model will be testing expenditures of telehealth services as well. as you know critical access hospitals are small role this and that serve communities that otherwise might like access to inpatient care. .com and more than 1300 in the united states and here i would pause and think congress also for extending the medicare dependent hospital program which was in the sgr repeal legislation that she recently passed. ..

form in rural and underserved areas. cms recognizes challenges faced by beneficiaries and providers in rural areas. i look forward to working with hrsa and the congress delivering quality care to medicare beneficiaries regardless of their location. thank you again and i'm happy to answer your questions. >> thank you both. let me answer a couple of questions and we'll do five-minute rounds here. mr. morris, the department the budget the administration submitted would have cut your budget by $20 million. did you ask for that cut? >> mr. chairman, we support the president's budget and the request that came forward. we think it supports the key

programs for our office. includes continued funding for the outreach program, the rural hospital flexibility program. for our policy and research activities and we think those are the programs that can be most effective meeting the needs. >> where are you going to spend $20 million less than you are spending this year? >> the president's budget there is a decrease, yes sir. >> what problems wail will you decrease. >> no request for funding for small hospital improvement program and no request for rural access to emergency devices program. in the case of these programs and administration's requests, these are challenging budget times and they require some tough choices sometimes. so i think the president's budget reflects a request that for the programs that we think are really effective meeting the need. in the case of the small hospital improvement program, we have the rural hospital

flexibility grant program. there is a $25 million request for that program. that sees we see most vulnerable are the critical access hospitals. there will be $25 million requested to support quality improvement and quality improvement -- improvement, working through the states. in rural access to emergency devices program, this places automatic external defibrillators in rural communities. we think the need largely met this that program not only through federal funding but state and private sector funding. we do allow people come in to the outreach funding to get at same issue. the applicant could come throughout reach funding or network funding requested through the budget and do the same thing in the ad program that could develop a program that seeks to purchase defibrillators and put them if rural communities. for the need out there we think

it can be met through the outreach program. >> hospital improvement program you continue is a $25 million program? >> yes, sir. >> in the current year you're spending 25 and proposing to spend another 25 next year? >> correct. >> the 20 you would have this year for similar purposes would go away in the president's budget? >> yes, sir. the ship program, small hospital improvement program, there was no request. historically funded for 15 million. and the other is request for rural access to emergency devices program. >> what obstacles do you see in telehealth? we have people telling us that there is still issues that they're trying to work through with your department in telehealth. what would you say would be the top obstacles to move forward on telehealth? >> one. issues we're trying to get at for telehealth is the whole issue of cross-state licensure. you may have providers located in one state but providing

telehealth services in another state. so the congress provided funding through our telehealth programs for the licensure portability grant program. we have grants with the federation of state medical boards and state and provincial psychology boards. what we're trying to do with the grants work with licensing boards, say if a psychologist was practicing in missouri but was providing services in another state, rather than have two completely different licensure applications they could adopt a common licensure, makes it easier for someone to practice across state lines but still protects patient safety in terms of licensing and credentialed provider. that is the other thing we're trying to get at, other thing we found we're investing in telehealth number of years. one of the challenges finding out which applications have the best clinical outcomes. so the evidence base for telehealth is could be expanded. so one of the things we did this past year was put money into a

teleemergency evidence-based program and what we're trying to understand is how does the outcomes from using teleemergency care compared to when you to the the services face to space. that is any insurer would want to know b more we learn about evidence base and what works best in telehealth can help us target invests moving forward. >> maybe we move forward a little bit on that with the next panel with our telehealth witness there. senator murray. >> mr. morris, i'm supporter of hrsa's health care training workforce programs in addition the corps provides work for physicians that agree to work in underserved areas. i want to recognize the age's important role documenting workforce shortages through the data center of workforce analysis. i want to ask you, what do the current projections say about our national health care workforce shortage? >> sure. demand is expected to increase

