[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]








                 RURAL HEALTH CARE DISPARITIES CREATED
                        BY MEDICARE REGULATIONS

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 28, 2015

                               __________

                            Serial 114-HL04

                               __________

         Printed for the use of the Committee on Ways and Means





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                      COMMITTEE ON WAYS AND MEANS

                     PAUL RYAN, Wisconsin, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
DEVIN NUNES, California              JIM MCDERMOTT, Washington
PATRICK J. TIBERI, Ohio              JOHN LEWIS, Georgia
DAVID G. REICHERT, Washington        RICHARD E. NEAL, Massachusetts
CHARLES W. BOUSTANY, JR., Louisiana  XAVIER BECERRA, California
PETER J. ROSKAM, Illinois            LLOYD DOGGETT, Texas
TOM PRICE, Georgia                   MIKE THOMPSON, California
VERN BUCHANAN, Florida               JOHN B. LARSON, Connecticut
ADRIAN SMITH, Nebraska               EARL BLUMENAUER, Oregon
LYNN JENKINS, Kansas                 RON KIND, Wisconsin
ERIK PAULSEN, Minnesota              BILL PASCRELL, JR., New Jersey
KENNY MARCHANT, Texas                JOSEPH CROWLEY, New York
DIANE BLACK, Tennessee               DANNY DAVIS, Illinois
TOM REED, New York                   LINDA SANCHEZ, California
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
JIM RENACCI, Ohio
PAT MEEHAN, Pennsylvania
KRISTI NOEM, South Dakota
GEORGE HOLDING, North Carolina
JASON SMITH, Missouri
ROBERT J. DOLD, Illinois

                       Joyce Myer, Staff Director

         Janice Mays, Minority Chief Counsel and Staff Director

                                 ______

                         SUBCOMMITTEE ON HEALTH

                      KEVIN BRADY, Texas, Chairman

SAM JOHNSON, Texas                   JIM MCDERMOTT, Washington
DEVIN NUNES, California              MIKE THOMPSON, California
PETER J. ROSKAM, Illinois            RON KIND, Wisconsin
TOM PRICE, Georgia                   EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida               BILL PASCRELL, JR., New Jersey
ADRIAN SMITH, Nebraska               DANNY DAVIS, Illinois
LYNN JENKINS, Kansas
KENNY MARCHANT, Texas
DIANE BLACK, Tennessee



















                            C O N T E N T S

                               __________
                                                                   Page

Advisory of July 28, 2015 announcing the hearing.................     2

                               WITNESSES

Daniel Derksen, Director, Arizona Center for Rural Health........    27
Tim Joslin, CEO, Community Regional Medical Centers..............     9
Carrie Saia, CEO, Holton Community Hospital......................    22
Shannon Sorensen, CEO, Brown County Hospital.....................    16

                       SUBMISSIONS FOR THE RECORD

AAHomecare, statement............................................    62
AANP, letter.....................................................    66
AATHC, letter....................................................    69
America's Critical Access Hospital Coalition, statement..........    73
America's Essential Hospitals, statement.........................    75
Kaweah Delta Health Care District, statement.....................    80
Mayo Clinic Center for Connected Care, statement.................    83
NACDS, statement.................................................    87
NRHA, statement..................................................    91
Rural Hospital Coalition, statement..............................    96
Strategic Health Care, letter....................................   102
Teladoc, statement...............................................   103
WHA, statement...................................................   110

 
                 RURAL HEALTH CARE DISPARITIES CREATED
                        BY MEDICARE REGULATIONS

                              ----------                              


                         TUESDAY, JULY 28, 2015

                  House of Representatives,
                            Subcommittee on Health,
                               Committee on Ways and Means,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:06 a.m., in 
Room 1100, Longworth House Office Building, the Honorable Kevin 
Brady [chairman of the subcommittee] presiding.
    [The advisory announcing the hearing follows:]
   
   
   
   
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    Chairman BRADY. Good morning. Welcome to today's hearing to 
discuss rural healthcare disparities created by Medicare 
regulations. This is an important issue for all, but the 
challenges facing beneficiaries and providers are especially 
evident to those of us who represent districts that aren't 
completely urban.
    Our constituents are seeing firsthand the difficulties 
caused by overregulation and bureaucracy. And it's our rural 
neighbors who pay the price when it comes to access. Take, for 
instance, the so-called 96-hour rule. Critical Access Hospitals 
are a critical piece of rural health infrastructure. Doctors at 
Critical Access Hospitals have to certify that it is reasonable 
that an individual be discharged and transferred to a hospital 
within 96 hours of being admitted to a Critical Access 
Hospital. That arbitrary cutoff doesn't always match the 
medical reality for patients seeking treatment at facilities 
near their homes. I personally heard from St. Joseph's, a 
Critical Access Hospital in my district, on the problems with 
the 96-hour rule.
    Or consider the rules related to physician supervision: 
Physician shortages are a reality in many parts of our country. 
Rules that change the way routine therapeutic services are 
handled in rural areas or rules that bar physician assistants 
from providing services, like hospice, disrupt access and the 
continuity of care for rural beneficiaries.
    We can do better. We must do better. We will do better. We 
should provide relief for all of our hospitals and providers 
from overly burdensome regulations in bureaucracy. There is no 
better place to start that process than with our rural 
hospitals. There is much to be done, and today we are lucky to 
have here firsthand accounts from providers serving rural 
communities. First, we have Shannon Sorensen, CEO of Brown 
County Hospital in the Ainsworth, Nebraska, a constituent of 
Mr. Smith. Next, we have Tim Joslin, the CEO of Community 
Regional Medical Centers in Fresno, California, a constituent 
of Mr. Nunes'. Then we have Carrie Saia, the CEO of Holton 
Community Hospital, a facility in Congresswoman Jenkins' 
hometown in Kansas. Finally, we have Dr. Daniel Derksen from 
the University of Arizona.
    We are very happy to have you here today.
    This is the latest in a series of hearings held by the 
Health Subcommittee in the wake of the passage of legislation 
to fix the way Medicare pays our Nation's physicians. Now, I 
know we mentioned this in our MedPAC hearing last week, but it 
stands repeating: We are in the midst a great opportunity to 
reform how Medicare reimburses hospitals and post-acute-care 
providers, all critical to saving Medicare for the long term.
    I hope today we can make progress in understanding the 
concerns facing those in rural areas.
    And before I recognize the ranking member, Dr. McDermott, 
for the purpose of an opening statement, I ask unanimous 
consent that all members' written statements be included in the 
record.
    Without objection, so ordered.
    I now recognize Dr. McDermott for his opening statement.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    I want to thank the witnesses for coming this morning. I 
look forward to hearing what you have to say. I believe there 
is room for us to work together to address how we deliver 
health care to people who live in rural areas. I also believe 
that if we are going to have a serious conversation about this 
topic, we need to get the facts straight. Time and time again, 
I hear from Republican colleagues about rural hospitals closing 
down, threatening access to health care for many communities.
    I happen to represent an area where we have the WWAMI 
program, which covers one quarter of the United States' land 
mass, so I know about rural areas. And as they do with 
virtually every perceived problem in the healthcare system, my 
colleagues place the blame for all of it squarely on the 
Affordable Care Act. There is another side to this story.
    One of the major financial strains placed on hospitals is 
uncompensated care--has been for years. When patients, many of 
whom are poor and quite sick, are not covered by insurance and 
cannot afford to pay out of pocket, hospitals have to pick up 
the cost. It has been true--and we have not had the ability in 
the law yet to say you don't have got to take care of somebody. 
So if somebody comes in, you have to take care of them. And 
somebody pays; it is the hospital.
    We recognized this problem when we passed the Affordable 
Care Act. We worked to reduce uncompensated care coverage--
dramatically through an expansion of coverage of Medicaid. This 
would provide some of the more economically or most 
economically vulnerable people, many living in rural 
underserved areas with access to coverage.
    However, under Republican leadership, more than 20 States--
20 States--refused simply to accept Medicaid expansion, simply 
because it was part of President Obama's Affordable Care Act. 
Their decision has left 4.3 million people without insurance, 
forcing hospitals, many of them which serve rural areas, to 
pick up the cost. And not coincidentally, 80 percent of the 
hospitals that have announced recent closures are in States 
that chose not to expand Medicaid--80 percent are in States 
that didn't expand Medicaid. This is not a problem of Medicare 
regulations governing rural hospitals, nor is it a problem with 
the Affordable Care Act. It is a problem with the party that 
would prefer to sabotage the President's healthcare program for 
political purposes rather than try to make it work.
    So if we want to improve access to rural care and address 
the issue of rural hospital closures, we have to start by 
convincing the leadership to do what they should have done in 
the first place and expand Medicaid. To address the needs of 
rural communities, we also need to have long-term investments 
in our professional workforce.
    The United States faces a growing shortage of physicians 
and healthcare providers. That is nurse practitioners, PAs, all 
the people that provide care in rural ares. And it is predicted 
to reach in physicians alone by 2025 between 46,000 and 91,000 
people short to provide what is necessary. Rural areas are 
going to have a particular scarcity of physicians. We have 
tried lots and lots of things in the WWAMI program, but we 
continue to run into some of the same problems.
    Now, we should be skeptical that the solution of the 
problem lies in gutting Medicare support for graduate medical 
education in urban areas. There is minimal evidence whatsoever 
that this will result in more doctors practicing in rural 
areas. It will simply exacerbate the nationwide doctor shortage 
and lower the quality of training. There are better ways to 
train physicians who serve in rural areas. I encourage my 
colleagues to look at some alternatives.
    The University of Washington has run the WWAMI program, as 
I mentioned, which trains physicians not only in the cities but 
out in the rural areas. They are placed out in little bitty 
places, and they see what it is like. And they learn what is 
necessary, but also getting them to stay is tough. The program 
is the finest in primary care and rural in the whole country 
and has ably served the communities in Washington, Wyoming, 
Alaska, Montana, Idaho, for more than four decades.
    There are some other investments I believe we have to make 
if we are really going to deal with rural access. We can treat 
the medical profession like we treat the armed services and 
provide ROTC-style medical school scholarships to doctors who 
agree to a tour of service in underserved areas. I call this 
RDOCS, and I believe it is a smart investment. We don't think 
there is anything wrong with giving somebody a college 
education and then keeping him in the Navy or the Army or the 
Air Force for 5 years. Why don't we do the same thing with 
medicine? Get somebody to sign a contract upfront: I will take 
the scholarship, but I will serve 5 years as a result of that. 
Now, that is the only way you are going to get people out there 
for a long enough period for them to decide, you know, maybe I 
want to stay here. That is the real problem.
    Moving forward, rather than attacking our existing programs 
and pitting urban areas against rural areas, as we are going to 
do with this GME and IME and all the rest of it, I invite my 
colleagues to consider alternatives that would make a 
meaningful difference in rural areas.
    I yield back the balance of my time.
    Chairman BRADY. Thank you, Dr. McDermott.
    We are really excited to have the witnesses today. We think 
there is some common ground on areas like this that we can move 
forward on.
    So, Mr. Joslin, you are recognized for 5 minutes.

