From Becker’s Financial Management

Rural hospitals face mounting financial and operational challenges that threaten their long-term viability, with Medicare Advantage emerging as a growing pain point, according to a Feb. 20 report published by the American Hospital Association.

Many rural facilities continue to operate at a loss after years of turbulence, and the AHA warns that the rapid expansion of MA — along with the program’s ubiquitous challenges, including low reimbursement rates, payment delays and excessive prior authorizations — is straining rural providers and jeopardizing access to care.

“With MA plans accounting for more than half of total Medicare enrollment and growing, it’s more important than ever that the program works for patients and the providers who care for them,” AHA President and CEO Rick Pollack said. “It is critical for policymakers to address the harmful impact of Medicare Advantage’s low reimbursements and excessive administrative burdens to help ensure rural hospitals can continue to provide care to their patients and communities.”

Twelve things to know:

1. Rural hospitals receive about 90.6% of traditional Medicare rates on a cost basis from MA plans, according to the report. Quality of care is also affected, with 81% of rural clinicians reporting declines due to insurer requirements.
2. Rural MA patients also face longer hospital stays, spending 9.6% more time in the hospital before transitioning to post-acute care compared to similar traditional Medicare patients, according to the AHA.
3. Administrative burdens have also grown, with nearly four in five rural clinicians reporting an increase in administrative tasks over the past five years, and 86% saying these demands have negatively affected patient outcomes.
4. A survey cited in the AHA report found that nearly 80% of rural clinicians have experienced a rise in administrative tasks over the past five years, with 86% reporting negative effects on patient outcomes. Delays in MA plan approvals lead to longer hospital stays for patients awaiting post-acute care — 9.6% longer than traditional Medicare beneficiaries — further driving up costs for already struggling rural hospitals.
5. MA has grown rapidly in recent years, with about 32.8 million people (54% of the eligible Medicare population) now enrolled in an MA plan. In rural areas, the growth rate has been even steeper, with MA enrollment quadrupling since 2010, according to the AHA. At its current trajectory, MA is expected to cover most rural Medicare beneficiaries in the near future.
6. Many seniors opt for MA plans due to supplemental benefits, such as vision and dental coverage, as well as cost-sharing protections. However, for rural hospitals, this shift has led to significant financial and operational challenges.
7. Historically, traditional Medicare has reimbursed hospitals at rates below the cost of care, according to the AHA report, which found that MA plans pay even less, reimbursing rural hospitals at just 90.6% of traditional Medicare rates on average. For Medicare-dependent and low-volume hospitals, this rate drops to 85%, while critical access hospitals receive only 95% of their costs under MA plans.
8. This payment disparity cost rural hospitals an estimated $1 billion in 2023 alone. Given that Medicare accounts for a larger share of rural hospital revenue than urban hospitals — 43% versus 37% — these lower rates have an outsized impact on rural providers.
9. The AHA argues that the financial instability caused by MA policies is accelerating the closure and downsizing of rural hospitals. Over the past decade, more than 100 rural hospitals have closed or converted to other provider types. Additionally, 432 rural hospitals are at risk of closing, according to a Feb. 11 report from Chartis, a healthcare advisory services firm.
10. A conflicting study published in November 2023 by the American Journal of Managed Care found that increasing MA enrollment did not increase rural hospitals’ financial distress or risk of closing. Researchers studied rural hospitals in 14 states and found that MA enrollment in rural hospital counties grew from 14.3% of Medicare beneficiaries in 2008 to 28.4% in 2019. Additionally, the percentage of Medicare inpatient stays paid for by MA plans increased from 6.5% in 2008 to 20.6% in 2019.
11. When MA penetration increased by 1% in a county, hospitals’ financial stability increased slightly, and they experienced a 5% reduction in risk of closing, according to the AJMC study. One in 5 of the hospitals studied treated no MA patients during the study period. The findings challenge concerns that MA plans harm rural hospitals through lower payments or added administrative burdens.
12. With MA enrollment expected to continue to grow, the AHA has urged policymakers to ensure that rural hospitals can sustain operations while providing high-quality care. The report suggests several key reforms, including:

