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Last Month, Schumer Revealed He Was Introducing Legislation to Extend Key Rural Hospital Support Programs for Hospitals That Treat High Number of Medicare Patients & Are Critical to Rural Communities – Hospitals Count on This Funding Each Year, but Rural Hospital Medicare Funding Stream Expires April 1st if Nothing is Done

Schumer-Grassley Bill Would Permanently Extend These Programs Rather Than Let Them Be Subject To Whim of Congress Each Year – Would Help Give Hospitals Certainty Critical Lifeline Will Always Be Available; Without These Programs, Some Hospitals Face Cuts of Over $1 Million


Schumer: Rural Hospitals Deserve Permanent Fed Funding Stream To Continue Providing Quality Health Care


U.S. Senator Charles E. Schumer announced he is introducing a bill today with Senator Chuck Grassley (R-IA) to permanently extend a Medicare payment programs that is critical to the health of rural hospitals across Upstate New York. Schumer explained that these two programs, the Low Volume Hospital (LVH) and Medicare Dependent Hospital (MDH) Program, provided a total of 24 hospitals across New York State with a total of $16 million between 2014 and 2015. Schumer said that this bill would make these programs permanent for the first time. Currently, these programs need to be reauthorized year after year and are subject to the whim of Congress. Schumer said this funding is essential – and permanence is critical – because the hospitals are often under serious financial pressure due to a lower volume of patients than their urban and suburban counterparts and they also receive a higher percentage of Medicare beneficiaries.


The annual funding for these hospitals is set to expire in April if nothing is done. Schumer said that these hospitals play a major role in keeping quality of care high across New York State and are a critical source of jobs, therefore any cut to the program would be a disastrous blow. The hospitals that receive funding through these programs serve tens of thousands of people annually and some face cuts as high as $1 million to their bottom line.


“Strong rural hospitals are essential to quality care, and they are the lifeblood of rural communities,” said Schumer. “These hospitals serve a vital public need, employ several thousands of people, and they deserve our support in their continuous efforts to provide the highest level of care to residents. These two federal programs are a key lifeline for these hospitals, and it is time to extend them on a permanent basis. Rural hospitals need certainty that this critical funding stream will be available year after year, and this bill will do just that.”


Schumer explained that there are two federal programs, the Low Volume Hospital (LVH) Program and the Medicare Dependent Hospital (MDH) Program, that provide hospitals in rural areas – including a total of 24 hospitals between 2014 and 2015 throughout New York State – with the funding they need to continue essential healthcare services in communities that would otherwise not have options. New York hospitals receive approximately $15 million per year in Medicare funds through the LVH and MDH Programs. These funds enable these rural hospitals to serve tens of thousands of patients every year. Schumer said that, due to their location in rural areas, these hospitals serve a vital public need, and should be supported so that they can maintain a high level of care for residents.


Schumer explained that rural hospitals face many challenges to their bottom line due to serving a population that has a high percentage of Medicare beneficiaries, providing care to more isolated communities where it is harder to achieve economies of scale, and attending to a smaller volume of patients compared to urban and suburban hospitals. As a result, these rural hospitals are often financially strained, making it difficult to provide the same, high-quality care as other hospitals and medical centers. The LVH and MDH Programs help make these hospitals viable, and Schumer said if these programs – and the funding they provide – were to expire, which is set to happen on April 1st, it would be disastrous for rural hospitals across the state, potentially affecting availability of services, accessibility and jobs. That is why Schumer and Grassley are introducing legislation to permanently extend these two key programs for rural hospitals that treat a high number of Medicare patients and are critical to rural communities across New York State. 


Specifically, the Low-Volume Hospital (LVH) Program provides funding to the rural hospitals that are critical to the community but may not serve a high volume of patients, therefore making it harder to achieve economies of scale. The Medicare Dependent Hospital (MDH) Program provides funding to hospitals who mainly serve Medicare patients, bringing greater financial stability to the hospital and leaving them better able to serve these rural communities. For over 25 years, the federal government has provided funds to rural hospitals that qualify for these two programs through its dedicated Medicare funding stream in order to make sure they can provide a high quality of care to rural residents. However, Schumer said, the clock is ticking and the two LVH and MDH programs in particular are set to expire in a few months. On April 1 of this year, funding for these programs will lapse if Congress does not vote for an extension. Schumer announced that he is introducing bipartisan legislation with Senator Chuck Grassley (R-IA) that would permanently extend these programs. Schumer noted that getting these two vital programs extended is even more important in this new Congress, which is targeting many different programs for cuts.


