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The number of rural hospitals that shut their doors reached a record-setting 19 last year, according to a new report that aims to pinpoint why hospitals are closing.

The Chartis Center for Rural Health and iVantage Health Analytics released a report (PDF) Friday that found 120 rural facilities have shut their doors since 2010. The study also explored indicators that can lead to a rural hospital’s demise.

“The accelerated rate at which rural hospitals are closing continues to unsettle the rural healthcare community and demands a more nuanced investigation into rural hospital performance,” the study said.

Case Study

Across-the-Board Impact of an OB-GYN Hospitalist Program

A Denver facility saw across-the-board improvements in patient satisfaction, maternal quality metrics, decreased subsidy and increased service volume, thanks to the rollout of the first OB-GYN hospitalist program in the state.

See how

The number of rural hospital closures lessened somewhat in 2016, going from 17 in 2015 to 12. That decline though was short-lived, as “there have been 34 closures in the last 24 months,” the report said.

A slew of factors has exacerbated the closure of rural hospitals in recent years. A 2019 report from the American Hospital Association found that hospitals—which are traditionally cash-strapped—are facing workforce shortages, high drug prices and inadequate payment from government programs.

The Chartis report laid out warning signs that a rural hospital was on course for closure. The report looked at three years of financial and operational data for rural hospitals before they closed.

The report identified nine indicators to measure whether a hospital is ripe for closure. Some of the indicators include occupancy rates, age of the facility, system affiliation, total revenue and case mix index, which is the ability to handle a broad mix of services.

“According to this model, for example, a one percent increase in the percent change in total revenue can decrease the likelihood of closure by three percent on average,” the study said. “Similarly, a one percentage increase in the proportion of outpatient revenue decreases the likelihood of closure by five percent on average.”

Another key indicator is whether the state expanded Medicaid under the Affordable Care Act.

“Rural populations are shown to be older, less healthy and less affluent than urban counterparts,” the report said. “Medicaid expansion creates opportunities for individuals in rural communities to move from the ranks of the medically uninsured.”

The model found that being in a state that expanded Medicaid decreases the likelihood of closure by 70% on average. So far, there have been 14 states that did not expand Medicaid.

The Trump administration wants to keep a hip and knee replacement bundled payment model going for another three years.

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule Thursday that calls for a three-year extension to the Comprehensive Care for Joint Replacement Model, which is set to end after this year. The agency is also floating a major change to cover outpatient replacements, as the model currently only covers inpatient procedures.

The goal is to address changes to facilities that can now “allow for total knee and hip replacements to be treated in the outpatient setting,” CMS said in a fact sheet on Thursday.

Case Study

Across-the-Board Impact of an OB-GYN Hospitalist Program

A Denver facility saw across-the-board improvements in patient satisfaction, maternal quality metrics, decreased subsidy and increased service volume, thanks to the rollout of the first OB-GYN hospitalist program in the state.

See how

CMS is also proposing changes for how it will reconcile payments made under the model. Participating hospitals can get a bundled payment to cover an entire episode of care for a hip or knee replacement.

The episode begins when the patient is admitted and encompasses all care provided for 90 days following patient discharge. The goal of the model, which was created in 2016, was to improve care coordination between the initial admission and through recovery.

Currently, a hospital gets two chances to reconcile its bundled payments: at two and 14 months after the close of a performance year. But CMS is proposing to have one reconciliation period instead at six months after the close of each performance year.

The agency also wants to update how payments are calculated to better account for changes in Medicare’s payments.

The first two years of the model generated a modest reduction in spending per hip and knee replacement episode, according to a study in the New England Journal of Medicine.

CMS’ decision to propose an extension for the joint replacement model comes as other models await word of their fate. Chief among them is the Next Generation Accountable Care Organization program, which also sunsets after this year.