Bill to Protect Regional Hospitals Introduced

Thursday, Representatives Derek Kilmer (WA-06) and Elise Stefanik (NY-21) introduced the Protecting Local Access to Care for Everyone (PLACE) Act (H.R. 2552) to help hospitals, including Olympic Medical Center (OMC), continue to provide affordable care in rural communities. The bill aims to halt a new policy from the Centers for Medicare and Medicaid Services (CMS) known as “site neutrality,” which has the effect of cutting Medicare reimbursements by up to 60% for multi-campus regional hospitals, like OMC, that provide services via a network of clinics that are intended to make health care more accessible to patients.

In addition to introducing the legislation, the Appropriations Committee voted Wednesday to include language authored by Rep. Kilmer in the Labor-HHS Appropriations bill expressing concern about the site neutral policy and urging CMS to reconsider the rule and take into account the potential effects to hospitals like OMC that are designated as a Sole Community Hospital and are located in a Health Professional Shortage Area. 

“The Administration has put forward a policy that will hurt access to care in rural areas and kill jobs,” said Rep. Kilmer. “Hospitals should be encouraged to bring their services closer to the people they care for, not be penalized for it. That’s why we’ve introduced bipartisan legislation to ensure that regional hospitals, like Olympic Medical Center, can continue to make health care more accessible to more people. I’m also pleased that language was included in the Appropriations bill this week to direct the agency to examine how this new policy will impact sole community health care providers like OMC. This policy is a real problem, particularly in rural areas where we already face a shortage of qualified care providers. It’s time to fix this.”

“My district is home to many regional hospitals that are currently struggling under CMS’ new policy,” said Rep. Stefanik. “Reducing Medicare reimbursements for these regional hospitals will result in the loss of a principal source of primary care for North Country families. This bipartisan legislation would prevent the CMS policy from being enacted so that rural community hospitals can continue to provide high quality, accessible health care to their patients.”

In November 2018, CMS announced a new rule that would lower reimbursements for off-site hospital clinics. As a result, hospitals that have opened clinics intended to make health care more accessible to patients in rural areas are expected to face a significant loss of funding.  

If left in place, this new policy will result in steep cuts – from $118.35 to just $47.35 per patient – to the reimbursement rate for Medicare patients treated at OMC’s new off-site clinics, including in Sequim, which will have a direct and immediate impact on the quality and availability of care in the region. Over the long run, OMC estimates these cuts will result in roughly $47 million in lost revenue over the next ten years. The hospital has reported that these dollars would otherwise be used to upgrade medical equipment or hire additional doctors and nurses.

The bill is supported by the American Hospital Association and the Federation of American Hospitals.