Rural hospitals are closing, and Congress needs to step in

Keokuk, Iowa; Crisfield, Maryland; Jellico, Tennessee; Bowie, Texas. They’re four very different areas of our country that all represent a dangerous trend: Each has seen their local hospital close since the start of 2020, and they’re not alone.

Since the beginning; of the COVID-19 pandemic, as many as 25 rural community hospitals have shuttered, dropped in-patient care or severely cut services. 

Congress kept that number from being much higher, saving many hospitals from closure by providing crucial support during the peak the pandemic that kept care accessible to millions of patients in rural areas.

While the height of the pandemic is behind us, the needs of these small community hospitals remain. It is vital for lawmakers to step up again, this time to stop nearly $2 billion in cuts by the end of the year that could lead to more closures. In fact, a recent survey found that of the remaining full-service rural hospitals, 46% were operating with negative margins in 2021.  

It’s important to remember that these are far more than just statistics–they represent small to medium-sized communities left without direct access to timely and often lifesaving care. Closures are also a big hit to local economies, with rural hospitals often being one of the top employers in town, not to mention a key factor for economic development.

While hospital closures grab headlines, the growing shortages of physicians and other healthcare providers in rural areas are nearing a crisis level too. The numbers are alarming: Nationwide, 20% of the population lives in these small communities, but only 10% of doctors practice there. This lack of physicians, for example, leaves many residents driving hours for everything from prenatal care to cancer treatments. 

Although rural hospitals face a myriad of challenges, timely solutions are available that could ensure people in these communities have access to the care they need. It starts with congressional action during the lame duck session, which is already underway. 

The Medicare Dependent Hospital (MDH) and Low-Volume Hospital (LVH) designations are set to expire Dec. 16 and must be extended. The problem is that Medicare and Medicaid reimburse less than the cost of providing care, which in 2020 resulted in rural hospitals incurring $5.8 billion in Medicare underpayments and $1.2 billion in Medicaid underpayments. These programs were created to ensure the nearly 700 qualifying rural hospitals can continue to provide much needed services in their communities by better reflecting the actual costs of providing care in rural areas–where patients are more likely to be older, poorer and sicker than those in urban areas. If lawmakers don’t act before the end of the year, rural caregivers could face a $600 million annual shortfall.

A law that’s more than a decade old also could push more rural hospitals over the financial cliff if Congress doesn’t intervene. The Statutory Pay-As-You-Go Act of 2010 (PAYGO) could lead to a $37 billion cut to Medicare reimbursements in 2023 that will affect the entire healthcare system–especially providers in small communities where, because of demographics, more patients are relying on the program for their care. Hospitals on the brink could be forced to close, while hundreds of others may have to reduce access to care by eliminating services. Congress should waive these looming Medicare cuts once and for all by the end of the year.  

The midterm elections have left us with a narrowly divided government, which often leads to legislative gridlock. But we are hopeful that in the next Congress lawmakers will continue to show bipartisan support for rural health needs such as expanding telehealth, increasing support for mental health and substance abuse treatment, as well as strengthening the caregiver workforce.

The clock is ticking. Rural Americans need lawmakers to stand up and secure access to care before more folks in small towns suffer the same fate as those in Keokuk, Jellico, Bowie and Crisfield–forced to travel extra miles and lose valuable minutes when lifesaving care is needed.