for primary care services through 2020 and this is due to the fact that the population's aging the population's growing. there are also impacts that you referenced earlier in terms of more folks having coverage may result in them seeking more services. and so the national center has done some projection work. what they're projecting is that there will be a shortage of approximately 20,000 full-time equivalent positions by 20 to. now this is mitigated somewhat by if we were able to take advantage of the supply of nurse practitioners and pas to use them at full extent of their training. if the transition from mp training and employment and physicians assistants, if that happens the shortage drops down to about 6,000. >> what kind of health care providers are needed in our rural communities? >> i think the full spectrum of providers. primary care that includes the physician and non-physician

providers. we see shortages in mental health from licensed clinical social workers to psychologists. psychiatry is not a service you often find in rural communities. but even some rural communities have challenges in terms of the allied health workforce and regular nursing and so those are all challenges i think that rural communities face. >> talk to me about how the additional resources that you requested for the national health service corps in the budget help address shortages like we have in rural washington. >> well the administration's request would dramatically increase the funding for the national service corps and the advantage of that is right now we fund national service corps loan payments scholarship down to the level of funding that's available based on how underserved they are. basically what their score is in the health professional shortage area. more funding available and funding in the president's budget would allows us to fund

more clinicians in those communities. that would mean a lower hipsa score and more rural communities would have access to it. it has been a lifeline to rural communities as i noted before. just under 50% of the placements for national service corpse go corps go to rural communities. >> how do we continue to leverage the teaching health centers program to make sure resident stay in rural areas? is there anything we can learn from this program to attract other specialists? talk to me about that? >> i think the one of the big lessons from the teaching health center program you can do residency training in a community-based training. most of our training in large academic health centers. if we get more exposure to community-based training they hope they will be in community-based training and see them in working in rural health clinics and community health

centers and rural hospitals. i think this shows a path forward and that informed the president's request really reshaping how we train physicians and creating a new grant program to do community-based training. that would include rural communities. we know also from some. work we do at the rural training tracks which started in your state in washington this is unique model they do one year in academic hospital and one year in rural communities. if we do more community based training we'll meet those needs better. teaching health centers are first step and i think president's request is another step towards that. >> i completely agree. i've seen this working in my state. where you practice and do your residency really makes a difference where you stay. when we have such a need in rural communities, having those residents in those rural communities doing their residency just it works really well. i hope we continue to build on that. and i thank you.

>> senator cochran. >> mr. chairman, thank you for convening this hearing on the challenges that we're facing in our rural communities throughout america in making available health care services some of which are partially paid for by federal government agencies and we hope to learn from this hearing ways to provide the needed resources up to the point where we're authorized to do so. it has been brought to my attention that the health resources and services administration has release ad grant notice regarding intent to provide funding for telehealth focus research center cooperative agreement. could you tell us more about what that is and, what are you looking for in an applicant and what are the goals that woulding funded by this cooperative agreement? >> sure. i think this builds on the

comment i made earlier that we again, i think we know telehealth improves access. i think the real challenge finding out what the impact of that increased access is. so what we're hoping to do with this research center is help build the evidence base finding out which camcations work best and deliver the best outcomes. so what we're looking for are experienced researchers who can do comparative outcome research so we can look at you provide a telehealth service, here's the outcome. how does that compare to whether you had it face-to-face. i think that will really inform the evidence base. >> are you encouraged by the results of your applications and those who are petitioning the government to choose them? >> we've got a lot of calls on this funding opportunity just in the week it's been out there. >> mr. cavanagh i understand the centers for medicaid and medicare services restrict reimbursement telehealth based on geographic locations.

how do you administer that? how do you choose which urban areas, for example are more eligible than others for telehealth reimbursement? >> thank you for the question senator. in the statute it gives us instruction to allow telehealth to be provided in certain geographic areas. i'm pleased with help from our colleagues at office of rural health policy a few years ago we changed our regs to expand the definition of rural areas that qualify but the geographic restrictions really originate in the statute. the good news is through the innovation center which congress created we're able to move beyond those barriers and test new models of telehealth without regard to the geographic barriers and some of the other statutory restrictions. we have a number of very interesting telehealth models that are being tested currently the health link model that mentioned in my testimony. >> yeah. thank you very much.