   STATEMENT OF TIM JOSLIN, CEO, COMMUNITY REGIONAL MEDICAL 
                      CENTERS, FRESNO, CA

    Mr. JOSLIN. Thank you, Mr. Chairman, Ranking Member 
McDermott, and Members of the Subcommittee. My name is Tim 
Joslin, and I am the chief executive officer of Community 
Medical Centers, based in Fresno, California. I appreciate the 
invitation to testify today about rural healthcare disparities 
and the role of federally funded graduate medical education, 
known as GME.
    Community Medical Centers is the largest healthcare 
provider in California's agricultural heart, San Joaquin 
Valley. We are a not-for-profit public-benefit operation 
operating four hospitals: Community Regional Medical Center in 
Fresno; Clovis Community Medical Center; Fresno Heart & 
Surgical Hospital; and Community Behavioral Health Center. 
Community Medical Centers accounts for one-third of all 
inpatient discharges in the five-county region.
    We run a level 1 trauma center, a burn center, and an 
ambulatory care center. We are also the largest inpatient 
provider of Medi-Cal services and uncompensated care in the 
region. Our downtown Fresno emergency department is one of the 
busiest in the State with some 114,000 visits a year. We 
provide all of this with the help of about 300 medical 
residents and fellows from the UCSF School of Medicine.
    Our challenge is unique and daunting. The rural San Joaquin 
Valley, though rich agriculturally, is very poor economically. 
Twenty-five percent of residents live in areas of concentrated 
poverty, making it the fifth poorest area in the country. In 
Fresno County alone, one-third of all children live at our 
below the poverty level. About 20 percent of Fresno County 
residents do not speak English and one-third of adults have not 
obtained a high school diploma. The entire area's population 
has significantly higher than average rates of asthma, 
diabetes, and obesity. Nearly one-third of the population 
qualifies as obese, for example. The Valley also has a higher 
than average incidence of chronic lung disease, likely due to 
is well-documented air quality issues.
    To make these sobering statistics even worse, the San 
Joaquin Valley suffers from a doctor shortage. The Valley has 
48 primary care physicians per 100,000 residents, well below 
the minimum recommended level of 60. If need is the measure, 
our region of the country should have more physicians per 
capita, not fewer. Graduate medical education is the key to 
solving this inequity. Community Medical Centers collaborates 
with the University of California San Francisco to support the 
training of graduate medical students. We currently support 
some 250 medical residents studying in eight areas, including 
primary care and emergency medicine. And we support 50 fellows 
studying in 17 medical subspecialties. This GME program is a 
critical feeder to the region's entire physician population, 
and we would like to grow the program.
    We are constrained, however. Our Medicare funding for GME 
positions is frozen at 1997 level. Community Medical Centers 
has expanded the program on its own beyond what Medicare funds 
by investing well over $400 million over the last 10 years, but 
considering that Community Medical Centers now shoulders more 
than $180 million in uncompensated care each year, the ability 
to expand our GME program on our own is financially limited. 
This in turn limits our ability to provide our region's 
residents access to health care now and in the future.
    In a region where the need for physicians is perhaps the 
greatest in the country, we are at a disadvantage under the 
current Federal system of allocating GME slots, yet our ability 
to expand access to physicians is highly dependent upon the GME 
program. As the Institute of Medicine's recent report noted, 
the location of one's medical school and GME training are 
predictive of practice location. Our own experience shows this. 
Close to 30 percent of our trained residents remain in the 
region to practice medicine. The current GME allocation 
criteria and caps have led to significant geographic 
disparities, as noted in a recent health affairs report, and 
are most acutely felt in our region of California.
    For example, our region's population has increased by a 
third since 1997, yet our federally funded resident physicians 
have remained at the 1997 level. This contributes to the 
disparity we see in the ratio of physicians to population. 
Community Medical Centers supports not only the expansion of 
GME but, equally critical, better allocation of GME slots to 
underserved regions within a State. We believe that policy 
goals of federally funded GME would be better served by a 
revised allocation system and urge this committee to consider 
proposals. We believe this will directly lead to more efficient 
and effective health care in our rural underserved region.
    Thank you again for this opportunity.
    [The prepared statement of Mr. Joslin follows:]
   
   
   
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    Chairman BRADY. Thank you, Mr. Joslin.
    Ms. Sorensen, you are recognized for 5 minutes.

  STATEMENT OF SHANNON SORENSEN, CEO, BROWN COUNTY HOSPITAL, 
                      AINSWORTH, NEBRASKA

    Ms. SORENSEN. Good morning, my name is Shannon Sorensen. I 
am the CEO of Brown County Hospital, a Critical Access Hospital 
located in north central Nebraska. I would like to thank 
Chairman Brady, Ranking Member McDermott, and the members of 
the House Ways and Means Subcommittee on Health for holding 
this hearing.
    Approximately one in six Americans live in rural areas and 
depend on the hospital in their communities. We are exactly one 
of those facilities. Not only does our location, being over 150 
miles from the nearest tertiary facility, affect us, our 
patient mix being over 70 percent Medicare also makes us more 
reliant on public programs. Changes, such as the 96-hour rule, 
often have significant and problematic consequences for rural 
providers.
    Due to the great support of our local community, compared 
to many of my peers, our hospital's financial situation is 
stable, but we are especially vulnerable to Medicare and 
Medicaid payment cuts. We are the communities and hospitals 
that most need your help.
    The 96-hour rule is especially burdensome in our day-to-day 
mission of providing health care in our communities. From the 
creation of CAH designation, until late 2013, an annual average 
of 96-hour stays allowed CAH's flexibility within the 
regulatory framework set up for the designation.
    The new policy of strict enforcement of a per-stay 96-hour 
cap creates an unnecessary red tape. Not only does it 
potentially limit access to health care by forcing rural 
beneficiaries to travel farther for treatment, it may deter 
them from necessary care, inconvenience patients, and add 
travel costs to Medicare. It impedes rural providers in their 
ability to care for their patients. Having to focus on 
regulatory burdens interferes with the best judgment of 
physicians and other healthcare providers, placing them in a 
position where our providers are constantly making regulatory 
decisions to dictate the medical decisions they need to make. 
The 96-hour condition of payment leaves no room for a needed 
change in the medical care plan if treatment does not go as 
anticipated.
    It is also important to note that while we must maintain an 
annual average length of stay of 96 hours, we offer some 
critical medical services that have standard lengths of stay 
greater than 96 hours. Enforcing the condition of payment will 
force us to eliminate these 96-hour-plus services and cause 
financial pressures that will severely affect our ability to 
operate. These are important services in our community and 
allow patients to get needed services and recover around their 
family and friends.
    CAHs in Nebraska and across the country support the 
Critical Access Hospital Relief Act, which would remove the 96-
hour condition of payment. I especially want to thank my 
Representative, Congressman Smith, for introducing the 
important legislation. Rural facilities and providers face many 
challenges without the heavy hand of government. We must be 
given the flexibility to provide affordable and efficient 
health care.
    Another burdensome regulation is the expansion of mandatory 
direct physician supervision. We simply do not have the 
manpower and resources to abide by these arbitrary regulations. 
Our highly trained licensed personnel are not able to practice 
at the highest level of their scope with this regulation.
    For 2015 and beyond, the agency requires a minimum of 
direct supervision for all outpatient therapeutic services 
furnished in our Critical Access Hospital, unless it is on the 
list of services that may be furnished under general 
supervision or is designated as nonsurgical extended duration 
therapeutic service.
    We are deeply disappointed that CMS did not heed concerns 
that this policy will be difficult to implement, will reduce 
access, and is clinically unnecessary. CAHs and small rural 
hospitals support the adoption of the default standard of 
general supervision, consistent definition of direct 
supervision, and prohibiting enforcement of CMS' retroactive 
reinterpretation back to 2001.
    H.R. 170 delays the unnecessary and burdensome physician 
supervision regulations and requires CMS to study their impact. 
We already face many unique challenges, such as providing 
quality care with more limited resources; satisfying 
complicated administrative requirements with a smaller staff; 
complying with numerous Federal regulations, which limit the 
discretion of highly trained providers; and now to be located 
in the building to render these services.
    Our community has one full-time primary care physician who 
is supported by two mid-level providers. With some of the 
regulatory burdens we face--such as requiring only a physician 
to oversee cardiac rehab or only a physician being able to 
order durable medical equipment, home health, or hospice 
services--any time our lone physician is not on our campus, 
takes vacation, or attends continuing education, significant 
patient needs have to wait.
    Our very capable mid-levels are able to provide the needed 
services in our emergency room and throughout the hospital. It 
makes no sense to prevent them from being able to do the same 
for cardiac rehabilitation, outpatient therapeutic services or 
other necessary services.
    Medicare provides vital funding for many rural payment 
programs, including Critical Access Hospitals. This 
subcommittee and Congress has the power to ensure Americans 
living in rural America who depend on the hospital will have 
access to appropriate care.
    Again, thank you, Congressman Smith, for introducing H.R. 
169. We appreciate the subcommittee's interest in the matter 
and urge it and the Congress to support much needed 
legislation. Thank you for your time and listening to our 
impact.
    [The prepared statement of Ms. Sorensen follows:]
   
   
   
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    Chairman BRADY. Great, thank you.
    Ms. Saia, you are recognized for 5 minutes.

