such as Hazard Appalachian Regional Healthcare. In addition, he said UK has practices in other counties, such as Bowling Green and Manchester, that get enhanced Medicaid payments.   

"That would have been devastating if that had come to fruition," said Birdwhistell, who was state health secretary in 2006-07. Later adding, "It would have significantly reduced funding and would have eventually compromised good patient care in the commonwealth."

That's because the state has to get ongoing approval from the federal government for the special Medicaid payment plans, one for public universities and another for private hospitals. And, he said, if these two pieces of legislation had passed in their original format, it would have triggered an amendment to the current plans, possibly putting them at risk. 

Driven by this concern, Birdwhistell said he suggested that the bill keep the existing enhanced Medicaid plans but have a different solution allowing a third way for hospitals to get the enhanced payments. 

"We moved it from a potential where we would not be able to get as much federal Medicaid money in the state to a new program that has the potential of pulling in additional reimbursement and an incentive to focus on access and improved outcomes, improved patient outcomes," he said. 

The revised bill that passed allows an opportunity for hospitals to get comparable reimbursement to what the universities get if they meet the criteria to do so, and Birdwhistell. And this, he said, accomplishes the goal of creating a more "level playing field."

Further, he said SB 280 allows the opportunity for additional Medicaid payments for care provided by other health-care workers, such as advance-practice registered nurses, dentists and social workers. It also says that pediatric teaching hospitals are able to get the additional Medicaid reimbursements for services to patients under 18. 

"So I think we ended up with good public policy that has the potential of improving access and  patient outcomes for the Medicaid population," Birdwhistell said.

He added later, "I think it is transformative because it has the potential of aligning people's incentives around an increased increased physician workforce, opening up additional access, appointment availability. And thirdly, aligning around access and quality." 

Birdwhistell said six or seven hospitals will likely qualify for the enhanced Medicaid payments in the first wave of hospitals. He said the goal is to get the plan submitted to the Centers for Medicaid and Medicare Services by Aug. 1 and for payments to be approved by January 2025. 

A news release from the governor's office said it estimates that 43 Kentucky hospitals meet the requirements of the new plan, dubbed the Kentucky Medicaid Assistance Program. The plan is contingent upon approval from CMS. Wheeler said they have "very good indicators" that it will be approved. 

Why SB 280 is important

Donavan Blackburn, president and chief executive officer of Pikeville Medical Center, said he'd been working on this bill for the last year and a half "to address the inequality and disparity between us and urban hospitals," which have a greater share of patients with commercial insurance, which pays higher rates. 

He pointed out that his Level II trauma hospital accepts patients from 48 other hospitals in the region who need a higher level of care and that 77% of them are either on Medicaid or Medicare. He said Pikeville Medical Center "serves the sickest of the sick and the most financially challenged in the nation." 

And while he said his hospital could be likened to UK or UofL when it comes to the services it provides, it is not a state-owned hospital or a teaching hospital. The hospital has an agreement with the University of Pikeville and four nursing schools to provide clinical rotations. 

In particular, he said it's his mix of payers that makes SB 280 so important because this extra money will allow the high level of care provided by the hospital to continue. 

"And what that extra payment means is, is that programs like our children's hospital, like our trauma center, like our specialties and subspecialties, endocrinology, rheumatology, all those different specialties that we're able to offer here in our community can stay in our community," he said. "Which means that not only people have access to care, but it prevents a diagnosis that if it goes untreated, becomes advanced, which costs actually the state and federal government even more."

Further, he said it will allow the hospital to retain jobs in health care, which is the top economic driver in the region. 

Blackburn said the success of SB 280 will be evident if they are able to "keep those service lines open and to keep making investments and advancements and to be able to keep up with all the other markets. . . . It's about advancement and sustainability." 

Ky. Hospital Association presents awards at annual convention

Nina Eisner, Lexington (KHA photos)

Kentucky Health News

The Kentucky Hospital Association honored several health-care leaders in the state at its annual convention in Lexington on May 21.

KHA’s highest honor, the Distinguished Service Award, was presented to Nina Eisner and Charles Lovell for untiring and exceptional service.

