Tucked away in last week’s Congressional Fiscal Cliff compromise, is a provision that will provide several million dollars to two Vermont hospitals and consumers could benefit directly from this development.
In 1990, Congress created a program to help small rural hospitals, that have a high percentage of Medicare patients, cope with fluctuating Medicare reimbursement rates. But funding for the program expired on September 30th and there was a lot of doubt about whether Congress would reauthorize it.
Congressman Peter Welch worked with many of his colleagues from rural states to include funds for the program in the Fiscal Cliff compromise."
"Rural America has hospitals that are absolutely vital providing health care to seniors their community but it’s low volume but they have fixed costs that are significant as any hospital does," said Welch. "So this legislation continues a program that provides fair reimbursement for those critical access rural hospitals and we have several in Vermont."
Welch says the effort was successful because there was a bipartisan group of House members who wanted to save their local hospitals from going out of business.
"If you bleed them dry so that they don’t provide the health care and they lose revenues and close that is going to lead to higher costs elsewhere so we had I think a fact based that was persuasive."
Two Vermont hospitals will benefit from the program. One of them is Southwestern Vermont Medical Center in Bennington.
Kevin Robinson is the Communications Director at the hospital. He says the renewal of the program is very good news because there was a lot of money at stake:
"A loss of $2 million in revenue is a lot for an organization the size of ours that in a given year only has an operating margin of $3-5 million dollars at the end of the year."
And Robinson says patients at the hospital will benefit from the reauthorization.
"The state said we could increase our rates to make up for the loss so as not to affect services," said Robinson. "Now that the Medicare Dependent Hospital provision has been reauthorized, at least for a year, we’ll reduce our rates accordingly."
Brattleboro Memorial Hospital is the second facility in Vermont to benefit from the program. BMH will also receive roughly $2 million in restored funds in 2013.