Schumer said that these hospitals are a critical source of jobs and they play a major role in keeping quality of care high across New York State, therefore any cut to the program would be disastrous for rural communities and local workforces. According to the National Rural Health Association, hospitals are one of the two biggest employers in rural areas and nationwide roughly 14 percent of total employment in rural communities is attributed to the health sector. Schumer said that, in the past, a closed hospital has meant as much as a 20 percent loss of revenue for the local rural economy, a drop in the per capita income, and an increase in local unemployment. Schumer said that while all of these hospitals and health care providers have balanced investing for the future with implementing cost reduction programs, significant cuts in these two Medicare programs could lead to hospitals and medical centers ultimately reducing services and employment. If the LVH and MDH programs were to expire, cuts could be as high as $1 million for each hospital.


“HANYS is grateful that once again Senator Schumer has stepped forward to take the lead in the U.S. Senate to protect our essential community hospitals and the patients they serve,” said Dennis P. Whalen, President of the Healthcare Association of New York State. “The extension of the MDH and LV programs is critical to preserve access to high quality hospital care for patients in many rural and small communities across New York State.”


Schumer has long been a champion of the LVH and MDH programs. He has often fought to secure federal funds that allow New York’s rural hospitals to continue providing quality health care to residents in these communities, including most recently in April 2014, when Schumer successfully passed a bill that extended Medicare payments to 21 rural hospitals around New York for one year, meaning these critical payments to hospitals would continue until April 1, 2015.


Together the LVH and MDH programs support a total of 24 hospitals between 2014 and 2015 in New York that serve tens of thousands of patients, and provide a total of roughly $16 million a year.  During the call, Schumer detailed the hospitals that are at risk, along with their funding from these two programs. According to the Healthcare Association of New York State (HANYS), the following hospitals, as of 2015, are at risk of losing funding if the LVH and MDH programs are allowed to expire. Additionally, since eligibility for LVH and MDH can fluctuate year to year, there are four hospitals included below that received funding in the past two years, but are not eligible for funding this year. They are starred. The table below also includes how much funding is on the line for each hospital.


Hospital                                                                      County                                   Funding at Risk

Adirondack Medical Center                                       St. Lawrence County              $923,000

Alice Hyde Medical Center                                        Franklin County                      $627,000

Bertrand Chaffee Hospital                                         Erie County                             $246,000

Carthage Area Hospital                                              Jefferson County                    $526,000 *

Claxton-Hepburn Medical Center                              St. Lawrence County              $624,000

Cobleskill Regional Hospital                                      Schoharie County                   $539,000

Community Memorial Hospital                                  Madison County                     $699,000 *

Corning Hospital                                                         Steuben County                      $684,000

E.J. Noble Hospital of Gouverneur                            St. Lawrence County              $553,000 *

Eastern Long Island Hospital                                     Suffolk County                       $914,000

Ira Davenport Memorial Hospital                               Steuben County                      $559,000

Jones Memorial Hospital                                             Allegany County                     $715,000

Lewis County General Hospital                                 Lewis County                         $624,000 *

Massena Memorial Hospital                                        St. Lawrence County              $542,000

Nathan Littauer Hospital                                            Fulton County                         $1,272,000

Nicholas H. Noyes Memorial Hospital                       Livingston County                  $488,000

Oneida Healthcare Center                                          Madison County                     $369,000

Orleans Community Health                                        Orleans County                       $600,000

St. James Mercy Hospital                                           Steuben County                      $706,000

St. Joseph's Hospital of Elmira                                   Chemung County                    $655,000

St. Mary's Healthcare                                                  Fulton County                         $1,123,000

UHS Chenango Memorial Hospital                            Chenango County                   $1,688,000

Westfield Memorial Hospital                                      Chautauqua County                $57,000

Wyoming County Community Health System           Wyoming County                   $800,000

TOTAL                                                                                                                      16,533,000


Under the Medicare Dependent Hospital (MDH) Program, hospitals are paid by Medicare with a special rate to address the fact that most of their patients are Medicare patients. These payments allow MDHs greater financial stability and leave them better able to serve their communities.  A hospital qualifies for the MDH program if it is located in a rural area, has no more than 100 beds, is not classified as a Sole Community Hospital, and has at least 60 percent of inpatient days or discharges covered by Medicare.


Under the Low-Volume Hospital (LVH) Program, low volume hospitals are those that provide critical services to the community but may not serve a high volume of patients. Since 1988, the Medicare program has recognized that these hospitals need additional support so that they can continue to provide high quality care to rural communities. A low-volume hospital is defined as one that is more than 15 road miles from another comparable hospital and has fewer than 1,600 Medicare discharges a year.