Eisner has served in clinical and administrative health-care positions for 45 years. In 2002, she became CEO of The Ridge Behavioral Health System in Lexington, She has been a strong advocate for Kentucky’s psychiatric hospitals and their patients and is a long-serving KHA trustee and has served in many other roles with KHA, the association said in a news release.

Charles Lovell, Barbourville

Lovell has been part of the Kentucky and Tennessee health-care landscape for the past 45 years. After serving as an emergency-room nurse in Memphis, he became CEO of several Tennessee and Kentucky hospitals, coming to Kentucky in 2003, to run Caldwell County Hospital in Princeton. He helped build a replacement hospital to serve Caldwell and Lyon counties.

In 2015, Lovell became community CEO at Barbourville ARH Hospital, which added many services and was the 2023 Knox County Chamber of Commerce Business of the Year. Lovell himself was the chamber's Man of the Year. Lovell has also held many roles with the KHA, chairing its Board of Trustees in 2013-14.

KHA’s Award of Excellence, given to individuals who have made significant contributions to health care in Kentucky, was presented to State Rep. Danny Bentley, R-Russell. 

Bentley, a pharmacist, has represented House District 98 (Greenup County and part of Boyd County) since 2017. He is known for helping his neighbors with health issues, and as a legislator helped pass measures that helped rural hospitals.

The KHA Health Care Governance Leadership Award, for individuals who have had a positive and sustainable impact on the quality of care in their communities through their work as hospital trustees, was presented to Gavin Roberts, chair of the Owensboro Health Board of Directors. The hospital is Owensboro’s largest employer, and Roberts has chaired the Owensboro Chamber of Commerce.

University of Kentucky will buy St. Claire Hospital in Morehead

University of Kentucky trustees Friday approved buying St. Claire HealthCare in Morehead. (UK photo)

The University of Kentucky Board of Trustees voted Friday to approve plans to acquire St. Claire HealthCare in Morehead. The targeted date for UK's takeover is July 1. 

The move will expand clinical and academic programs and provide more access to high-quality patient care for more Kentuckians, UK said in a news release.  

“UK is committed to growing clinical services in the Morehead area as well as expanding programs in many clinical areas to grow the future health care workforce for Kentucky,” President Eli Capilouto said in the release.  

St. Claire is one of the largest employers in the Morehead region, with more than 1,300 employees, including over 50 physicians and nearly 50 advanced-practice professionals in more than 20 medical specialties.

St. Claire has partnered with UK on a number of academic and clinical programs since the 1960s, co-developing the Rural Physician Leadership Program along with Morehead State University and establishing a training and residency site for UK's colleges of Medicine, Pharmacy and Health Sciences. It is also home to the College of Health Sciences's Physician Assistant Program.

St. Claire President and CEO Donald H. Lloyd II, who will remain in that position, said in the release that "UK identified as the natural partner that could carry forward the previous work and ongoing investment while growing the health-care workforce."

He added, “In an ever-changing health care landscape, both St. Claire and UK are deeply committed to accessible and high-quality patient care and strategic collaborations that will enhance services to benefit Kentuckians throughout northeastern Kentucky for many decades to come.”

According to the release, St. Claire HealthCare includes a hospital with 139 licensed beds and seven primary-care clinics in five counties, a multi-specialty medical pavilion, two urgent-care centers, a pediatrics clinic, a retail pharmacy, a counseling center, an outpatient center and a medical equipment and supply store. St. Claire also provides home health and hospice services in eight counties.

This is UK's second major foray into hospital care in northeastern Kentucky in recent years. In 2021, the university created a joint venture with King's Daughters Memorial Hospital in Ashland in which UK holds the assets and manages the hospital system.

President's brother promoted the failed hospital chain that ran Pineville's community hospital into the ground, Politico reports

Pineville Community Health Center (Photo from Pineville Sun and Cumberland Courier)

Kentucky Health News

In May 2017, three men came to Pineville, Ky., the Bell County seat of 1,700 people, looking for business from Pineville Community Hospital, which had just been bought by a company that was buying financially distressed hospitals. One of them was James Biden, a brother of Joe Biden, who five months earlier was the vice president of the United States and is now president.