>> senator moran. >> mr. chairman, thank you very much. thank you for you and senator murray having this hearing, very important one certainly from a senator from kansas but really for the country. let me start with mr. morris. tell me what statistics are there that demonstrate over a period of time how many rural hospitals are closing or being, in addition to that are threatened to close? i've seen an ap story in just the last few days indicateing that 50 rural hospitals have closed. that expectations for more a total of 50 hospitals in rural u.s. have closed since 2010 according to the ap and the pace is accelerating with more closures in the past two years than the previous 10 this is according to the national rural health association. i've also seen the study from

the north carolina research agency organization indicating 47, i think is the number of hospitals that have closed. my question is, do you consider those numbers accurate and what kind of study analysis, do you have about cause? what are the, what can we pinpoint the cause for those closures and what is your expectation for that trend in the future? >> yeah mr. moran, thank you for that question. this is an issue we've been tracking and those numbers align with what we've, where we found in our, we're working with the university of north carolina. they're one of our rural health research centers. and their work is very solid. think that we're trying to get a better handle on what is driving the closures. i don't think there is one single factor behind it. i think what is it is very community specific sort of

issue. in some cases it may be that the community has lost population. it may not have the volume to support a full service hospital but there are also a variety of other market pressures that may be having an impact on it. it is certainly something we're going to continue to study further and university of north carolina research center will lead those efforts. we'll be happy to share with you all those findings. we're looking for a study we hope to find out next year what happens in a community after a hospital closes. just doing informal calling around to get a handle on this. in some communities the hospitals close. we've seen a situation where another provider can step in and still provide a broad range of ancillary services. maybe they have expanded telehealth. maybe they expanded clinic hours so they're not just open 9:00 to 5:00. the community seems largely okay with how it played out. in other cases there is deaf gap when a hospital closes specifically around emergency department services. 34 hospitals have closed since

2013. that is an uptick from the previous two years. what is interesting is the same number of hospitals closed in urban areas. when you know a hospital closes in rural area it's a little different than when a hospital closes in rural area. this will be priority in research over next couple years. we'll work with our colleagues across cms and other departments to best understand it and to see what other resources can be brought to bear. >> mr. morris, i would be interested in knowing the research outcome what happens to a community following a hospital closure but i would also encourage for that research or, to research be conducted that would indicate what steps could we have taken to have prevented the closure in the first place. i'm pretty certain in most instances the research will demonstrate significant consequences often, pretty dire to a community and to patients. i think we ought to be more prospective is how do we avoid this? what are the precipitating

causes? i agree with you it is not one thing. population demographics maybe something we can't control but certainly the regulatory environment the cost structure is important to those hospitals. physician and other health care provider, recruitment retention and reimbursement rate, and on that topic i want to ask but the idea of cost-based reimbursement. what is the evidence that when we say we're reimbursing costs at 101% of costs, that that has any real meaning in the real world? i mean isn't reality when we say we are reimbursing more than cost we only, not all costs are reimbursable so we create this misperception that a critical access hospital is getting something more than what it actual costs them to operate? is there analysis? do you have, can you quantify really what is going on in a hospital when we tell them or when we tell the public that your hospital is getting 101% of costs when it is really

reimbursable costs? >> yeah, that is, as you know that is a very complicated question. it goes back to the historical cost of the hospital. if they converted to critical access what does historical cost feed into what they are paid under cah reimbursement status so it does vary from state to state but i would be happy to get back with you and also with your staff. we could connect you with some of the folks at university university of north carolina and some of our experts that understand it. >> i would welcome that but in today's setting can you confirm for the record when we talk about reimbursing a hospital, their costs that they are receiving something significantly less than actual cost of operating a hospital? >> i think in some cases that may be true but hard to say that nationally because it is different depending on the historical cost structure of the hospital. it might be different for kansas than it is for alabama. and, you know, as you know, how hospital structures are cost is

