"This legislation has played a key role in saving rural hospitals. Iowa now has 31 Critical Access Hospitals, 12 more have applications pending, and many more are eligible to choose that status if they later decide it's best for them. To me, reauthorizing this program is just common sense. For Iowans to receive quality, cost-effective care that is close to home, Congress must help rural hospitals find ways to continue providing services to their communities," Grassley said. "Iowans shouldn't have to spend their time traveling just to receive quality medical care."
The original legislation, part of the Balanced Budget Act of 1997, created a two-fold program. The first component mandated that Medicare reimburse Critical Access Hospitals on the basis of their costs. States are empowered to designate these Critical Access Hospitals, based on state rural health plans approved by the federal government. The second component is $25 million per year in Rural Hospital Flexibility Grants to states for designing and implementing state rural health plans, developing rural health networks, designating Critical Access Hospitals, developing quality improvement initiatives, and establishing or expanding rural emergency medical programs.
Grassley said the designation of Critical Access Hospitals was made permanent in the 1997 legislation, but that funding of the Rural Hospital Flexibility Grant Program must be reauthorized. Grassley is asking for $40 million per year in his reauthorization bill, a substantial increase over the $25 million level in the original law. Grassley is introducing the legislation with Sen. Max Baucus of Montana, and other colleagues.
Grassley cited an Iowa hospital that benefitted from the Critical Access Hospital designation, the Grundy County Hospital in Grundy Center. The hospital serves approximately 12,300 people from the surrounding areas, but was losing $117,000 a year and was on the verge of shutting its doors. Given the importance of hospitals to the economic vitality of rural communities, such a closure would have been devastating to Grundy County citizens, not only from a health care standpoint but also a broader economic standpoint. The Rural Hospital Flexibility Grant Program provided funds for the Grundy County Hospital to assess the feasibility of becoming a Critical Access Hospital, and then to convert to Critical Access Hospital status.
"The Medicare Rural Hospital Flexibility Grant Program provides resources that allow rural hospitals, like the Grundy County Hospital and many others in Iowa, make informed decisions about how best to remain viable and continue to serve their communities," Grassley said.
Grassley is the ranking Republican on the Senate Finance Committee, which is responsible for legislation on Medicare, Medicaid, Social Security, federal taxes, trade, unemployment benefits, foster care, Welfare and pensions.