As the business relationship between then-hospital owner Americore and Biden's firm Fountain Health developed, Americore listed Jim Biden as a partner, identifying him as "Brother and campaign finance chair of former vice president Joe Biden," and Jim Biden began using his connections with current and former federal officials to help Americore, which was having trouble operating the facility that it had renamed Southeastern Kentucky Medical Center, reports Ben Schreckinger of Politico.

"Several former Americore executives said Joe Biden was central to Jim Biden’s ambitions for the company," Schreckinger writes. "One said that Jim Biden explained to him, 'His brother was very interested in rural health care and very interested in veterans’ health care and it was something he really wanted to get behind.' In fact, Jim Biden told the executive, if Americore successfully demonstrated a model for revitalizing rural health care, Joe Biden could run on it in 2020. 'This would help his brother get elected if it were to take off and go,' the former executive explained."

James Biden (Photo illustration by Politico)

There's no evidence that Joe Biden became involved in his brother's business, but his son Hunter Biden discussed with Jim Biden and Americore "the possibility that Americore could land an investment from associates of Jim and Hunter Biden affiliated with CEFC, a Chinese energy firm, according to a person familiar with the conversation," Schreckinger reports.

But no investments were made, and by January 2018, Americore was insolvent, according to a Securities and Exchange Commission complaint against hedge-fund manager Michael Lewitt, who was working with Jim Biden and Americore. Nevertheless, Politico reports, Jim Biden "waded deeper into the business," the financial model of which appeared to be based on taking advantage of federal rules that allow rural hospitals to charge more for laboratory work.

In Pineville, where Americore had renamed the hospital Southeastern Kentucky Medical Center, it was having trouble meeting payroll. Then it "stopped paying health-insurance premiums for its Pineville employees," Schreckinger reports. "Staffers, who continued to have the premiums deducted from their paychecks, only learned of the problem when their insurance claims met with surprise rejections. As a result, when the husband of one longtime employee, Betsy Marsee, died, her life insurance claim was denied, according to Pineville Mayor Scott Madon, a former executive at the hospital, and a report in the Middlesboro News."

In mid-2018, Jim Biden ended his relationship with Americore. In 2019, Medicare and Medicaid, which covered more than 90 percent of the Pineville hospital's patients, cut off payments to it. The hospital wenyt into bankruptcy, was sold in a bankruptcy auction to a local bank that essentially acted as an angel to save a hospital that had been a great source of pride for the town. 

A January 2019 report by the Centers for Medicare & Medicaid Services, part of the Department for Health and Human Services, says that "Over the course of 2018, doctors left, equipment went without maintenance and medical supplies became scarce," Schreckinger reports. "At times, staffers had to leave the operating room mid-surgery to track down missing gauze. . . In October, the report said, a surgeon quit after concluding that operating there was 'endangering the lives of my patients.'

"Then, just after 8 p.m. on the first Tuesday of December, a patient arrived in the throes of cardiac arrest. Twice, the patient needed epinephrine to stimulate their heart, but the hospital did not have enough of the drug on hand, and staff from the ambulance service had to provide it. A doctor ordered an X-ray of the patient’s chest, but it appears none was taken: A nurse later told an HHS investigator that there were no radiology staffers on hand that night. At 9:55, the patient, identified by HHS only as Patient #12, was pronounced dead."

The hospital is the only one so far to get financial aid from a new state fund to help rural hospitals. The $1 million loan at 1% interest over a five-year term was approved by the Kentucky Economic Development Finance Authority in December 2021.

Renamed Pineville Community Healthcare, it was sold in 2023 to Michael Fry of Nashville but offers only limited services, such as an emergency room and outpatient surgery. The first option in its telephone list is the laboratory.

Half of rural hospitals lose money; firm says 418 could close; Ky. not a standout except in Medicare Advantage, which is a threat

Map by Chartis Center for Rural Health, labeled by Kentucky Health News

Kentucky Health News

Rural hospitals are in more trouble than ever, and 418 of them are “vulnerable to closure,” according to a study of their finances by Chartis, a Chicago-based health-care consultancy that specializes in tracking the business of rural health.

The Chartis Center for Rural Health says rural hospitals are entering "a startling new phase of this crisis as rural hospitals fall deeper into the red, 'care deserts' widen throughout rural communities, and the increasing penetration of Medicare Advantage could further disrupt rural hospital revenue."