a science on to itself. happy to get back to you on more of that. i would also respond to your earlier question, we are trying to do what we can to avoid closures and i think what we've done with the investments in the flex program we're really focusing on making sure the hospitals, ch is not required to report their quality data to medicare but we encourage them to do so we've seen a significant increases in the numbers ch is reporting on quality. if they do that if they ban benchmark their quality they can demonstrate more value back to the community. we let a contract last year to work with rural hospitals that are struggling in high poverty counties. we have a example in tallahassee, mississippi, mr. cochran's state, we have consultants go in there to turn around their finances and improve the bottom line. with resources we have we're peculiarly aware of cost nature of some hospitals and our

network funding can begin to get at that we do all we can to help stablize folks that we are not in a closure situation. >> i tell you very few hospitals in kansas that receive quote, cost based reimbursement are able to survive in absence of a tax levy to support the hospital. >> yes sir. >> thanks, mr. chairman. >> thank you, senator moran. senator capito. >> thank you, mr. chairman. i want to thank the panel. i'm from the state of west virginia so i would like to ask a question to mr. cavanagh. in your testimony you talked about the new initiative health link now, which is pairing telemedicine and telepsychiatry. this program is currently being tried in three states. i was wondering what measurable data the pilot program is showing you and what are the prospects of expanding this to other rural communities? as we know there is a shortage of mental health professionals everywhere and rural america is

probably exponentially so. >> you're correct, senator. before i was at the center for medicare, i was at the center for medicare and medicaid innovation. when we did the innovation awards there were quite a few telehealth and telemedicine proposals. i was surprised at the number that had link to behavioral health and psychiatry just as you mentioned. we have some early valuations of those but they're very qualitative. meaning in case studies how they have fared in standing up the program we hope in the next year to have some quantitative data. i will remind the committee the statute set up the innovation center around said these models can be tested and expanded if they meet certain cost savings or quality improvement standards. so we intensively evaluate all these models. we hope in the next year to have some more quantitative results. one of the things i would say many of the innovation center models are being tested very large-scale. some are being tested at smaller scale.

this would be one at smaller scale. even if we get very promising data i don't think the next step would be to go national with it. it would be probably move incrementally move to more communities. we hope to have data soon. we made all our evaluations public. we'll certainly share it with this committee as soon as we have news. >> thank you. one of the obstacles all of us that live in rural states are combating every day is lack of high speed rural broadband access. certainly that has got to be impacting telehealth into the rural health initiatives. are you running into this in some of your telemedicine initiatives? is this a problem that you have identified as well? or do you have anything on that? >> certainly anecdotally, we talk to some of our awardees it affects what communities they can test these models in and what communities they wish they could test these models in. we don't feel like we, it is medicare that have the tools to help with that but we do recognize it as a barrier. it is important i do think

whether telehealth or other technology i think telemedicine technologies i do think broadband is going to be essential to that. >> it's a challenge it's a challenge. you know anecdotally recently, mr. morris, in talking with our hospital emergency room physicians, talking with anesthesiologists the other day one of the things that's cropping up now the lack of total number of residencies so that there are several hundred. i have heard 500 maybe into a thousand. graduates of medical schools who don't match and they don't get a residency and, you know, that obviously stalls out their professional career. they have got student loans and all sorts of other issues. are you looking at i think we should look at rural health as a way to expand the availability of residencies to fill this gap. do you have any, i know you talked a little bit about residencies in our opening statement. >> yeah. we are, we do recognize the

