“Our Sole Community and Medicare Dependent hospitals are critical life lines for rural communities, particularly ones with large senior citizen populations, throughout New York State. These hospitals serve a vital public need, but are often under serious financial pressure because they serve fewer patients than their urban and suburban counterparts and receive a high
Recently, CMS decided to change a calculation used to determine certain funding for SCHs and MDHs. However, Schumer said CMS has decided to go after hospitals to try and retroactively recoup funds based on the new formula and not the formula in place when these funding determinations were made. Wellsville, for example, was recently notified that it owes more than $400,000 and has 15 days to pay up. Schumer said this is completely unfair, and is therefore demanding CMS immediately reverse course on this action, which could leave hospitals like Jones Memorial in the lurch and unable to provide the services patients depend upon.
Schumer explained that there are two federal programs, the SCH Program and the MDH Program, that provide hospitals, particularly in rural areas, with the funding they need to continue essential healthcare services in communities that would otherwise not have options. When these hospitals experience a decrease in discharges of more than 5 percent from one cost reporting year to the next they can apply for a Volume Decrease Adjustment (VDA) payment. Schumer explained that, due to this circumstance beyond their control, they receive this adjustment payment to cover some of the costs needed to maintain necessary core staff and services.
Rural hospitals face many challenges to their bottom line due to serving a population that has a high percentage of Medicare beneficiaries, providing care to more isolated communities where it is harder to achieve economies of scale, and attending to a smaller volume of patients compared to urban and suburban hospitals. As a result, these rural hospitals are often financially strained, making it difficult to provide the same, high-quality care as other hospitals and medical centers. Schumer said these VDA payments help make these hospitals viable and capable of providing the emergency services residents in rural areas depend upon.
Schumer explained that CMS recently revised the calculations it uses to determine how much funding hospitals should receive through their VDA payment. Schumer said that while this is something hospitals can account for going forward, CMS has also decided to try and recoup past payments to hospitals based on the new formula. Just this past week, National Government Services (NGS), the Medicare Administrative Contractor for New York on behalf of CMS, began notifying the 16 New York SCHs and MDHs that they must make immediate repayment for funds received in 2013 due to these new calculations. Schumer called going after hospitals – and more than three years later – for funds they received when the funding formula was different is completely unfair. In particular, Jones Memorial Hospital in Wellsville has been told it has 15 days to pay back the $400,138 it received back in 2013.
On top of this, Schumer said this revision could call additional years of VDA payments into question and lead to more letters of remand from CMS to hospitals. Schumer said this attempt to claw back money from 2013 could eventually lead CMS to try and collect on years following, and therefore lead to even more financial strain and bureaucratic hurdles for these hospitals. Most importantly, Schumer said CMS’ continued pursuit of hospitals like Jones could impact their ability to provide the quality care residents in the region rely on. Schumer said this is unconscionable, as the funds provided to this hospital two years ago were already used to ensure critical healthcare access for rural communities. Schumer therefore urged CMS to immediately reverse course on going after small, rural hospitals in order to remand these funds.
Schumer was joined by Jones Memorial Hospital CEO Eva Benedict and hospital staff, Chairman of the Allegany County Legislature Curt Crandall, Allegany County Administrator Tim Boyd, Wellsville Town Supervisor Donald LaForge, and Village of Wellsville Mayor Judy Lynch.
“As a small, rural hospital, Jones Memorial has significant financial challenges as an organization. Recently the federal agency that runs the Medicare program told us they want us to repay a significant amount of funding – monies that its own contractors have previously approved and awarded to Jones Memorial Hospital. The repayment of these funds would cause a significant financial burden and impact our ability to move forward with much needed medical equipment, while compromising the financial stability Jones Memorial and the University of Rochester are working hard to achieve. The federal government should not force a retroactive repayment on Medicare funds it had previously approved. We appreciate Senator Schumer’s efforts with this issue – he continues to be one of the strongest advocates for rural healthcare,” said Eva Benedict, CEO FACHE, Jones Memorial Hospital.