Wellstone introduces legislation to aid rural hospitals

Another bill

addresses Medicare

prescription benefit

By RON LARSEN

Journal Staff Writer

WASHINGTON -- Legislation aimed at correcting the Medicare funding disparity for many rural Minnesota hospitals and other small hospitals throughout the country has been introduced by Sens. Paul Wellstone, DFL-Minnesota, and Frank Murkowski, R-Alaska.

On a related front, Wellstone joined with several other Democratic senators in introducing a bill which, he said, would "guarantee access to affordable prescription drugs for all Medicare beneficiaries including 40 percent of Minnesota seniors currently without any prescription drug coverage at all."

The Rural Community Hospital Assistance Act corrects some of the disparities, making it possible for these rural facilities to continue providing high quality health care to rural Americans, Wellstone said during a teleconference news session Wednesday.

"It's hard to imagine that Minnesota is second only to Texas in the number of rural hospitals within the state, but it's true. So, we feel the impact of this disparity more than anywhere else in the country," Wellstone explained.

"If we are unable to correct these problems threatening access to health care services throughout our state, the health of those in our rural communities could be threatened," Wellstone said. "Over the past 15 years, 35 Minnesota hospitals, including 28 rural hospitals, have closed their doors. Still more Minnesota hospitals report serious financial problems."

"What makes the problem worse for many rural hospitals is the disproportionately high percentage of Medicare patients in their patient load," said Debra Boardman, president and CEO of Riverview Health Care Association in Crookston. "In many instances, the percentage may run as high as 70 to 80 per cent so that these hospitals don't have the opportunity to spread the discounted payments over a wider regular patient load."

The act improves the current structure by providing enhanced cost-based reimbursement for so-called "Critical Access Hospitals," rural facilities with 15 or fewer beds.

Under the proposal, qualifying hospitals could use the enhanced cost-based reimbursement for inpatient, outpatient and select post acute services, as well as psychiatric and rehabilitative care. Some rural hospitals with 50 or fewer beds would be eligible for enhanced cost-based reimbursement for inpatient, outpatient, ambulance and home health services.

The Medicare Outpatient Prescription Drug Act of 2002 adds complete coverage for all Medicare beneficiaries with no gaps or limits for prescription drugs beginning in the first year the benefit is offered, in 2004.

The act provides a benefit package at a low cost. Medicare beneficiaries would pay no deductible and a $25 monthly premium. There is a $10 co-payment for generic drugs; a $40 co-payment for preferred brand name drugs, and a $4,000 cap on out-of-pocket expenditures.

Those beneficiaries with incomes below 135 percent of poverty level would receive full assistance for their drug premiums and cost-sharing while those with incomes in the 135-150 percent range would pay a reduced premium on a sliding scale.