challenges you have just laid out and one of the things we initiated about five years ago was to put a grant together with the national rural health association to expand these rural training tracks. there were about 23 of these across the country. that number has been fairly static over the years. now there are about 34. we have increased number of rural training tracks. and what is unique about the rural training tracks although there is a cap of total number of medicare residencies that can be supported there is flexibility under that cap for new rural training tracks. so there is an opportunity to create rural residencies and, to work with our partners at cms through that flexibility under the residency cap and again we know this is evidence-based model that works and we've seen some real successes from it. >> i certainly would be very supportive of any kind of way to meet to solve this could help solve more than one problem here if we were able to expand that and use it wisely.

i will just make a comment at the end. those of us who live in rural america are always frustrated it is assumed by the more urban areas that it is cheaper to deliver medical services in a rural area because typically wages are maybe a little bit lower but you have workforce shortages. you have travel times. you have all kinds of other issues that it is frustrating for us i think to make the case. we're always have to make the case as you know, you're in this too. and so i applaud your efforts helping us deliver the message to all the health care dollars need to be -- it is not as easy in rural america as some in the urban areas might think it is. thank you. >> dr. cassidy. >> hey gentlemen. i was looking down but listening so one of you pointed out the cause foreclosures are multifactorial. i accept that. i'm curious, seems like only business model that will actually work in a rural set

something volume. because you don't have the critical mass of capitated patients. even if you did, partly because some uninsured or partly payer mix, medicaid for example, is so poor. so i say this because we just passed an sgr bill which promoted alternative payment models accountable care organizations rely on value-based purchasing which implication that volume decreases. so is one of the factors in this multifactorial problem the business model can only survive with certain volumes and the big push now is away from volume and more towards quality? have you run models on that? do you have studies regarding this? because i'm wondering if there is any hope for these hospitals besides an outright subsidy be it through tax base or be it through federal legislation? >> i think senator, you're putting your finger on very important challenge we face as

we move forward. how do you rural health providers not just survive but thrive into the new set up of the sgr reform bill. i think there are multiple ways this can happen. one is -- >> let me ask before you go forward because i had a specific question. >> sure. >> do you have studies showing effect of say, accountable care organization which needs critical mass of people with very good payer mix on capitated basis receiving preponderance of care at this institution? is there study looking whether or not this model will work for rural hospitals? >> i'm not aware of any studies. we do, we are pleased to say though, there has been a lot of skepticism whether acos can work in rural areas. in the shared savings program which i'm responsible for we do have 7.3 million fee-for-service beneficiaries align with acos. about 15% of beneficiaries are living in rural america. >> let me ask you could live in

rural america but still get your health care at guys singer. wouldn't be a local hospital. could be you're linked with urban hospital or semiurban. you know something such as that. are these in the rural hospitals, what is the health of the rural hospitals you just described acos you just described? >> you make a good point. would remind beneficiaries are aligned with aco where they get their primary care. >> i thought it was preponderance of care. >> preponderance of primary care. >> okay. >> you could live in a rural america with aco with significant urban presence and there are acos expand both types of communities and there are those strictly in rural areas. there is one rural aco a national rural aco which is combining rural areas across the country. it is too early to know what success of usual versus urban

acos -- >> i'm sorry i have limited time to so i'm trying to focus. what is the health of rural hospitals in those areas which there is an aco which governs, which has responsibility, if you will for the rural patient? this is about hospitals. so if we have an aco which aggregates the care into an urban hospital setting that would actually be starving the rural hospital. >> i don't have the data that you're requesting. we could certainly go back and see if something we could compile for you. >> okay. okay. continue then. that was kind of the point. so you had another point. i'm sorry, i interrupted so continue. >> i want to make the broader point senator, we have heard from a lot of rural providers they are excited about the prospects getting into new payment models because they do find fee-for-service payments frustrating. they think they're efficient providers in many cases, probably are. we do have one large initiative