   STATEMENT OF CARRIE SAIA, CEO, HOLTON COMMUNITY HOSPITAL, 
                         HOLTON, KANSAS

    Ms. SAIA. Good morning, Mr. Chairman, and Members of the 
Subcommittee, thank for the opportunity to speak today.
    More than 36 percent of all Kansans live in rural areas and 
depend on the local hospitals serving their community. Rural 
hospitals face a unique set of challenges because of our remote 
geographic location, small size, scarce workforce, physician 
shortages, higher percentage of Medicare and Medicaid patients, 
and constrained financial resources with limited access to 
capital.
    These challenges alone would make it difficult for many 
rural hospitals to survive. However, the increasingly 
burdensome Federal regulations that are being placed on 
healthcare providers make it difficult to budget, plan, and 
adequately prepare for the future.
    Today, I would briefly like to share some challenges 
specifically related to the Medicare policy on direct 
supervision of outpatient therapeutic services and the 96-hour 
physician certification requirement.
    First, I want to highlight the impact of Centers for 
Medicare and Medicaid policy for direct supervision about 
patient therapeutic services. This requires that a supervising 
physician be physically present in a department at all times 
when Medicare beneficiaries receive these services. This policy 
places additional unnecessary financial burden on my 
organization. Holton Community Hospital is staffed similarly to 
many rural hospitals across the Nation. Many have either a mid-
level provider staffing their hospital with a physician 
available for supervision or a physician readily available 
within 30 minutes response time.
    Staffing a physician onsite, as required by the 
regulations, will either result in changing our organizations 
then profitable bottom line into a negative bottom line or 
restrict the ability for us to be able to provide those 
services to our beneficiaries in our community.
    One example of an outpatient therapy service that is a 
significant impact to our beneficiaries is the ability to offer 
intravenous infusions on an outpatient basis. There is a 
growing need for this service throughout our community. Due to 
a noted increase in the last couple of fiscal years, 2013 and 
2015, this volume grew by over 22 percent. Not being able to 
provide this in our community and having the beneficiaries 
travel outside the community to receive this treatment would 
ultimately result in the beneficiary--a cost to them as well.
    I strongly encourage this committee to extend the 
enforcement delay on direct supervision requirements for 
outpatient therapeutic services provided in Critical Access 
Hospitals for calendar year 2015. I strongly encourage the 
committee to work to pass H.R. 2878, as well as legislation 
that would address this problem on a more permanent basis.
    A second area I would like to highlight today is the 96-
hour physician certification requirement related to the 
Medicare condition of participation on the length of stay for 
Critical Access Hospitals. The current Medicare condition of 
participation requires Critical Access Hospitals to provide 
acute inpatient care for a period that does not exceed on an 
annual basis 96 hours per patient.
    In contrast, the Medicare condition of payment for Critical 
Access Hospital requires a physician to certify that a 
beneficiary may reasonably be expected to be discharged within 
96 hours after admission to the hospital. As a rural hospital 
administrator, I can say with certainty that the discrepancies 
between the conditions of participation and the conditions of 
payment have caused nothing but confusion and challenges for 
Critical Access Hospitals.
    This regulation also impedes the ability of the person who 
knows the patient best--the physician and other healthcare 
providers--and may unnecessarily cause patients to leave the 
community from which they live to receive care. I urge Congress 
to pass the Critical Access Relief Act, H.R. 169, introduced by 
Representative Adrian Smith, Lynn Jenkins, Todd Young and Dave 
Loebsack. This legislation would remove the Medicare condition 
of payment that requires a physician to certify that a patient 
is reasonably expected to be transferred or released within 96 
hours but would leave in place the Medicare condition of 
participation requiring Critical Access Hospitals to maintain 
an average annual length of stay of 96 hours or less.
    On behalf of my organization and similar rural 
organizations across the States of our Nation, I want to 
reinforce that it is critically important that our communities 
are able to access quality healthcare services. Too often, 
increasing and unwarranted Federal regulation burdens add 
additional challenges to providers with already constrained 
resources. As I highlighted in my written testimony, I have 
many examples of great outcomes that beneficiaries receive due 
to the ability to access care in a timely fashion. I am honored 
to join you today to discuss the action Congress can take to 
address rural healthcare disparities created by Medicare 
regulations. I would be happy to answer questions.
    [The prepared statement of Ms. Saia follows:]
   
   
   
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    Chairman BRADY. Thank you.
    Mr. Derksen, you are recognized for 5 minutes.

STATEMENT OF DANIEL DERKSEN, DIRECTOR, ARIZONA CENTER FOR RURAL 
                    HEALTH, TUCSON, ARIZONA

    Dr. DERKSEN. Chairman Brady, Ranking Member McDermott, and 
committee members, I really do thank you for your service on 
this very important issue. But, especially, I want to thank 
you--thank you, thank you--for getting rid of that awful 
sustained growth rate formula, so we don't have to come back 
every year and do the doc fix.
    I am particularly gratified as a family physician myself in 
the last 30 years to see a nurse and physician on this 
committee. I think it is very important when we inform policy 
that we have Members of Congress that understand what it is 
like to be in the trenches serving patients.
    I want to hit on a couple of issues. I am a family 
physician. I work in an academic health center. I ran a faculty 
practice plan, the worst 2 years of my life--I call it the 
``thousand points of veto,'' with 550 faculty members and 450 
resident physicians; everyone felt like we could do things a 
little differently than we were. I think it is particularly 
important as we look at how professions education is, how do we 
get a better return on our Federal investment? We are spending 
$15.5 billion on graduate medical education in this country. 
Thank you for that investment in higher education. But I think 
we could get a better return on that investment. I think we 
need to move from protecting the status quo and holding 
harmless. Let's hold accountable.
    I think we can do better in the $10 billion we are spending 
in Medicare GME to diversify our investment portfolio to 
include, for example, teaching health centers, which you also 
renewed as part of the MACRA legislation to extend teaching 
health center funding for another 2 years. In comparison, we 
only spent $230 million over the last 5 years in teaching 
health centers, which is really to improve the health 
profession's workforce in rural areas.
    Some States, including in New Mexico and Arizona in the 
Southwest, are experimenting with I think very innovative 
models in interprofessional teaching health centers, leveraging 
Medicaid graduate medical education to achieve better outcomes.
    You have heard about some of the arcane rules that make it 
very difficult for rural hospitals and Critical Access 
Hospitals to maintain and keep their doors open and provide the 
services that are so important to rural hospitals. I think the 
two-midnight rule, the 96-hour rule really undermine a 
physician's judgment. You don't always know, having admitted 
hundreds of patients in both urban and rural hospitals myself 
in 30 years of practice, how long it is going to be for someone 
to be there. I think it is reasonable as a condition of 
participation to, on average, have 96 hours' admissions for 
Critical Access Hospital, but it is unreasonable and unfair to 
make it a condition of payment that if someone exceeds 96 hours 
in a Critical Access Hospitals that they won't get paid.
    As I was getting on the plane in Phoenix, I got a series, a 
flurry of email messages from one of our rural hospitals, our 
Critical Access Hospitals, on U.S.-Mexico border. Cochise 
Regional serves 20,000 individuals in a county that--its land 
mass would contain both Delaware and Connecticut. It is a very 
large area. It is critical. They will close their doors on 
Friday because Medicare stopped payment to them.
    The glacial appeals process will often put a rural hospital 
under because it takes so long to work through the appeal. We 
have seen over the last 5 years, 54 rural hospitals close 
according to the Sheps Center. There is another 283 that are on 
the verge of closure, at risk of closure, including hospitals 
in States that you all represent. Fourteen of you represent 
States that either have hospitals that are closing, especially 
in Texas, but also in other areas as well.
    I think we need to basically streamline that appeal 
process. We need to make sure that those auditors, such as the 
RAC auditors, that are paid on a contingency fee, that there is 
a penalty when they make a mistake and that we don't put our 
rural hospitals at risk of closure by this glacial process.
    The last thing I would say is there are some very good 
models you can draw on. You heard some last week from Mr. 
Miller in the MedPAC about how we might better invest our GME 
dollars. There is certainly some wonderful suggestions in the 
Institute of Medicine report about how we might do this. But I 
think there is also some interesting models happening at the 
State level, but we have to titrate these changes that we are 
requiring of rural hospitals on quality reporting. We have to 
make sure that when they report on quality and their payment is 
tied to it, that they are ready to do that. I think Arizona, 
for example, through its Medicaid program has a Critical Access 
Hospital pool and a rural pool that could be modified slightly 
to pay them on the basis of value and outcomes. I think these 
issues would really help us move forward in providing the 
access in our rural areas, create great jobs in those areas and 
continue that 24-hour-a-day, 7-day-a-week access to care that 
is so important in our rural communities. Thank you.
    [The prepared statement of Mr. Derksen follows:]
    
    
   
