Reed, Brindisi, Stefanik Introduce Bill to Fix Bureaucratic Mess, Ensure Rural New York Hospitals Keep Their Doors Open

Statement

Representatives Tom Reed (NY-23), Anthony Brindisi (NY-22), and Elise Stefanik (NY-21) today introduced the Access for Rural Communities Act (ARC Act), bipartisan legislation to cut red tape and help rural hospitals keep their doors open.

"We care about ensuring the hardworking people throughout rural New York have access to hospitals," Tom said. "By slashing bureaucratic red tape we can guarantee the hospitals in our backyard are able to continue their mission of delivering healthcare to people in their times of need."

The ARC Act would provide a legislative fix to a problem that arose for 16 rural New York hospitals as a result of a 2015 Centers for Medicare and Medicaid Services decision. The 2015 decision created bureaucratic confusion and resulted in recoupment payments being sought by Medicare contractors from the local hospitals. This legislation would provide CMS with the authority to fix this bureaucratic confusion and help New York rural hospitals stay open.

"Maintaining access to health care for our rural communities is, unfortunately, often times a life or death issue," Rep. Brindisi said. "Congress needs to do everything it can to keep the doors of these rural hospitals open. The ARC Act is a small step to ensuring Upstate New York communities have access to care."

"The rural community hospitals in my district are financially vulnerable and rely on the Volume Decrease Adjustment to keep the lights on," Rep. Stefanik said. "This legislative fix will help eight Sole Community and Medicare Dependent Hospitals in the North Country that care for our seniors and the most vulnerable. I am proud to partner with my colleagues in Upstate New York to support rural hospitals and promote quality and affordable health care for our constituents."

Local health care advocates praised the members' legislation.

"HANYS applauds Reps. Brindisi, Reed, and Stefanik for their steadfast support of New York's not-for-profit small and rural hospitals," said Healthcare Association of New York State President Bea Grause, RN, JD. "The Access for Rural Communities Act would preserve access to care in rural communities across New York state by protecting critical Medicare Volume Decrease Adjustment payments for financially vulnerable hospitals. We look forward to working with the entire Delegation, under the bipartisan leadership of Reps. Brindisi, Reed, and Stefanik to secure passage of this important bill."

"We thank Representatives Brindisi, Reed and Stefanik for introducing this bipartisan bill in an effort to bring resolution to the Volume Decrease Adjustment," said Dewey Rowlands, VP/Chief Financial Officer at Rome Memorial Hospital. "In light of the government's efforts to stabilize fragile community hospitals, this will help those like Rome Memorial Hospital to continue to provide the essential services for the patients we serve."

Background:

Medicare Volume Decrease Adjustment (VDA) are a lifeline that help Sole Community and Medicare Dependent hospitals maintain core staff and services when these facilities experience a significant decrease in patient volume due to circumstances beyond their control.

In good faith, hospitals in Upstate New York applied to National Government Services (NGS), the Medicare contractor for New York and New England, for VDA payments; were determined to meet all requirements to qualify for an adjustment; and in many cases, were awarded funds.

However, new VDA calculation instructions from Centers for Medicare and Medicaid Services (CMS) tied to a 2015 Medicare Administrator ruling (Fairbanks Memorial Hospital) required NGS to re-review all VDA calculations made since 2013.

As a result, 16 small rural hospitals in New York have faced or continue to face recoupments that could total $15 to $20 million, with a punitive interest rate of over 9 percent.

This legislation would provide CMS with the authority to go back and fix the hospital payments in situations like this.

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