U.S. Senator Charles E. Schumer announced legislation that will extend two Medicare payment programs that are critical to rural hospitals in Western New York and across Upstate New York, and that are set to expire this year. The Medicare-Dependent Hospital Program provides support to nine hospitals in New York that treat a high number of Medicare patients, and allows greater financial stability in serving their communities. The Low Volume Hospital Program impacts 24 hospitals across New York, and provides Medicare support to hospitals that are very important to rural communities, though do not necessarily serve a high volume of patients.  Each of these programs is set to expire on Sept. 30, 2012, and Schumer’s legislation, which he introduced with Senator Chuck Grassley (R-IA), would extend these programs for one additional year.

In Western New York,  4 hospitals count on the Low Volume Hospital Program for their stability and ability to provide high quality healthcare. There are no hospitals in the region that count on the Medicare-Dependent Hospital Program. A breakdown of the funds each hospital received last year appears below:

Low-Volume Hospital Program:

  • ·         Westfield Memorial Hospital — $67,500
  • ·         Brooks Memorial Hospital — $534,500
  • ·         Bertrand Chaffee Hospital — $259,600
  • ·         TLC Health Network — $165,600

“Rural hospitals are the lifeblood of rural economies throughout upstate New York, and they deserve our support. Efficiently supporting our rural hospitals and their patients allows medical facilities across Western New York to continue providing high quality health services, and is pivotal for our community and our economy,” said Schumer. “The continued existence of these Medicare programs is critical to the financial stability of hospitals across Western New York, and will help enhance quality of life in our rural communities. We cannot let these programs end, and I will fight tooth and nail to provide New York’s rural hospitals with the support they deserve.”

“The legislation introduced today by Senator Charles Schumer is a critical extension of two Medicare provisions for certain small hospitals that would ensure access to care for patients in their predominantly rural communities around the state,” Daniel Sisto, President of the Healthcare Association of New York State (HANYS). “Once again, Senator Schumer steps up to the plate to lead on behalf of New York hospitals and the patients for whom they provide services from primary care to the most complex acute care.”

This bipartisan effort spearheaded by Senator Schumer would preserve over $700,000 in payments Brooks Memorial Hospital and Lake Shore Health Care Center, a member of TLC Health Network,” said Jonathan Lawrence, MHA, FACHE, President and CEO of Lake Erie Regional Health System. “The passage of this legislation is absolutely essential  to maintaining high quality health care services and the health care jobs that are essential to the physical, social and economic well-being of the communities we serve.  As rural NYS hospitals are increasingly forced to operate on the brink of solvency, we are grateful to Senator Schumer for his continued advocacy and steadfast support.”

Medicare-Dependent Hospital Program:

Congress established the Medicare-dependent hospital (MDH) program in 1987. There are approximately 200 MDHs in the United States and nine in New York State. These NY hospitals receive $8.7 million annually from this program. These hospitals are paid  by Medicare with a special rate to address the fact that most of their patients are Medicare patients. These payments allow MDHs greater financial stability and leave them better able to serve their communities.  A hospital qualifies for the MDH program if it is located in a rural area, has no more than 100 beds, is not classified as a Sole Community Hospital, and has at least 60 percent of inpatient days or discharges covered by Medicare.

This program expires September 30, 2012. Schumer’s bill will extend the program for one year.

The network of providers that serves rural Americans is fragile and more dependent on Medicare revenue because of the high percentage of Medicare beneficiaries who live in rural areas. Additionally, rural residents on average tend to be older, have lower incomes and suffer from higher rates of chronic illness than their urban counterparts. This greater dependence on Medicare may make certain rural hospitals more financially vulnerable to prospective payment. To reduce this risk and support small rural hospitals for which Medicare patients make up a significant percentage of inpatient days or discharges.


Low Volume Hospital Program:

Low volume hospitals are those that are critical to the community but may not serve a high volume of patients. Since 1988, the Medicare program has recognized that these hospitals need additional support so that they can continue to provide high quality care to rural communities. A low-volume hospital is defined as one that is more than 15 road miles from another comparable hospital and has less than 1,600 Medicare discharges are year.

Medicare seeks to pay efficient providers their costs of furnishing services. However, certain factors beyond providers’ control can affect the costs of furnishing services. Patient volume is one such factor and is particularly relevant in small and isolated communities where providers frequently cannot achieve the economies of scale possible for their larger counterparts.

There are approximately 24 hospitals in New York that qualify for the low-volume hospital program.

Schumer’s bill would extend the additional payments for low volume hospitals for one year.