NRHA asks Congress to stand up for rural providers by extending vital payment programs

Recently proposed legislation aimed at updating the Sustainable Growth Rate (SGR) will harm rural providers by failing to include a number of vital rural health "extenders" and by reducing other payments to vital rural facilities such as Rural Health Clinics (RHCs), Federally Qualifying Health Centers (FQHCs), Critical Access Hospitals (CAHs) and other rural hospitals. These "extenders" gained broad bipartisan support in the 111th Congress (PL 111-309) and are vital to ensuring that rural hospitals, doctors and other professionals can provide needed emergency and primary care. If congressional action is not taken, these vital programs will expire. Their expiration will inhibit the ability of hospitals and providers to recruit and retain professionals, further extending gaps in essential care. That is why NRHA asked Congress to stand up for rural providers by extending the vital programs in addition to those already proposed:

  • Outpatient Hospital Hold Harmless Provisions: Small rural hospitals (100 beds or fewer) receive Medicare payments so that they are held harmless from the effects of the outpatient prospective payment system.
  • Section 508 Hospital Payments: Created as part of the Medicare Modernization Act (MMA) of 2003, certain rural hospitals, commonly referred to as “Section 508 Hospitals” are reimbursed by Medicare at rates that better account for the valuable service they provide to rural communities.
  • Extension of physician fee schedule mental health add-on: Increased payment rate for psychiatric services delivered by physicians, clinical psychologists and clinical social workers by 5 percent.
While NRHA understands the need to pay for the extension of these programs, the proposed payment methodology will disproportionately harm rural providers. Many rural hospitals depend on government reimbursement for bad debt and disproportionate share services (DSH) to maintain access. Rural America has a higher rate of underinsured, uninsured and Medicaid patients than urban America. Cutting payments for bad debt and DSH will only serve to exacerbate the dire financial situations of many rural facilities. Please visit NRHA’s website at and this blog to get the most recent news on these important programs.