Grassley, Hyde-Smith: Targeted Program Offers Rural Hospitals Financial ‘Shot in the Arm,’ but CMS Isn’t Maximizing It

Grassley, Hyde-Smith: Targeted Program Offers Rural Hospitals Financial 'Shot in the Arm,' but CMS Isn't Maximizing It

WASHINGTON - Sens. Chuck Grassley (R-Iowa) and Cindy Hyde-Smith (R-Miss.) are pressing Centers for Medicare & Medicaid Services (CMS) on its refusal to use the budget-neutral Rural Community Hospital Demonstration (RCHD), despite the program's proven efficacy for participating rural hospitals and qualifying facilities' interest in joining.

"CMS last solicited program applications in 2017 and has communicated to us that the agency is not planning any further solicitations. Current law allows up to 30 hospitals to participate in the RCHD, but for the past several years CMS has underutilized the program, leaving as many as eight spots vacant," the senators wrote CMS Administrator Brooks-LaSure.

"A 2022 evaluation report found that new hospitals participating in the RCHD program saw their finances stabilize. The evaluation noted that hospitals joining the program saw a 'large, positive, and statistically significant increases in their Medicare inpatient and combined margins.' Rural stakeholders have called the RCHD a 'lifeline' and that has enabled struggling hospitals to expand health care services to seniors," they continued. "The RCHD program is supporting rural hospitals and it should be fully utilized. If CMS has the tools to help one rural hospital, then you should be doing something about it."

Read Grassley and Hyde-Smith's full letter HERE.

Background:

The RCHD program improves financial viability for hospitals that are too large to be Critical Access Hospitals and too small to succeed under Medicare's hospital inpatient prospective payment system. Congress established the RCHD in 2003 and has reauthorized it three times since.

Grassley's RCHD Efforts:

Grassley is a lifelong resident of rural Iowa who, through his membership and leadership on the Senate Finance Committee, consistently works to improve patients' access to care and ensure their hospitals stay open, regardless of where they're located.

Last year, Grassley secured a commitment from Health and Human Services Secretary Xavier Becerra that his agency would "do more" to support rural hospitals in need. Grassley followed up shortly after, urging CMS to open RCHD spots. At Grassley's request, CMS spoke with Iowa facilities looking to participate in the RCHD program. However, after months sans action, Grassley at a March hearing questioned Secretary Becerra about his failure to fill program openings, asserting the agency should be wielding every tool in the toolbox to help rural hospitals.

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