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    Chairman BRADY. Thank you, Dr. Derksen. I agree with you. 
We need a new path forward on graduate medical education. And I 
think we need to recognize the changes in indirect medical 
education, the number of procedures that are occurring, 
outpatient versus inpatient, making sure we are really getting 
dollars to those who are providing the education and training 
for our future doctors.
    So, Mr. Joslin, I have a question for you in a second about 
increasing risks in positions and rural hospitals. But, Ms. 
Sorensen, Ms. Saia, and Mr. Derksen, Critical Access Hospitals 
easily meet their annual average 96-hour condition of 
participation. But asking local doctors to certificate the 
specific patient's needs won't require a 4-day stay or less is 
creating we think some real difficulty among our Critical 
Access Hospitals.
    So can you--for the committee's insight--can you provide 
some examples of what services typically fall well under the 
96-hour rule and examples of some services that typically are 
well over the 96-hour limit? Ms. Sorensen?
    Ms. SORENSEN. Typically, we see a lot of the outpatient--
excuse me, not outpatient, but surgical procedures that would 
be done in our facility by the qualified providers that we 
have, maybe a bowel resection, maybe something related to a 
surgical removal, gallbladder, some of those things that didn't 
take--the bowel resection, obviously, always follows typically 
a 5-day stay. So when we admit on that day, yet we are supposed 
to precertify for 96 hours. Yet we are capable of doing those, 
we go through the proper training and competencies and surveys 
to do those, but for us to send them 150 miles away to get that 
done and not being able to come back to us is a big impact. 
Otherwise, we, obviously, have an annual average--our annual 
average runs around 70 hours so we see a number of those things 
that fall underneath that--the pneumonias, the other types of 
just acute illness that come in.
    The biggest issue becomes if you send in a culture, test 
the infection, and it comes back something you weren't 
anticipating; now we need to change the medication, and so we 
are switching from one antibiotic to another. And now we are up 
on 96 hours, so what are we going to do? Are we going to go 
into a swing bed for a short stay because if we go there for a 
short stay, that is also a red flag? So we create a lot more 
barriers by having those issues.
    Chairman BRADY. Great examples.
    Ms. Saia.
    Ms. SAIA. I would just add on, pneumonia is a great example 
where if it is simple, treatable, and you get the right 
antibiotic on the right day, that is easily treated within a 5-
day stay. But if you have to culture on the second day, 
sometimes that culture usually take 72 hours to get the results 
back. There you are at your 5-day window. If you need to wait 
and see if you need to change the antibiotics to make sure it 
responds appropriately, you are past the 5-day window. Just 
another example where usually pneumonia can be treated very 
easily upon admission. The physician could certify they could 
be treated and discharged within 5 days, but during those 
first, 2, 3, days, if they are not responding to treatment and 
you need to change treatment, then you are past that 5-day 
window.
    Chairman BRADY. Makes sense.
    Dr. Derksen.
    Dr. DERKSEN. Thank you, Mr. Chairman.
    I ran an academic Locum Tenens Program, where we provided 
practice relief in our rural hospitals and emergency 
departments across the Southwest. And one of the things we 
noticed is things, like pneumonia, congestive heart failure, 
routine urosepsis, people with urinary tract infections that 
spread to their bloodstream, acute stroke, acute trauma, many 
times these are things that we could either treat or treat and 
then move on to a higher level of service in that 3-day 
timeframe, but you don't always know. A person could come in 
with a simple, straightforward immunity-acquired pneumonia, and 
then, because they are dehydrated, they develop acute renal 
failure. And you may not have the lab results back quick enough 
to be able to know right at the time that they are going to 
take another day or two until they are ready to go back home. 
So those are some examples. Thank you.
    Chairman BRADY. So the point isn't the average of 96 hours; 
it is the specificity on every case where the patient may have 
some different needs that are just evolving as you are treating 
them.
    Auditing, from Ms. Sorensen and Ms. Saia, I have heard 
mixed feedback regarding how CMS is auditing around the 96-hour 
COP for Critical Access--can you describe your experience, if 
any, with the surveyor who has audited your hospital around the 
96-hour rule?
    Ms. SORENSEN. Chairman Brady, I don't believe we have had 
any experience with an audit on that as of yet.
    Chairman BRADY. Well, I am sorry I asked that question for 
your organization.
    Ms. Saia.
    Ms. SAIA. I am sorry you asked that, too. We have not been 
audited with regards to the 96 hour. I did before, in preparing 
for the testimony, went back and looked through 10 years of our 
submissions of where did our annual average end up for that 
year in regards to the length of stay, and the max that ever 
our average was, was 4 days, around 72 hours, so we have not 
been audited.
    Chairman BRADY. Oh, I am sure you will be on someone's list 
now.
    Again, really sorry about that.
    Chairman BRADY. Mr. Joslin, last week, the committee heard 
testimony from Mark Miller, the executive director of MedPAC. 
He testified that increasing residency positions for hospitals 
in rural areas doesn't necessarily translate into those 
residents staying in rural areas. My experience has been, in 
Texas and our district, has been the opposite. Your thoughts, 
other than increasing the number of slots, what would you 
recommend to us to do to incentivize physicians trained in 
rural areas to stay there and practice medicine because it is 
so critical for communities like ours and certainly those on 
the subcommittee.
    Mr. JOSLIN. Yeah, absolutely, it is such a critical issue 
because underserved areas are so difficult to recruit 
physicians to in the first place. Obviously, the economics play 
a major role in that. And so you have to have other ways to get 
physicians there. I am not familiar with the testimony of the 
MedPAC individual.
    Although, my experience has been different. My experience 
has been when you do provide training and additional training 
in those areas, a large percentage of those residents do stay. 
If you look at us, for example, over the last 40 years, we have 
trained 3,000 residents, and a 1,000 of them have stayed in the 
Valley. They don't just stay in Fresno; they stay in these 
outlying rural areas. We serve a 15,000 square mile radius, a 
large geographic area. And a lot of that is underserved and 
rural, and that is where the physicians are staying. Over the 
last 4 years alone, we have had 120 of those residents stay and 
practice in these rural areas.
    So I would argue that training does pay if it ends relative 
to the physicians staying in these areas. At least our 
statistics show that at least 30 percent of the physicians that 
we train do stay in these areas. So I think that is critical. I 
do think there are other things and creative ideas that are 
being suggested and how we can provide specific training in 
these rural areas that also supplements the GME, slots that are 
currently available. It is not just funding additional slots, 
but certainly looking at the way those slots are allocated 
within States, which is a huge problem for us. In California, 
for example, if you look at California, relative to the Central 
Valley, it is very skewed because the Central Valley is the 
poorest area. As I mentioned earlier, it is about the fifth 
poorest area in the country, but when you factor in Los Angeles 
and San Francisco, the numbers are very skewed. And so you have 
to also then start looking within States and looking at 
underserved areas within States. And our area is a perfect 
example. In central California, we have 48 primary care 
physicians per 100,000 residents. In San Francisco Bay area, 
they have 85, and so, obviously, there is not the same dire 
need in the San Francisco Bay area, and I am not minimizing 
their issues by any means. I am simply saying that when you 
look at how you are provided slots, I mean, there are two 
issues associated with that. Certainly there is the number of 
slots you provide, but certainly just as important is how you 
allocate those slots. And really the whole intent of this 
program is to help get physicians in underserved areas. There 
has to be a key component of that. Our slots have been captive 
since 1997, and that issue needs to be respectfully revisited 
so that these underserved areas like ours can do something 
because if we don't, they are going to continue to do what they 
are doing today, which is just showing up in the emergency 
room.
    Chairman BRADY. Thank you, Mr. Joslin.
    And, Dr. McDermott, you are recognized.
    Mr. MCDERMOTT. Ms. Saia, you testified before the--you 
reported in a Topeka news report saying, quote: ``If Medicaid 
would expand, it would be over a $300,000 impact of Holton 
Hospital, where some years that is the difference of us being a 
profitable hospital or not.'' Would you tell us how expanding 
Medicaid would make it better in your State?
    Ms. SAIA. How--could you ask the question again?
    Mr. MCDERMOTT. What percentage of your patients come in 
with no insurance, no anything? I mean, what I am trying to get 
at, Governors who made a decision not to do Medicaid expansion 
leave you hanging out to dry in the rural areas, with people 
coming in who are sick and you can't turn them away. Tell me 
about the problem of your hospital.
    Ms. SAIA. So expanding Medicaid in different pockets and 
different service areas, the emergency department is where our 
largest volume of uncompensated care is given, and that 
percentage is right around 20 percent, which is smaller than a 
lot of other facilities, but that 20 percent is directly 
written off as uncompensated care.
    Mr. MCDERMOTT. How much money is 20 percent?
    Ms. SAIA. Twenty percent of our emergency department 
volumes? I would have to submit written testimony back to you. 
If I could get back to you----
    Mr. MCDERMOTT. I would appreciate that.
    Ms. Sorensen, you said before the Nebraska legislature a 
reduction in uncompensated care and cost shifting, better work 
health, and fewer bankruptcies, less ACA penalties for business 
owners, a shift of some of the States direct cost to Medicaid 
would generate billions of dollars in Federal money. Tell me 
what does not being in Medicaid in Nebraska does for you?
    Ms. SORENSEN. For us, it is really the economic impact that 
we have. So in our small rural community, we are 70 percent 
Medicare and what percentage of that then are also Medicaid, 
even just in the impact of we recently had our local nursing 
home close within our community, which was about 70 percent 
Medicaid as well as. So when we have that high level of care, 
that high continuum of care needed within that age and that 
population, that is the impact that we see, so now those aren't 
even in our community.
    We don't have a real high percentage of Medicaid in our 
community. We run about 10 percent Medicaid, 8 percent self-pay 
in there, but really it just becomes more, as he mentioned, 
showing up and the access to the care. So now we are not 
getting in and doing the preventative screening. We are not 
doing the wellness pieces. We are just showing up in the ER for 
nonemergent cases, where the highest cost of care is given.
    Mr. MCDERMOTT. When you have a stroke patient in your area, 
do you have a lab to test whether they should be given an 
infusion of medication to dissolve the clot?
    Ms. SORENSEN. We do laboratory testing and CT scan at the 
point of arrival. Of course, with our distance, we are 
typically arranging for that transfer as soon as possible. And 
then, in Nebraska, we are utilizing some of the stroke cares 
that they are doing through the University of Nebraska Medical 
Center and pushing into all of our facilities on the most 
timely amount of care. And so we do stock the medications, but 
it also depends on we have to make sure they are stable before 
they go on that lengthy of a transfer.
    Mr. MCDERMOTT. And do you use helicopters, or do you use 
just ambulances?
    Ms. SORENSEN. Both. It depends. We have seen more air 
transfers out this year. It is as much as it was last year, 
already at this point halfway through the year. Some of that 
has been due to acuity. Some of that has also been due to time 
issues. So but, yeah, we have about 65 transfers that go out a 
year. And last year we only had about 14 that went by air, and 
we are already at 14 so far this year.
    Mr. MCDERMOTT. And if I understood your answer to Mr. 
Brady's question, neither of you have been audited so you are 
not exceeding or you have not come up on the radar screen at 
Medicare headquarters overextending your 96 hours. Is that 
right? Is that what you are telling me?
    Ms. SORENSEN. Yes. I would say we have not been audited 
specifically for the 96-hour per stay. Of course, for all of 
our fiscal years, as Ms. Saia mentioned too, our average annual 
is well under the 96. So I don't think that would probably be 
something----
    Mr. MCDERMOTT. Why is it a problem? Everybody says it is a 
big problem; we have to got to get rid of this 96-hour rule. 
But you never--you don't exceed it in your average, and so I am 
trying to understand, give me some examples of patients, you 
know, where it became a problem.
    Ms. SORENSEN. Absolutely. The biggest issue is going to be, 
of course, the annual average falls in okay, but if we had a 
patient that had a surgical procedure----
    Mr. MCDSERMOTT. Surgical procedure done there at your 
hospital?
    Ms. SORENSEN. Yes, like a bowel resection or something, so 
they will be admitted into that acute status, but we already 
know ahead of time, they will probably be there for 5 days, 
just to get things back up and going and medically stable and 
everything, get them back to eating normal. And so with the 
per-stay condition of payment, that has been said to be 
enforced, that is where if we are certifying or precertifying 
they are going to be there less than 96 hours but really we 
anticipate them to be longer, we are not going to get paid for 
that stay.
    The same thing happens--and maybe Ms. Saia wants to comment 
to that--in a pneumonia case, where we will admit on day one, 
doesn't seem to be responding to it, get the culture, something 
comes back. It comes back unexpected and we need to change 
medication. So now, even if we did precertify we reasonably 
expect them to be there less than 96 hours, now we are already 
at 90 hours; we need to change the medications. Are we running 
that risk? We are not even going to get paid for that entire 
episode.
    Mr. MCDERMOTT. Mr. Chairman, I realize you have given me a 
little extra time here. I would like to submit the CMS rules on 
the 96-hour rule for the record. The rule explains that CHAs 
still get paid after 96 hours if the patient still needs care. 
Nobody is denied care. Nobody is denying payment apparently. So 
I would like to submit that for the record.
    Chairman BRADY. Without objection.
    [The information follows:]
    