• • Streamlining prior authorization processes to protect timely access to medical care and drugs covered under the medical benefit.
  • Cost-based reimbursement for critical access hospitals from MA plans.
  • Ensuring prompt payment from insurers for medically necessary, covered healthcare services provided to patients.
  • Requiring MA plan clinicians who review coverage denials to share their name and credentials and ensure they meet CMS rules and have relevant training and expertise.
  • Improving data collection, reporting and transparency with a focus on metrics that are meaningful indicators of patient access, including appeals, grievances and denials.
  • Expanding network adequacy requirements for post-acute care sites.

Click here for more details on the AHA report.

The Chartis Center for Rural Health released its annual list of the top 100 critical access hospitals in the U.S. on February 12.

To determine the 2025 list, the firm used the Chartis Rural Hospital Performance INDEX, which assesses performance in inpatient market share, outpatient market share, quality, outcomes, patient perspective, cost, charge and finance.

Here are the top 100 critical access hospitals in the U.S., listed by state:

Arkansas

• Mercy Hospital Paris

Colorado

• East Morgan County Hospital (Brush)
• Kit Carson County Memorial Hospital (Burlington)
• Mt. San Rafael Hospital (Trinidad)
• Rio Grande Hospital (Del Norte)
• Wray Community District Hospital

Florida

• Calhoun Liberty Hospital (Blountstown)

Iowa

• Cass Health (Atlantic)
• CHI Health Missouri Valley
• Clarke County Hospital (Osceola)
• Floyd Valley Healthcare (Le Mars)
• Greater Regional Medical Center (Creston)
• Grundy County Memorial Hospital (Grundy Center)
• Hancock County Memorial Hospital (Britt)
• Loring Hospital (Sac City)
• UnityPoint Health Jones Regional Medical Center (Anamosa)
• Van Diest Medical Center (Webster City)
• Washington County Hospital (Washington)

Idaho

• Shoshone Medical Center (Kellogg)
• St. Luke’s Wood River Medical Center (Ketchum)

Kansas

• Artesian Valley Health System (Meade)
• Clay County Medical Center (Clay Center)
• Community Memorial Healthcare (Marysville)
• Fredonia Regional Hospital
• Hodgeman County Health Center (Jetmore)
• Morris County Hospital (Council Grove)
• Nemaha Valley Community Hospital (Seneca)
• Patterson Health Center (Anthony)
• Rooks County Health Center (Plainville)
• Sabetha Community Hospital

Louisiana

• Ochsner St. Anne Hospital (Raceland)

Massachusetts

• Fairview Hospital (Great Barrington)

Maine

• Stephens Memorial Hospital (Norway)

Minnesota

• Avera Granite Falls Health Center
• CentraCare – Redwood Hospital (Redwood Falls)
• Kittson Healthcare (Hallock)
• Lake View Hospital (Two Harbors)
• Mayo Clinic Health System – St. James
• Mayo Clinic Health System – Waseca
• Meeker County Memorial Hospital (Litchfield)
• New Ulm Medical Center (New Ulm)
• Olivia Hospital & Clinic
• Pipestone County Medical Center & Family Clinic Avera (Pipestone)
• Riverwood Healthcare Center (Aitkin)

Missouri

• Carroll County Memorial Hospital (Carrollton)
• Community Hospital Fairfax
• Cox Barton County Hospital (Lamar)
• Pike County Memorial Hospital (Louisiana)

Montana

• Barrett Hospital & HealthCare (Dillon)
• Bitterroot Health – Daly Hospital (Hamilton)
• Central Montana Medical Center (Lewistown)
• Community Hospital of Anaconda

