Medicare-Dependent, Small Rural Hospital Program Set to Expire

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  • April 20, 2017
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Medicare-Dependent, Small Rural Hospital Program Set to Expire

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) extended the Medicare-dependent, Small Rural Hospital (MDH) program, but like previous statutes before it, only temporarily. Beginning Oct. 1, 2017, the MDH program will no longer be in effect.

The Effect on Hospitals

The Centers for Medicare & Medicaid Services (CMS) explains in the 2018 Hospital Inpatient Prospective Payment System (IPPS) proposed rule that all hospitals with MDH status will lose their status and will be paid based on the IPPS federal rate after Sept. 30, 2017.

Hospitals Have An Alternative

MDH entities can apply for sole community hospital (SCH) status and be paid as such under certain conditions. To receive SCH status effective Oct. 1, 2017, the MDH must apply for SCH status at least 30 days before the expiration of the MDH program (i.e., no later than Sept. 1, 2017). The MDH also must request that, if approved as an SCH, the SCH status be effective with the expiration of the MDH program (Oct. 1 , 2017).

Keep Your Ear to the Ground

CMS is proposing that if the MDH program were to be extended by law again, they would make conforming changes to the regulations governing the MDH program and the general payment rules to reflect such an extension. Congress would need to act before the Sept. 1, 2017, deadline, though, to give MDH entities time to apply for SCH status.
The IPPS final rule generally publishes mid-August.

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Renee Dustman, BS, AAPC MACRA Proficient, is an executive editor at AAPC. She holds a Bachelor of Science degree in Media Communications - Journalism. Renee has more than 20 years experience in print production and content management. Follow her on Twitter @dustman_aapc.

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