    
    
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    Chairman BRADY. And, clearly, we appreciate the witnesses 
being here today. Usually witnesses come because there is a 
problem, especially when it deals with treatments for patients 
in real life. Today's hearing is about drawing some of those 
insights out, see how we can address them.
    Mr. Johnson, you are recognized.
    Mr. JOHNSON. Thank you, Mr. Chairman.
    Thank you all for testifying today, and I appreciate you 
for being here. My district in Texas is right outside of Dallas 
and fairly suburban, but no mistake, I still understand the 
importance of our rural and critical access hospitals. You 
drive just one or two counties away, and you are going to find 
rural hospitals, and rural hospitals cover about 85 percent of 
the Texas geography.
    Medicare has long had the so-called 96-hour rule, and some 
of you covered that in their testimony, but for years, CMS has 
enforced that rule based on the average patient's stay. But now 
CMS has changed their enforcement to require doctors to certify 
for each and every patient that they do not expect the patient 
to be there more than 96 hours.
    Changing from an average of 96 to requiring certification 
for each patient doesn't at first sound like a big deal, but as 
you know and we have been talking about it, the implications 
are significant.
    Ms. Sorensen and Ms. Saia, could you discuss how this 
change to the 96-hour rule has impacted your hospitals, both 
from a financial and operational standpoint? And could you also 
address in what circumstances a patient might have to be at the 
hospital for more than 96 hours? And what happens if a patient 
is admitted for more than 96 hours? One at a time go ahead.
    Ms. Sorensen.
    Ms. SORENSEN. I would just comment to the example I gave a 
little bit earlier relative to pneumonia and a change in 
medications. A surgical procedure where there was a bowel 
resection or organ removal, biopsy excision, those types of 
things that may alter that. Also just the usual if treatment 
doesn't go as planned and a medical care plan needs to be 
adjusted or modified to improve patient status.
    Mr. JOHNSON. Go ahead, Ms. Saia.
    Ms. SAIA. As previously mentioned, the regulation is 
confusing and conflicting from the condition of participation. 
So to be able to abide by the regulation as it stands, the 
physician must certify that they do not believe the patient is 
going to stay longer than 96 hours. So if--and my understanding 
and I may be corrected--but my understanding is that the 
payment would not occur after 96 hours, and therefore, we would 
need to ship the person from our facility to a larger facility 
that could care for that patient, that is taking--would impact 
the patient as well as where they are getting their care. So it 
would move their community--their loved ones to another 
facility if we are unable--are those buzzings me, I am sorry--
if we are not able to care for that patient past that 96 hours, 
and you just never know. You don't have a crystal ball that 
tells you the answers as a provider upon admission what is 
going to change during that course of stay. So, with the 96-
hour, the understanding and trying to enforce that and abide by 
that, the understanding is that they need to be transferred if 
their care needs longer than 96 hours.
    Mr. JOHNSON. Were you all geared up to do that? I mean, you 
don't have an ambulance on standby just to take somebody to 
another hospital, do you?
    Ms. SAIA. No.
    Mr. JOHNSON. I didn't think so. And I think that is crazy 
to even think about, don't you? But do you get paid if they are 
over 96 hours?
    Ms. SAIA. Do we get paid? Well, so far, the enforcement of 
that has been delayed, so we are not upheld to that current 
standard right now.
    Mr. JOHNSON. Okay.
    Ms. SAIA. We are just upheld to the condition to 
participation, not of payment.
    Mr. JOHNSON. But they are pushing you to do that.
    Ms. SAIA. Pushing and we with like you to push for the 
delay to continue and look at a more permanent fix. If we are 
not able to delay that, could we at least look at a permanent 
fix for that?
    Mr. JOHNSON. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman BRADY. Thank you.
    Mr. Thompson, you are recognized.
    Mr. THOMPSON. Thank you, Mr. Chairman.
    And thank you to all the witnesses for coming. It has been 
good testimony. And I know you guys--I represented a rural area 
for most of the time I spent both in the State legislature and 
in Congress, so I know some of the challenges you have. And my 
wife is a healthcare provider in a rural hospital in my current 
district. And so I know very firsthand how challenging it can 
be. So thank you for helping us understand the problems and 
trying to figure out some solutions to the challenges that you 
face.
    I am a big supporter of telemedicine and telemonitoring. I 
have had a number of pieces of legislation that has helped 
advance this. Mrs. Black and I have legislation in this 
Congress to help move that forward again. And I think it is a 
way we can address a lot of the problems that we face. So I 
would like to know how your hospitals are using--if they are 
using, and if so, how they are using both telehealth and remote 
patient monitoring?
    Start with Mr. Joslin. You don't have to do a thesis.
    Mr. JOSLIN. Okay, thank you. We are a safety net hospital, 
and we work with the rural hospitals closely. In fact, we 
receive about 600 transfers a month from outlying hospitals. 
However, we do use telemedicine quite a bit as well. We do it 
through the University of California, San Francisco, and with 
their specialists as well. But we have been using telemedicine 
for the last several years as a key component of the care that 
we are providing to help rural hospitals in outlying areas and 
physicians and clinics as well, to extend that to as many 
providers as possible. Because with what is going on in health 
care, the need for population health, how we look at 
redesigning the system, it is not just hospital to hospital, 
hospitals to physicians, but there are a lot of other types of 
providers, and telemedicine is a critical component of that 
piece as well.
    Ms. SORENSEN. I would agree we are a big proponent of 
telehealth. We use tele-emergency, so we have board-certified 
emergency docs in our emergency room at the push of a button 
24/7. We also have remote pharmacists that oversee 100 percent 
of our inpatient medications. Teleradiologists, as well as just 
the one-on-one patient visits, many of them are used for 
oncology with an occasional orthopaedic followup. Psychology of 
course.
    The biggest barrier that we have in telehealth is getting 
the physicians themselves into a scheduling routine and access 
to the electronic devices so that they either can do it right 
from their desk or an examine room in their clinic. And then, 
of course, reimbursement issues that come into the challenge as 
well. They are often not willing to see the patient via 
telehealth because of the reimbursement and payment issues. So, 
therefore, our patients drive 2\1/2\ hours for that 10-minute 
visit that could have been done via telehealth.
    Ms. SAIA. We are currently not using telehealth services, 
but supportive of that. We are currently looking at meeting the 
needs of our community in regards to mental health and 
exploring opportunities with a couple of different companies 
for telesite coverage.
    Mr. THOMPSON. So you see it as something you can use or 
maybe should be using as something that can bring some relief.
    Ms. SAIA. Yes.
    Dr. DERKSEN. In Arizona, we were able to get legislation 
through for payment parity, so that insurers would be paying 
for telehealth services. We use it for teleradiology and places 
that can't afford to----
    Mr. THOMPSON. The non face-to-face reimbursement.
    Dr. DERKSEN. Exactly. So it has been very important, but it 
is also important to strike that balance between making those 
services available in rural communities, but making sure that, 
through licensing, credentialing, and privileging, that we 
assure the high quality of services that are available onsite. 
We don't have these kind of folks coming in from other places 
that undermine the fiscal viability of a place because someone 
else is kind of taking those services out of that community.
    Mr. THOMPSON. A couple of you kind of alluded to some 
things, but are there any things specifically that would help 
you do more or better telehealth? Are there any roadblocks that 
Medicare reimbursements provide, or is there anything that 
Congress can do to help you better perform telehealth services?
    Ms. SORENSEN. I would like to be able to provide written 
testimony with some more information because I need to look 
into that. But I know that just at a conference that I attended 
last week looking at that face-to-face reimbursement rate and 
what can actually be billed via that, there is a lot more 
opportunities available via telehealth, but right now we need 
to get that face-to-face reimbursement rate equal in 
telehealth.
    Ms. SAIA. If possible, I would like to provide some 
additional testimony as well. We have looked at the tele-
emergency coverage, and just the cost upfront I am told the 
cost of the salary of one FTE of a nurse. That is a little 
bit--when I was originally told that, that is probably less 
than what our current salary makes--it was closer to around 
$80,000. And just being able to come up with that, making sure 
that we have got the adequate room in our emergency department 
is also a concern as well, so I would provide more written 
testimony on that.
    Mr. THOMPSON. Thank you. I would invite to you get that 
written testimony, and I would be very interested in seeing it.
    I don't know if the committee wants it, Mr, Chairman, but I 
sure would like to get it in my office.
    Mr. THOMPSON. Thank you very much.
    Chairman BRADY. Mr. Smith, you are recognized.
    Mr. SMITH. Thank you, Mr. Chairman.
    And certainly thank you to our panelists here today, our 
witnesses. I most admire your abilities and willingness to be 
on the frontlines of health care that are, I am sure, 
difficult. I don't pretend to think that the answers are here 
in Congress or even that there would be a bunch of answers in 
just increasing funding for some broken mechanisms in health 
care. I think that these arbitrary regulations that have come 
about, whether it is the 96-hour rule, whether it is the 
physician supervision, to keep those in place and just expand 