North Dakota

• CHI Mercy Health of Valley City
• CHI St. Alexius Health Carrington Medical Center
• Jamestown Regional Medical Center
• Langdon Prairie Health
• Sanford Mayville Medical Center
• South Central Health (Wishek)
• Towner County Medical Center (Cando)

Nebraska

• Antelope Memorial Hospital (Neligh)
• Avera St. Anthony’s Hospital (O’Neill)
• Beatrice Community Hospital & Health Center
• Boone County Health Center (Albion)
• Brodstone Healthcare (Superior)
• CHI Health St. Mary’s (Nebraska City)
• Community Medical Center (Falls City)
• Crete Area Medical Center
• Howard County Medical Center (Saint Paul)
• Jefferson Community Health & Life (Fairbury)
• Johnson County Hospital (Tecumseh)
• Melham Medical Center (Broken Bow)
• Memorial Health Care Systems (Seward)
• Phelps Memorial Health Center (Holdrege)
• Thayer County Health Services (Hebron)

Oklahoma

• Mercy Hospital Watonga

Oregon

• Grande Ronde Hospital
• St. Charles Prineville

South Dakota

• Avera Hand County Memorial Hospital (Miller)
• Hans P. Peterson Memorial Hospital (Philip)
• Madison Regional Health

Texas

• Lavaca Medical Center (Hallettsville)
• Moore County Hospital District (Dumas)
• Olney Hamilton Hospital
• Reeves Regional Health (Pecos)

Utah

• Central Valley Medical Center (Nephi)
• Garfield Memorial Hospital (Panguitch)

Virginia

• Page Memorial Hospital (Luray)

Wisconsin

• Black River Memorial Hospital (Black River Falls)
• Mayo Clinic Health System – Red Cedar (Menomonie)
• Memorial Hospital of Lafayette County (Darlington)
• River Falls Area Hospital
• ThedaCare Medical Center – Shawano
• Upland Hills Health (Dodgeville)
• Western Wisconsin Health (Baldwin)
• Westfields Hospital & Clinic (New Richmond)

West Virginia

• Grant Memorial Hospital (Petersburg)
• Hampshire Memorial Hospital (Romney)

Wyoming

• North Big Horn Hospital (Lovell)
• Star Valley Health (Afton)
• Washakie Medical Center (Worland)

The Centers for Medicare & Medicaid Services (CMS) released updated information on vaccine payment policies for Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs). Effective January 1, 2025, CMS Hepatitis B vaccines are paid like other Part B preventive vaccines. New claim-based payments for Part B preventive vaccines and their administration are effective July 1, 2025. RHCs and FQHCs will need to annually reconcile payments with the facilities’ actual vaccine and vaccine administration costs on their cost reports. Get more information from CMS.gov.

The U.S. Department of Health & Human Services published the guidelines on household income that determine eligibility for Medicaid and a number of other Federal programs.

President Donald Trump’s executive orders have begun to disrupt patient care in the United States, as some providers cannot access essential federal funding, according to interviews with a dozen healthcare providers and policy advocates. Facilities in Virginia and West Virginia told Reuters they were forced to shutter primary care clinics or lay off staff. Other community health clinics in California and Virginia said they received notices of termination for federal grants that support HIV prevention care. Source-Reuters

With Medicaid and CHIP Enrollment at more than 79 million people nationally, data shows the wide range of services accessed by consumers ranging from preventative care to hospital stays and prescription drugs. Medicaid pays for half of all U.S. births and is the largest payer of long-term care and behavioral health services. Pennsylvania has over three million enrollees with more than 750,000 due to Medicaid expansion. Access the Department of Human Services Data Dashboard and Reports for more information.

The CDC issued a report last week showing that the maternal mortality rates decreased between 2022 -2023 for White, Hispanic, and Asian women. However, the rates increased for Black mothers – a group whose pregnancy-related death rate was already more than three times the rate for mothers of other racial and ethnic groups.