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Published on January 21, 2014

Help Save Critical Access Hospitals

January 20, 2014

Dear Editor:

The President, supported by the United States Department of Health and Human Services, would like to reduce Medicare reimbursement levels and eliminate the “Necessary Provider” designation affording Valley West Hospital cost-based reimbursement. Basically, this means that Valley West Hospital gets paid for actual costs incurred by our patients.

The proposal by the Office of the Inspector General for the Department of Health and Human Services would deny states the right to designate small, rural hospitals in locations where access to primary care is limited as “Necessary Providers.” This would result in all existing hospitals with a critical access designation, including Valley West, to lose their status and cost-based Medicare reimbursement. Estimates show approximately 75 percent of all Critical Access Hospitals across the country would lose their designation and face possible closure. In Illinois, 44 of the 51 Critical Access Hospitals would face a similar fate.

Does this make sense to anyone living in a rural area? There are approximately 1,320 Critical Access Hospitals across the country including Valley West, and we represent 22 percent of all community hospitals in the nation. And yet Medicare reimbursements to Critical Access Hospitals are less than 5 percent of the total Medicare budget. In a letter to Senators Max Baucus and Orrin Hatch, Chairman and Ranking Member of the Senate Finance Committee, 14 senators from across party lines stated that the estimated savings from eliminating the Necessary Provider status would be “about one-hundredth of one-percent of 10-year Medicare spending.”

No one disagrees that smart and targeted reforms to Medicare that reduce costs and encourage high quality of care are needed. However, neither the President’s proposed budget cuts nor the OIG’s recommendation qualify as such. Arbitrary cuts to the Critical Access Hospital program will only reduce the ability of millions of Americans living in rural areas to meaningful access to affordable quality care.

We need your help to keep quality health care in our community where we need it. Please contact your Senator and Congressman. Contact information for local senate and congress offices can be found on the KishHealth System website at Along with contact information, we also have form letters you can use to help. The link below will direct you to a form letter that you may use. Help save the Critical Access Hospital program and keep healthcare in our community.


David R. Proulx, MBA
Assistant Vice President, Valley West Operations
KishHealth System

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