The top warning signal cited in the study is that half of rural hospitals are losing money, up from 43 percent a year ago. That news is especially bad for independent rural hospitals, 55% of which are in the red, while only 42% of rural hospitals affiliated with groups are operating at a loss. "Nearly 60% of rural hospitals are now affiliated with a health system," Chartis reports.

Most people on Medicare now have Medicare Advantage, private insurance plans that get lump sums from Medicare to cover members and look for ways to attract customers while limiting claims. "Medicare Advantage now accounts for 35% of all Medicare-eligible patients in rural communities," Chartis reports, saying Advantage plans' share of rural residents has risen 48% since 2019. 

Chartis map, labeled by Ky. Health News; click on it to enlarge

That's a problem for rural hospitals designated as "critical access" because Medicare Advantage plans' net reimbursement to such hospitals "is often lower for similar services than that of traditional Medicare because Medicare Advantage does not follow cost-based reimbursement" as traditional Medicare does for such hospitals, Chartis reports. Insurance companies negotiate those rates with hospitals, and in many rural areas, hospitals are at a negotiating disadvantage because few insurers operate in their service areas.

Also, "Medicare Advantage may not cover all the services traditional Medicare does, including swing beds, which provide skilled nursing care for patients and are often a strong source of revenue stability for rural hospitals," Chartis notes. "Rural providers may not be equipped to efficiently navigate administrative requirements for payment introduced by Medicare Advantage, such as prior authorizations, which can lead to increased denials."

Since 2010, "167 rural hospitals have either closed or converted to a model that excludes inpatient care," Chartis says. The firm says its estimate that 418 are “vulnerable to closure” is based on "a new, expanded statistical analysis" of their finances, gleaned from cost reports they file with Medicare.

The report does not give details for each state, but places each one in certain ranges. It deems fewer than 10% of Kentucky rural hospitals "vulnerable to closure" but places the state in the highest range of rural Medicare Advantage growth. As for being in the red or the black, it puts Kentucky among the states where 41% to 60% of the rural hospitals are losing money.

Center for Excellence in Rural Health celebrates Rural Health Day

Director Fran Feltner, front and center, poses with her staff at the University of Kentucky Center for Excellence in Rural Health in Hazard. (UK photo)

By Beth Bowling
University of Kentucky

HAZARD, Ky. — The University of Kentucky Center of Excellence in Rural Health and the Kentucky Office of Rural Health are proud to join communities across Kentucky and the nation in celebration of National Rural Health Day on Thursday, Nov. 16, 2023.

The National Organization of State Offices of Rural Health spearheads the event, held on the third Thursday of November each year. Rural-focused organizations throughout the state and nation are celebrating the “Power of Rural” and honoring the individuals and organizations dedicated to addressing the unique health care needs of more than two million Kentuckians living in rural areas and nearly 61 million people living in rural areas across the U.S.

"In Kentucky, over two million people live in rural and more than 100 Kentucky counties are designated as rural,” said Center for Excellence in Rural Health Director Fran Feltner. “It is vital that we ensure all rural Kentuckians have the opportunity to be healthy and have access to affordable, quality health care.”

Kentucky Office of Rural Health Director Matt Coleman said the mission for both the center and the KORH is to improve access to care and health outcomes for Kentuckians living in rural.

“Having a nationally and statewide recognized day to focus on rural health is extremely important to not only highlight the work being done across the state, but also to give an opportunity to stakeholders and providers to find out what’s going on in their communities,” said Coleman.

“KORH was established by the federal government in 1991 as a way to help support the health and well-being of Kentuckians in rural. We do this a number of ways by providing a framework that links small, rural communities with resources while working toward long-term solutions to rural health issues.”

Since its inception, the KORH has helped clinicians, administrators, and consumers find ways to improve access to and quality of health care through programs like the Rural Hospital Flexibility Program, the Kentucky State Loan Repayment Program, the Kentucky EMS Leadership Academy and many more, while ensuring that funding agencies and policymakers are made aware of the needs of rural communities.

The Center for Excellence in Rural Health, which is the federally designated state Office of Rural Health, has made strides in improving access to education by bringing degrees close to home and securing funding for health care worker loan relief programs. More than 1,000 students have graduated in recent years from rural programs offered at the CERH in Hazard, with most working in rural settings.