Medicaid, as some would suggest a solution would entail, I 
think we owe our providers a better policy than that out of 
Washington, D.C., that really entrusts our providers.
    And, certainly, Shannon, thank you for being here, for 
traveling from very rural Nebraska to share your expertise, 
your insight. We know that Brown County Hospital is the only 
hospital in the county, hence the name. But the county has a 
land mass larger than the entire State of Rhode Island, and it 
happens to be next door to Cherry County, that is larger than 
the State of Connecticut, and it, too, only has one hospital.
    So just to try to identify what the issues are here, we 
know the Critical Access Hospital designation I think is an 
effective component of our policy. But we ought not assume that 
every Critical Access Hospital has the same level of care or 
the same skills that are within that facility or the same 
community profile. And we need some flexibility.
    That is why I have introduced the 96-hour rule, as well as 
the physician supervision bill that would push back there. 
These are arbitrary. I have a hard time even figuring out how 
they came about or why they came about. That story has not been 
told. But I do know that the 96-hour bill is a very bipartisan 
solution, with some 70 cosponsors, very bipartisan like I said. 
And these concerns are across America and I would say even in 
more urban areas too. Just the impact seems to be felt more at 
the rural level.
    Now, there were some questions about audits. I mean, 
certainly I assume you have been audited but just not for 96-
hour, right, I see strong nods in agreement, yes. So the RAC 
auditors, that was mentioned as well; that needs to be 
addressed. I am glad that telemedicine was brought up. I think 
that telehealth probably even adds to the need to address this 
96-hour rule that is arbitrarily out there.
    Do you want to elaborate a little bit on the audits that do 
take place, Ms. Sorensen or Ms. Saia.
    Ms. SORENSEN. Absolutely. We have had audits for claims, 
overall episodes of care, what would be considered RAC. Our RAC 
activity has not been real high. But we definitely have had 
audits. And these are very laborious. They are intensive in 
terms of submitting a number of additional supporting 
documentation and often for claims that we feel were 
unnecessarily audited or reviewed to look at in more detail. In 
all of them--and we have even gone to the level of having to 
appeal at the administrative law judge level. And the times 
that we have done that, we have been successful in appealing 
those but have not gone without much effort, time, and 
resources that has been needed to do that.
    Mr. SMITH. Ms. Saia.
    Ms. SAIA. We have been involved with a variety of different 
audits, the compensated care issue you mentioned previously. 
But our RAC audits have not, we have not had a lot of activity. 
There have been a very few small claims. But the time involved 
with reviewing those, making sure that claims were correctly 
submitted is very time-consuming. We have not been successful 
in two of them, in overturning the audit results. But, again, 
the activity has not been extremely high in regards to that.
    Mr. SMITH. Okay. Thank you. And I do want to certainly 
emphasize the diversity of Critical Access Hospitals. As Ms. 
Sorensen said, there is one doctor for the entire hospital, the 
entire community, the county. Now, some Critical Access 
Hospitals would have 10, 15 docs, maybe, offering a different 
level of services. So 96 hours of care could mean different 
things in different communities. And I would hope that we can 
get our policies to reflect that.
    Thank you, again, to our witnesses.
    Thank you, Mr. Chairman. I yield back.
    Chairman BRADY. Thank you.
    Mr. Davis, you are recognized.
    Mr. DAVIS. Thank you very much, Mr. Chairman.
    And I want to thank all of our witnesses.
    You know, I was thinking, I grew up in rural America. 
Although I represent a large urban population, I have always 
had a great deal of affinity and, hopefully, some understanding 
of rural America's needs as it relates to health care. In my 
family, we often discuss the fact that we believe that my 
mother may have died prematurely because she had to travel more 
than 150 miles to get to a regional medical center where she 
could get dialysis treatment.
    I am a big fan of regional medical centers like the ones, 
Mr. Joslin, that you come from and represent. But I also 
recognize that in training, we need to train the best 
physicians that we possibly can, not only in principles and 
concepts of medicine, but also there has to be enough 
opportunity for the individuals to experience disease entities 
enough times to, I mean, I always like physicians personally 
that I feel have seen a lot of patients like me and that, in 
the process of doing so, probably has a better understanding of 
whatever it is that I am there for.
    In terms of finding a solution to obviously a very 
difficult problem, I mean, we look at reimbursement, and I 
think that reimbursement rates that are different based upon 
the complexity of small numbers of people that an entity might 
be able to see is something to consider. Obviously, 
telemedicine, as it continues to advance, and other types of 
incentives, how do you feel that these incentives can be 
tweaked enough or couched enough to really make a serious 
impact on the ability to recruit physicians and other medical 
personnel for the rural areas that are having the difficulties 
we are discussing?
    Mr. Joslin, perhaps we could start with you.
    Mr. JOSLIN. It is a great question. I think there is two 
parts to that question. There is the question of how you tweak 
the system, but I think you have to start out with the 
fundamental realization that the system is flawed because the 
system is just not--it doesn't produce enough. And we touched 
on it earlier. We touched on the number of slots, and we 
touched on how these slots are allocated. And then trying to 
provide some type of incentive for physicians to want to go and 
train in these areas, whether it is financial incentive for 
educational purposes or however you structure something, but 
the shear magnitude of the issue is just the lack of enough 
slots in these underserved areas that there is really no 
effective way to move the pieces around until we solve that 
fundamental problem. And I think we have to be creative to do 
both because obviously there is not unlimited resources. We 
don't have the ability to just keep adding. We have a deficit 
issue we need to tackle. And so we need to deal with those 
types of creative things. And I think those kinds of answers 
are going to come in the bigger answer of how we are going to 
effectively redefine this healthcare system, to develop a 
marriage or partnership between those regional medical centers 
you referred to, safety net facilities, and those rural 
facilities, and partner with all the other, not only physicians 
but other healthcare providers that are out there providing 
these types of resources, there is going to ultimately have to 
be a different type of system developed so that we can really 
reallocate resources within a very limited system itself.
    Mr. DAVIS. Ms. Sorensen.
    Ms. SORENSEN. I think one of the most beneficial incentives 
that we have had really, for example, the meaningful use 
incentive, that pushed a lot of facilities into getting to the 
medical records so that we can get where we need to go. We are 
a long ways from getting where we need to go. But there was at 
least the jump into that. For us, from the telehealth 
perspective, for example, our e-Emergency that we have, so we 
have that board-certified ED doc at the push of a button in our 
ER 24/7. And it was a huge recruitment tool for us. We have 
recently recruited a family practice physician that will join 
us next year. And much of that is the comfort of knowing there 
is somebody there to support them. They are not practicing 
completely independent.
    So much of what Mr. McDermott mentioned earlier in terms of 
maybe incentivizing with loans or some type of an arrangement, 
in the State of Nebraska, we are looking at trying to help with 
student loans and contracts early on for recruitment purposes 
and incentivizing them for the services to our communities.
    Ms. SAIA. I don't know that I have anything additional to 
add in regards to incentives for recruiting. What has worked in 
our facility is being a rural area, where, upon graduation, 
there is a loan forgiveness for coming to our area. And that 
has worked for two of our doctors, one of our doctors, and 
three of our midlevels for reimbursement for staying in the 
area. What we have tried to do, though, is just have a great 
community and a great facility to work in where they want to 
stay after those 2 years. And that has been successful for us.
    Dr. DERKSEN. I would just like to say that I don't know 
about the MedPAC testimony that was provided last week related, 
but our evidence in New Mexico and Arizona is that when you 
train health professionals in rural areas, they are much more 
likely to go. In fact, when we decentralized our family 
medicine training and our dental residency training to include 
rural experiences, we doubled or tripled the rate of retention 
of practitioners going into practice there. It works for nurse 
practitioners. It works for dentists. It works for physicians. 
It works for allied health professionals. I think the evidence 
is incontrovertible. We have to invest in that health 
professions training infrastructure to move the health 
professions training pipeline closer to the areas of need.
    Mr. DAVIS. Thank you, Mr. Chairman.
    Chairman BRADY. Thank you, Mr. Davis.
    Mr. DAVIS. I thank you for the indulgence.
    Chairman BRADY. My pleasure.
    Ms. Jenkins, you are recognized.
    Ms. JENKINS. Thank you, Mr. Chairman.
    And thank you to the panel for being here today. A special 
thanks to Ms. Saia. We both hail from the great community of 
Holton, Kansas. I am sorry Senator Roberts isn't here. We could 
all join in the Holton fighting wildcat song. We appreciate the 
good work that you do, running our hospital, Critical Access 
Hospital. The community is only about a little over 3,000 
folks. And so the hospital is key to the success of our 
community.
    And there are few issues that I hear more about at home 
than ensuring access to quality, accessible, rural health care. 
And I believe this hearing is a very important step forward in 
addressing the problems that providers and patients face in 
