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Keep Rural Maine Healthy

Please Support LD 1350: The Improving Rural Healthcare Act

The Medicaid program must treat Rural Hospitals more fairly and stop forcing hospitals to suffer financial losses treating Medicaid patients. LD 1350: An Act To Improve Rural Health Care, sponsored by Senate President Troy Jackson, makes three changes that will Help Our Hometown Hospitals now.

Rural Maine Residents Have Greater Challenges Than do Residents in the Rest of Maine:
Rural Hospitals are Vital to the Health and Wellbeing of Rural Maine:
Rural Hospitals Provide Outstanding Quality Healthcare:
Rural Hospitals Are in Financial Crisis:  
Improving Rural Healthcare Act

The Improving Rural Healthcare Act, sponsored by Senate President Troy Jackson (Aroostook Cty.) makes three policy choices that will help hospitals continue to employ physicians and nurses in Rural Maine. There is no single change that will solve all the challenges in rural hospitals; however, the State must treat rural hospitals more fairly.

Part A – Hospital Physicians Are Underpaid by Medicaid.
Part A increases MaineCare reimbursement for rural hospital-employed physicians. Hospitals lose 7% on inpatient and emergency room physicians; hospitals lose 16% on outpatient physicians.

When Medicaid undercompensates hospitals the hospitals are forced to try and shift those losses onto other payers, like the commercial insurance carriers that provide coverage to small businesses in the community. When it works, this ‘cost shift’ drives up the cost of doing business in Rural Maine. However, increasingly rural hospitals are unable to shift those costs and are absorbing unsustainable losses.

Part A asks Medicaid to simply do its part and cover the cost of providing physician services to Medicaid patients.

Part B – Rural Health Clinics Need to Be Re-Based.
Part B re-bases the reimbursement for Rural Health Clinics (RHCs). RHCs were created by the federal Rural Health Clinic Services Act of 1977 which was enacted to address an inadequate supply of physicians serving Medicare patients in rural areas and to increase the use of non-physician practitioners, such as nurse practitioners (NPs) and physician assistants (PAs) in rural areas.

RHCs are paid a flat rate for medically-necessary primary health services and qualified preventive health services furnished by an RHC practitioner. The base rate is set in rule and has not been re- based since 2001 for many RHCs in Maine. There has been some modest inflation adjustments in Medicaid, but they are not nearly sufficient to keep pace with the cost of care. This provision applies to all RHCs, not just those owned by hospitals.

For example, the Medicaid reimbursement rates are 40-50% below the Medicare rates that the federal government pays.

Part C – Loan Forgiveness Programs are Vital to Recruiting Doctors and Nurses.
When a healthcare employer provides loan forgiveness to an employee, Maine’s tax code counts that forgiveness as taxable compensation to the healthcare employee. Thus, the doctor or nurse must pay taxes to Maine on the amount of loan forgiveness received. This bill exempts that forgiveness amount from the employee’s taxable income for nurses and physicians at any hospital in Maine (not just rural Maine). This provision is modeled on the existing program for undergraduate loan payments. It would apply to all hospitals, not just rural hospitals.

Rural Hospitals: Rural hospitals include Maine’s 16 Critical Access Hospitals (CAHs) and 6 PPS hospitals that qualify for Medicare benefits provided to smaller, rural hospitals.