CERH Data Analyst Sydney Howard explained that rural health workforce studies conducted at the center highlight the continued need for rural health workers, including physicians, nurses, dentists, medical laboratory scientists, social workers, community health workers and more.

“We have been fortunate to see rural-based health care training opportunities expand in Kentucky in recent years, which is critically important given that more than 30 rural Kentucky counties are currently facing health professions shortages,” said Howard. “Rural Kentucky is also home to 29 critical-access hospitals and nearly 400 rural health clinics, all of which are key in reaching rural populations across the Commonwealth.”

Feltner said, “We are optimistic that Kentucky’s future will be bright with the continued dedication and investment of people and resources to address the needs of rural communities. CERH is proud to recognize the incredible rural health workers, researchers, teachers, students, volunteers and many others in our community on National Rural Health Day and throughout the year.”

CERH and KORH created a special rural health day video to highlight the dedicated individuals and important work going on across Kentucky. Watch the video here.

Medicare Advantage isn't an advantage for many rural hospitals

Breckinridge Memorial Hospital in Hardinsburg has had financial difficulties. (Photo by Melissa Patrick)

By Sarah Jane Tribble
KFF Health News

The popularity of Medicare Advantage plans is putting a squeeze on many small, rural hospitals, those with a designation that qualifies them for slightly higher reumbursements from Medicare and Medicaid.

Medicare Advantage insurers are private companies that contract with the federal government to provide Medicare benefits to seniors in place of traditional Medicare. The plans have become dubious payers for many large and small hospitals, which report the insurers are often slow to pay or don’t pay.

Private plans now cover more than half of all those eligible for Medicare. And while enrollment is highest in metropolitan areas, it has increased fourfold in rural areas since 2010. Meanwhile, more than 150 rural hospitals have closed since 2010. Largely rural states that have not expanded Medicaid, such as Texas, Tennessee, and Georgia have had the most closures.

(Kentucky has expanded Medcaid, but 16 of the state's rural hospitals are at risk of closing, and 10 of those are at immediate risk, according to the latest analysis of hospitals' Medicare cost reports by the Center for Healthcare Quality and Payment Reform, an advocacy group. The report didn't name the 16 hospitals.)

Medicare Advantage growth has had an outsize impact on the finances of small, rural hospitals that Medicare has designated as “critical access.” Under the designation, government-administered Medicare pays extra to those hospitals to compensate for low patient volumes. Medicare Advantage plans, on the other hand, offer negotiated rates that hospital operators say often don’t match those of traditional Medicare.

“It’s happening across the country,” said Carrie Cochran-McClain, chief policy officer of the National Rural Health Association. “Depending on the level of Medicare Advantage penetration in individual communities, some facilities are seeing a significant portion of their traditional Medicare patient or beneficiary move into Medicare Advantage.”

In Nevada, Jason Bleak runs Battle Mountain General Hospital, a three-hour drive from Reno, and four hours from Salt Lake City. Bleak suspects insurance companies simply haven’t enrolled enough of the area’s seniors to need his hospital in their network.

When several representatives from private health insurance companies called on him a few years ago to offer Medicare Advantage plan contracts so their enrollees could use his hospital, Bleak sent them away.

“Come back to the table with a better offer,” the chief executive recalled telling them. The representatives haven’t returned.

Kelly Adams is the CEO of Mesa View Regional Hospital, another rural hospital in Nevada, near the Arizona border. He said he applauds Battle Mountain’s Bleak for keeping Medicare Advantage plans out of his hospital “as long as he has.”

Mesa View, which is a little more than an hour’s drive east of Las Vegas, has a high percentage of patients enrolled in Medicare Advantage plans.

“Am I going to say I’m not going to take care of 40% of our patients at the hospital or the clinic?” Adams said, adding that it would be a “tough deal” to be forced to reject patients because they didn’t have traditional Medicare.

Mesa View has 21 Medicare Advantage contracts with multiple insurance companies. Adams said he has trouble getting the plans to pay for care the hospital has provided. They are either “slow pay or no pay,” he said. In all, the plans owe Mesa View more than $800,000 for care already provided. Mesa View lost about $1.3 million taking care of patients, according to its most recent annual cost report.