rural America.
    Carrie, in your written testimony, you speak about the 
damaging effects that CMS' direct supervision requirement for 
outpatient therapy services would have on hospitals like Holton 
Community Hospital. And you mentioned your support for H.R. 
2878, the legislation that I have introduced on that matter. 
One example that you gave of a routine outpatient therapy 
service is intravenous infusion. Drawing on your nursing 
background, can you briefly describe what kind of patient might 
need an infusion and the process involved for the attending 
medical professional?
    Ms. SAIA. I would be happy to. There is a wide variety of 
examples. The one that comes to mind is a patient that is 
suffering from rheumatoid arthritis. They need an outpatient 
infusion for their medical condition. So they have been seen by 
their primary doctor. They have been referred to a specialist 
that comes to our facility and orders a medication. That 
infusion is usually one time a week for the course of 6 to 8 
weeks. And they would come in and need that infusion given 
intravenously. Another example could be blood component therapy 
or chemotherapy drugs are also different examples in regards to 
that.
    Ms. JENKINS. Okay, perfect. Thank you. Could you also 
describe the added burden that direct supervision puts on 
physicians and ways in which other hospital services suffer 
because of it?
    Ms. SAIA. With direct supervision, the regulation speaks to 
requiring a physician being readily or immediately available. 
So if that physician is involved with--Thursdays, we have 
stress tests in our facility. And a physician has to be 
physically present and cannot do anything else. So for that 
physician then to not be able to meet the requirement for 
direct supervision, if a patient is getting that infusion on 
that day, that would mean two doctors then would be tied up, 
one doing stress tests, one doing the outpatient infusion. And 
then what would suffer would be the care of just normal care in 
our primary clinics because we have two providers, two doctors 
tied up doing those two services.
    Ms. JENKINS. I see.
    Ms. SAIA. If that makes sense.
    Ms. JENKINS. It does. Before CMS announced that it was 
going to enforce the direct supervision rule, were nonphysician 
providers at Holton Hospital able to administer outpatient 
therapy services effectively without direct supervision?
    Ms. SAIA. They were. We have five different midlevels. They 
are all trained in advanced trauma life support, advanced 
cardio, CPR, advanced life support, trauma courses. They 
provide coverage for our emergency department. But, yet, with 
this regulation, they are not able to provide coverage for a 
person on an outpatient basis receiving an infusion.
    Ms. JENKINS. Okay. Thank you.
    I want to touch on another topic. Ms. Saia probably knows 
that Holton Community Hospital provides hospice services for 
folks who are very ill and likely near the end of their life. 
In fact, my own father spent his final days under the care of 
the hospice at Holton Community Hospital. And we find that 
patients are at their most vulnerable at that stage. And I 
worry that folks in rural areas may be limited by the fact that 
Medicare's list of authorized hospice providers is not as 
inclusive as it should be. And this could lead to gaps in 
access to those who may need hospice but are unable to get it.
    And I have introduced legislation, along with Mr. Thompson 
here on our subcommittee of California, which would recognize 
physician assistants as attending physicians to serve hospice 
patients. And I am just curious, maybe Ms. Sorensen and Ms. 
Saia, do you think that this legislation would help? And I am 
getting gavelled down. Maybe if you could----
    Chairman BRADY. Yes, briefly would be great.
    Ms. SAIA. I think it is being very futuristic and very 
supportive of trying to keep the hospice patient in their local 
community to receive that, important services, at a very 
critical time instead of having them leave their local 
community to receive it elsewhere. We are fortunate to have a 
medical physician right now available for that. But looking at 
the future and knowing the shortages, not only hospice, home 
health, DME, those type of services really could be supported 
with this legislation.
    Ms. JENKINS. Thank you, Mr. Chairman.
    Chairman BRADY. Thank you. No one ever calls my legislation 
futuristic and visionary, so congratulations.
    Mr. Pascrell, you are recognized for 5 minutes.
    Mr. PASCRELL. Thank you, Mr. Chairman.
    And I want to thank the panel for being so forthright. I 
want to remind the panel, as well as the Members of the 
Committee, Mr. Chairman, that on June 22, when we had our last 
hearing, Dr. Mark Miller was with us from MedPAC, gave us a 
report. And in that report, 80 percent of rural hospitals that 
have completely closed their doors are located in States that 
have not expanded Medicaid, et cetera, et cetera, et cetera. 
You know, we need to take the time to read the stuff that gets 
to us, Mr. Chairman. That is my point. Because I think many 
times, as Mr. Joslin says, you have got to get to the 
fundamental problems and ones that we do not want to address.
    So I agree that access to health care in rural areas is an 
awesome issue. It is worthy of the committee's focus. I come 
from North Jersey where the closest rural area is more than a 
stone's throw. But I ran point on rural hospitals in South 
Jersey. I am very proud of that record. Every day our New 
Jersey hospitals face challenges associated with serving urban 
populations. Medicare beneficiaries and other patients living 
in urban areas need access to quality health care, to provide 
economic opportunity, ensure community vitality, just like 
residents living in rural areas. I want everybody to be 
healthy. And I assert that access to care cannot only be 
measured by how long it takes you to drive to the nearest 
hospital or the nearest clinic, isolation from transportation 
services in urban areas can be just as prevalent and is, in 
reports that I have seen, as in rural. In my home town of 
Paterson, New Jersey, which is the third largest city in New 
Jersey, local hospitals care for a population where 29.1 
percent of the residents are living below the Federal poverty 
level--that is a problem--where the medium household income is 
$32,707--that is a big problem--and 62.5 percent of the 
households speak a language other than English. These issues, 
along with a number of others, like patient mix, a reduction in 
the disproportionate share of hospital payments, which we had 
in New Jersey, pose very real challenges for urban hospitals.
    But despite these challenges, urban New Jersey hospitals 
cannot receive any of the add-on payments that rural hospitals 
are eligible for. If we are going to look at this, let's look 
at it across the board. The State of New Jersey does not have 
any hospitals with Critical Access Hospital, Medicare Dependent 
Hospital, or Sole Community Hospital designations.
    Mr. Joslin, in your testimony, you painted a good picture 
of what your hospital's patient population looks like. Despite 
the fact that your hospital is located in a rural area, it is 
actually very similar to the patient population at St. Joseph's 
Hospital in urban Paterson, New Jersey. I compared it. You 
mentioned high rates of poverty, low education levels, and 
limited English. Can you discuss some of the challenges 
associated with this patient population?
    Mr. JOSLIN. Certainly. And your example is absolutely 
perfect. When you are looking at urban hospitals, their safety 
net providers in economically challenged areas, it is 
tremendously difficult to provide all those services that you 
need. In our area, a third of the adults don't graduate high 
school, a third. You know, a third of the children in our area 
are living at or below the poverty level. Twenty percent of the 
population doesn't speak English. We are in a huge metropolitan 
area, relatively speaking, Fresno County and the outlying 
areas. And there are tremendous challenges.
    So we have in common what these rural hospitals have in 
common, thin operating margins. And we live on the edge 
financially because there is not a lot of excess in the system 
of what we deal with, same thing that you are dealing with in 
your area. So we have to be very efficient. We have to 
cooperate with others. We have to take an integrated delivery 
approach to this so that if there are issues with 
transportation, for example, we can't just admit a patient to 
the hospital, discharge them, and say, ``Okay, now go your way 
because there are all these resources out there for you.'' We 
have to help provide all those additional resources, 
transportation, getting them to and from, skilled nursing 
facilities, home care, hospice, all these things we have to 
help facilitate as well. Because the challenge is--and we had 
$180 million last year in uncompensated health care, similar 
probably to what your hospitals have.
    Mr. PASCRELL. Yes. Mr. Chairman, just one more statement 
before I yield.
    Chairman BRADY. Quickly please.
    Mr. PASCRELL. We want to be fair to everybody. I want to be 
fair to everybody. What I want folks to know, I am never going 
to vote for any help for rural hospitals unless, instead of 
going into the pocket we already have and, therefore, those 
hospitals suffering, we need to expand the pocket. We need to 
expand Medicaid. And that is really at the bottom of many of 
the problems--you talked about getting to the fundamental 
problems. That is what I think we need to do.
    Thank you, Mr. Chairman.
    Chairman BRADY. Thank you, Mr. Pascrell.
    I would point out, I think hospitals are struggling with 
the $700 billion of cuts to Medicare, many of which landed on 
our community and rural hospitals. And they have been feeling 
damaged for quite some time. Today's hearing, I understand the 
point of Medicaid expansion, but the point today was really 
about listening to specific challenges they face and some 
proposed bills, bipartisan bills, we hope can help eliminate 
some of those concerns.
    So, Mrs. Black, you are recognized.
    Mrs. BLACK. Thank you, Mr. Chairman.
    Thank the panel for being here.
    Mr. Chairman, I would like to ask unanimous consent to 
submit a letter from the Equal Pay for Equal Care Coalition on 
behalf of the Tennessee Hospital Association concerning the 
hospital area wage index for the record.
    Chairman BRADY. Without objection.
    [The information follows:]
   