NRHA’s Cochran-McClain said the growth in the plans also narrows options for patients because “the contracting that is happening under Medicare Advantage frequently has an influence on steering patients to specific types of providers.” If a hospital or provider does not contract with a Medicare Advantage plan, then a patient may have to pay for out-of-network care. That generally wouldn’t happen with traditional Medicare, which is widely accepted.

At Mesa View, patients must drive to Utah to find nursing homes and rehabilitation facilities covered by their Medicare Advantage plans.

“Our local nursing homes are not taking Medicare Advantage patients because they don’t get paid. But if you’re straight Medicare, they’d be happy to take that patient,” Adams said.

David Allen, a spokesperson for the lobbying group America’s Health Insurance Plans, declined to respond to Bleak’s and Adams’ specific concerns. Instead, he said enrollees are signing on because the plans “are more efficient, more cost-effective, and deliver better value than original Medicare.”

Centers for Medicare & Medicaid Services Press Secretary Sara Lonardo said CMS has acted to ensure “that private insurance companies are held accountable for providing quality coverage and care.”

The reach of private Medicare Advantage plans varies widely in rural areas, said Keith Mueller, director of the Rural Policy Research Institute at the University of Iowa College of Public Health. If recent trends continue, enrollment could tip to 50% of all rural Medicare beneficiaries in about three years — with some regions like the Upper Midwest already higher than 50% and others lower, such as Nevada and the Mountain States, but trending upward.

In June, a bipartisan group of Congress members, led by Sen. Sherrod Brown, D-Ohio, sent a letter urging federal agencies to do more to force Medicare Advantage insurers to pay health systems what they owe for patient care.

In an August response, CMS Administrator Chiquita Brooks-LaSure wrote that a final rule issued in April made “impactful changes” to speed up care and address concerns about prior authorization — when a hospital and patient must get advance permission for care to ensure it will be covered by an insurer. Brooks-LaSure noted another proposed rule that, once finalized, could mandate that insurers provide specific reasons for denying care within seven days.

Hospital operators Adams and Bleak also want more federal action, and fast. Bleak at Battle Mountain said he knows Medicare Advantage plans will eventually move into his area and he will have to contract with them.

“The question is,” Bleak said, “how can we match the reimbursement so that we can sustain and keep our hospitals in these rural areas viable and strong?”

Some rural hospitals are fighting Medicare Advantage; more than half of Kentuckians on Medicare have the private plans

Medicare Advantage plans may offer more benefits but also
have rules that can limit patients' choices. (Anthem website)

A hospital system in central Oregon has "threatened to cut ties with all Medicare Advantage plans next year, a move that would leave an estimated 26,000 local beneficiaries without access to a hospital less than 100 miles away," Nona Tepper reports for Modern Healthcare.

St. Charles Health System CEO Steve Gordon said last month that Meedicare Advantage, "a program intended to promote seamless and higher quality care, has instead become a fragmented patchwork of administrative delays, denials and frustrations." More than half of Kentuckians on Medicare have private Medicare Advantage plans.

Tepper reports, "Health systems nationwide appear to share Gordon's consternation, especially those similarly located in rural areas. Rural health-care providers tend to be disproportionately affected by factors such as reimbursement cuts or denied and delayed payments from Medicare Advantage plans because Medicare enrollees make up most of their patient populations. Cutting off Medicare Advantage plans, or at least declaring that to be a possibility, is a response to the growing market power these carriers have, especially over rural providers."

Tepper notes, "Rural Medicare Advantage enrollment is growing faster than overall enrollment: Since 2010, the share of rural beneficiaries who choose private plans over the traditional program has more than quadrupled, to 40% from 11%, according to Kaiser Family Foundation survey results published this month.

"Among the 58 publicly known contract disputes between insurers and providers this year, 35—more than half—involved Medicare Advantage carriers, according to data compiled by FTI Consulting.  Most conflicts center on how health insurance companies do business more than on reimbursements, said FTI Consulting Managing Director Adam Broder."

Tepper adds: "At Aspirus Health, some Medicare Advantage insurers deny as many as 35% of claims, said Matthew Heywood, CEO of the Wausau, Wisconsin-based nonprofit health system. In response, the 17-hospital chain is renegotiating contracts to include provisions regarding prior authorizations and claims processing times, he said."