   
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    Mrs. BLACK. Thank you, Mr. Chairman.
    Mr. Derksen, I appreciate your testimony on the acute 
financial pressures that rural hospitals face because of 
onerous Medicare regulations and cuts in reimbursement. As you 
point out in your testimony, for hospitals and rural States, 
like Tennessee, the risk of closure is real. I represent, about 
50 percent of my district is rural, so we have a lot of those 
hospitals that are sitting in that situation.
    But I would like to bring up another challenge that is 
adversely impacting Tennessee hospitals, which is the Medicare 
hospital wage index. This issue hasn't received as much 
attention as those that have been identified in your testimony. 
But I believe that it will be receiving more and more attention 
in the near future as it negatively impacts these hospitals and 
potentially will mean closure for them as well, unless that 
reimbursement is changed. And although the area wage index is 
intended to ensure that Medicare hospital payments reflect the 
geographic differences in wages, many, including myself, 
believe that the system is broken.
    In fact, we had an exchange last week with MedPAC's 
executive director, Mark Miller, in which he agreed that the 
area wage index is neither accurate nor fair, and it needs to 
be repealed. So the area wage index is having an adverse impact 
on hospitals in Tennessee and other hospitals in rural areas. 
Thus, this letter that I am going to be submitting, which has a 
whole coalition of hospitals that are represented, mostly rural 
areas, all over the country. These hospitals have seen the area 
wage index levels rapidly decreasing over the years, while the 
levels for a handful of the others have been increasing. So I 
know this is going to be a difficult topic because some have 
seen significant increases, while others have seen significant 
decreases.
    And would you talk about repealing this wage index and 
replacing it with a more accurate and fair system that would 
help to relieve some of those financial pressures specifically 
on those rural hospitals that are in this situation?
    Dr. DERKSEN. Mr. Chairman, Representative Black, thank you 
for bringing up this issue. This is a crucially important issue 
in some parts of our country, including the area I work in in 
Tennessee obviously. I think we do need to bring some 
rationality to this. I think we need to bring some fairness. 
And I certainly appreciate your leadership on this issue. But 
there are complicated issues that need to be ironed out. And I 
admire the courage to bring this forward. Because whenever 
there is winners and losers, the stakes and the fights get 
pretty intense.
    But I think the issue is there shouldn't be winners and 
losers where large swaths of the United States, where 20 
percent of our population lives, are basically forced to accept 
these very low payments. I don't think it is just with the 
Medicare area wage index. I think there are some issues related 
to graduate medical education payments that are very, very low. 
When I was in New Mexico, we had the lowest per-resident 
amount. Why in the world, you know, is Connecticut or New York 
hospitals being paid nine times per capita what Texas is being 
paid for Medicare GME? I think the work that you have done in a 
bipartisan manner in this committee is exactly the kind of 
leadership we need. And I think that the types of things that 
you have proposed and have been talking about are, it is time 
for us to address these issues and to make this a much more 
rational policy. Thank you.
    Mrs. BLACK. You are welcome.
    One other issue, and I know I am not going to have enough 
time to really ferret this out, but I would like for the 
panelists, if they have an opportunity, to respond back in a 
written form about being able to use ACOs in rural areas.
    My colleague, Mr. Thompson, did hit on something that we 
are working on together on the telehealth, but also what are 
the barriers for using the Accountable Care Organizations where 
we could have more coordinated care? I know that we are seeing 
those maybe be successful in the bigger urban areas. But I 
would like to hear from you about where you believe that the 
barriers might be in also using ACOs, where we could actually 
have those alternative payment models and be able to coordinate 
the care. So if you could just let me know or let the panel 
know what is hampering those efforts, we would really 
appreciate hearing from you. So that would be another area we 
might be able to help our rurals in.
    Thank you, Mr. Chairman. I yield back.
    Chairman BRADY. Great. Thank you.
    Mr. Kind, you are recognized.
    Mr. KIND. Thank you, Mr. Chairman. Thanks for holding this 
hearing.
    I want to thank the witnesses for your testimony, your 
patience today. And just to follow up on that last point, I am 
glad Mrs. Black raised this issue, it was actually a question I 
was going to ask you in regards to challenges you face with 
ACOs, the implementation in rural areas. I hail from the State 
of ACOs. My healthcare providers throughout Wisconsin have been 
practicing a more integrated, coordinated, patient-centered 
healthcare delivery system for quite some time. What I am 
hearing from my Critical Access Hospitals, a lot of rural 
providers, is that there are some unique challenges that they 
face with the ACO model, medical homes, that more coordinated 
care. So anything you can provide our committee to provide some 
insights because I have been reaching out to my providers back 
home on this as well.
    Clearly, that is the direction that the Affordable Care Act 
is trying to drive the healthcare system, to more coordination, 
more integration in healthcare delivery services. But there are 
unique challenges that we recognize in rural areas. And that 
needs to be addressed as well.
    Let me shift and address a topic that hasn't been addressed 
yet today. Maybe you might provide some insights. Clearly, 
there has been increased consolidation in the healthcare 
industry in recent years. We are seeing more consolidation, 
with the bigger providers coming into rural areas, buying up 
hospitals and clinics. We are also seeing a huge amount of 
consolidation with health insurance companies right now. 
Obviously Cigna and Aetna are the latest in the news right now. 
But I wanted to get anyone's reaction on the panel today and 
these trends that we are seeing, the impact it could have on 
rural healthcare providers, both the access and the quality 
issues, if you would like to share with us today.
    Dr. Derksen.
    Dr. DERKSEN. Mr. Chairman, Representative Kind, I think 
where integration and consolidation results in quicker access 
to health care, to high-quality health care, or it reduces the 
rate of cost growth, or it improves health outcomes, and those 
are measurable health outcomes, I am all for it.
    When integration and consolidation means fewer choices for 
providers, for patients, and it increases the costs, I think we 
ought to look at those types of issues. And that is where I am 
kind of worried. In States where there is robust competition, 
for example, in the health insurance marketplace, such as 
Arizona, we have at least seven insurers offering 70 different 
plans in our 13 rural counties. That is a lot of competition. 
As a result, our premiums went down for silver plans 10 
percent. I think the marketplace can work, but it requires 
robust competition. I have noticed in other States with only 
one or two insurers, that those rates go up. And there is these 
kind of endless requests for increases in premiums. So I think 
there is some advantage to bring it together. I think rural 
communities and our community hospitals are looking to partner 
in ways through telemedicine, telepsychiatry, through 
teleradiology, and other mechanisms. We ought to encourage 
that. But let's keep the end in sight here. We want high-
quality care. We want ready access. And we want to control cost 
growth. And if those three criteria are met, then that should 
be kind of our litmus test to me.
    Mr. KIND. Mr. Joslin.
    Mr. JOSLIN. I think fundamentally the system is fragmented 
and broken. And I think you are seeing consolidations not for 
business purposes but for patient care purposes. And I think 
the only way we are going to fix this healthcare system is to 
partner together and develop new models that are much more 
effective in treating patients. If you do the same thing over 
and over and over again, obviously, you are not going to get 
different results. We have to get creative and look to doing 
things differently. So what I look forward to sharing with you 
in the coming months are a pilot that we are doing, for 
example, where we, in a large urban area, are partnering with a 
large provider in the rural area to develop an integrated 
network with access to care, I absolutely agree with you, 
access to care, the primary driver in this, to make sure there 
is a system there for everybody, regardless of resources, that 
is available close to where those patients are, and provides 
the different level of resources they need. But it has to be 
this new level of partnership if the mission is correct. And 
the mission has to be accessed to high-quality, affordable 
health care. And so you are going to see lots of these models 
pop up. Some will be good. Some won't be so good. But we need 
to learn from all of them and continue to work towards 
developing a better model.
    Mr. KIND. I would agree with both of those things.
    Mr. Chairman, this might be another topic ripe for a future 
hearing, as there are large forces taking place in the 
healthcare field and consolidation, both on the provider and 
the insurance side. And we are going to have to provide more 
oversight.
    And, finally, on the training aspect, Mr. Joslin, you talk 
about the importance of training in rural areas. I know, in 
Wisconsin--this might be true in your areas too--we are really 
making a concerted effort to try to recruit in rural areas 
before even training because we have found if we can get them 
from the rural community, from the quality of life they grew up 
in, it is easier to direct them back into those communities to 
serve in the healthcare function.
    So if you have got some unique programs that you have been 
working on as far as recruitment, we would be interested in 
hearing about that so we can take that to capacity.
    Thank you, Mr. Chairman.
    Chairman BRADY. Thank you, Mr. Kind.
    Mrs. Noem, you are recognized.
    Mrs. NOEM. Thank you, Mr. Chairman.
    And thank you for allowing me to take part in this hearing. 
I am not a normal member of the Health Subcommittee. But I 
represent South Dakota. And I have the entire State. So there 
is not much in South Dakota that isn't rural and doesn't face a 
lot of the challenges that you all have been discussing today.
    And I am glad that Mr. Kind touched on that because that 
was something I was going to point out that Mr. Derksen talked 
about earlier, was the fact that when you train physicians and 
caregivers in rural areas, they tend to come back. We have a 
very difficult problem with recruiting physicians to some of 
our communities in South Dakota. But we have noticed that if we 
have the training in those communities, if we have residencies 
available, that that makes a world of difference.
    So I want to thank you for discussing that today and 
putting that in the record because it is important to make sure 
that we have the kind of access to care that we need. And we 
have that by making sure there are physicians in the area. And 
I have visited many, many of the rural hospitals in South 
Dakota. I have seen the necessary care that they provide to our 
population and the people that live in my home and the patient 
population that they serve. In fact, a lot of my rural 
hospitals feel that many times they are treating patients that 
may be sicker, that may be older. We have a very--our 
population is much older than I think, on average, than some 
other States. And they feel like they have more challenges 
because of that than some of their urban hospital counterparts. 
And they outlined a number of the challenges that they face.
    And Congress and the administration have agreed that access 
to care is limited in these areas and communities. And people 
have to travel farther to get the kind of checkups and 
emergency services they need. And this can significantly 
increase the cost of health care and impact outcomes in 
emergencies when time is critical. In fact, research shows that 
rural residents travel twice as far to the closest emergency 
room than urban populations do. Rural communities face 
demographic challenges both with the Medicare population and 
the community population at large. You have discussed many of 
these issues today. And as a result of all of these challenges, 
a lot of our rural hospitals are operating at a financial loss. 
So what concerns me is how we will keep access to care in these 
parts of the country. And there are many things that Congress 
can do, and there are many proposals and bills that are filed. 
I would like to know from each of you what your biggest 
challenge is at keeping that access to care in those rural 
communities and a suggestion of what Congress, it may be a 
payment system, it may be a reimbursement formula, it may be 
different policies or regulations that cost you so much money 
in complying with them rather than delivering care to patients. 
What is your biggest challenge that Congress could immediately 
address that would be a relief to our rural community 
hospitals?
    We will start with Mr. Derksen.
    Dr. DERKSEN. Mr. Chairman, Representative Noem, thank you 
for bringing up these issues. I think it is very important. I 
spent a lot of years trying to figure out ways to get health 
professionals trained and ready to practice in rural areas. And 
I mentioned one of them. I think the thing before us now 
pragmatically that we could invest in is graduate medical 
education. And maybe the leverage point there, as we expand 
Medicaid in at least 30 of the States so far, is to use 
Medicaid graduate medical education where States have far more 
flexibility, through State plan amendments and such, of 
supporting a rural health professions infrastructure.
    But the second thing has been mentioned several times, 
there is no greater thing that a Governor can do is to reduce 
the uncompensated care. If you just shift uncompensated care 
cost to someone else, that is a hidden tax, every bit as 
important as any other kind of tax you might levy. And in 
Arizona, we are the very last State to do Medicaid. You know, 
that was passed in 1965 as part of an amendment to the Social 
Security Act. We didn't get around to it for 17 years in 
Arizona until 1982. But we did expand Medicaid to 100 percent 
of the federal poverty level. We were an early expansion State. 
But we had to freeze that. 200,000 people got forced off of 
Medicaid during the Great Recession a couple years ago. And 
what happened is the uncompensated care costs for our hospitals 
doubled and tripled and have put many to the brink of fiscal 
extinction. Governor Brewer, not to be confused with a 
progressive, you know, Democratic Governor, very conservative, 
somehow she restored that coverage back to 100 percent. And 
while she was at it, being very unpopular with her conservative 
colleagues, expanded it to 138 percent. That single factor of 
getting people health coverage, a payment source, has brought--
in 2013, half of our Critical Access Hospitals had negative 
margins. Now they are just barely above the positive margin, 
but they are in positive. Getting people coverage is there. 
Every State does it different.
    In Arizona, we do it as the Arizona healthcare cost 
containment system. But it is a way to go about assuring 
accountability. Every State is going to have to sort through 
how best to cover their uninsured. And I think that factor 
alone is probably the most important for our rural hospitals 
and our rural providers.
    Mrs. NOEM. But not necessarily something that Congress can 
do.
    Dr. DERKSEN. Pardon me?
    Mrs. NOEM. Not necessarily something that Congress can make 
a decision on today.
    Dr. DERKSEN. I think any time you are looking at Medicare 
and Medicaid coverage, you can't really separate them easily. 
But the types of policies that you are doing here, the types of 
payment issues--the hospital, I mentioned that we will close on 
Friday because Medicare has frozen payment, well, Medicaid 
can't pay them in our State either. So a lot of these issues go 
hand in hand. Thank you.
    Mrs. NOEM. Mr. Chairman, I realized I am out of time. If 
the rest of the panelists wouldn't mind submitting to me your 
recommendations on what you believe are the biggest challenges 
to maintaining access to care in rural communities, I would 
certainly appreciate that.
    With that, I yield back.
    Chairman BRADY. Thank you. I would like to thank today's 
witnesses for their testimony today. And I appreciate your 
continued assistance getting answers to the questions that were 
asked by the committee. As a reminder, any member who may wish 
to submit a question for the record will have 14 days to do so. 
If they do, I would ask the panel to respond in writing in a 
timely manner.
    Again, we are looking for common ground in how we address 
these rural healthcare disparities. Today's hearing was 
helpful.
    With that, the committee is adjourned.
    [Whereupon, at 11:45 a.m., the subcommittee was adjourned.]
    [Submissions for the record follow:]
    
    
    
    
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