out of the innovation center called transforming clinical practice and this is where we're going to help small practices not hospitals necessarily but small physician practices. give them technical assistance so they can develop the infrastructure and knowledge to -- >> now in that, i will just go back to this because it is the hub is rural hospital, that can potentially help, although undervalue based purchasing you will still emphasizing keeping people out of the hospital. you tell me is there a business model that works for a small rural hospital not model based. i could see it working for primary care provider but i don't see a non-volume based working for rural hospital. >> if you're looking for that the best hope is accountable care organization with the aco being a primary player in that. as i mentioned in my testimony we have two different programs to help rural hospitals. we provide them seed capital to help them form an aco to get

into the shared savings program. it is very early both in the aco program and in these models we're running. >> so in that model, what is the, i'm going a little bit long. can i have -- what is the minimum number of patients you would need in order for that rural aco to work? >> so the aco, it doesn't change the minimum number in the basic program which is 5000 aligned medicare patient. >> that would be for a primary care provider but 5000 patients would not support a rural hospital with a ct scan, or, et cetera. do you have a minimum number for excess hospital beds? >> i should have been clear. 5000 is to minimum to get in the shared program. you're asking from acutarial point so do with very some sense where the line is needed. i. >> we can't make wise decisions regarding public policy unless you have those numbers.

ultimately they have to make money. unless you give us some data there is business model that works in alternative payment model we're wasting time. i'm saying that not to scold. we have to make decisions we would ask y'all to come back with that if i can ask indulgence of my chair, ranking member. i yield back. thank you. >> thank you, senator. anybody have follow-up question? we have time for one or two other questions if anybody has one? mr. morris, in response to senator moran's question are you saying you believe there are state has reimburse the total cost of a critical access hospital's operation? >> [inaudible] no sir. what i was saying is that because he can correct me if i get this wrong when you sit the cost based reimbursement rate it is based on historical cost. we just see some fluctuations from state to state in what that initial basis. but it is more complicated than

that. i can get back to you with more information. >> i think we expect you to get back to us on that but i think the point's well-made these rural hospitals are not in the profit-making business even if they get 100% of the, 101% of the allowable reimbursement but there are states that have formula allows that we'll be anxious to see which states are doing that and how they figured out how to calculate everything that is spent by the hospital to operate into their cost basis. >> and to respond to mr. cassidy's question too i would say that we do have examples of hospitals, even with low volumes, that have been able to make it work. i think it really is situationally dependence. there is a base level of volume you need i agree with that. but we've got some success stories out there where folks have been able to bring primary care and physicians and hospitals in a way to figure out what lines of service they can get into that make sense for the

community and arrangements with upstream provide that's make it work. we would like our fund to be sort of the connecting of dots between that and identify those models and replicate them in other communities. >> mr. cavanagh. thanks very much. >> thank you, mr. chairman, helping me to ask my question and i appreciate the answer. this is a home health care question. many some of our hospitals, more, fewer than used to provide home health care services because they can't afford to but the affordable care act includes a provision that requires medicare beneficiaries to have a face-to-face encounter with a physician who certifies the need for the home health care services. implementation of this face-to-face requirement raises lots of concerns with home health care providers, hospital-based or otherwise of the documentation that's necessary, it sure seems to the providers is unclear and the backlog of audits is increasing. there's a real uncertain at this

as what cms standard is for providing satisfactory face-to-face encounter. most of the appeals have been overturned in favor of the home health care provider but my question is, do you see this as a problem? does cms have a plan to respond to clear up the confusion provide certainty and reduce the backlog? >> yes, senator, i think you put your finger on a challenge we've been taking on head on. the first thing is in rule making last year we simplified you're correct, that the affordable care act created the face-to-face standard. our initial rule making in addition required a narrative from the physician, a narrative writing which providers found ambiguous and so we withdrew that requirement. so we still have the face-to-face requirement but not the requirement for a narrative description of the need. we continue to have dialogue with the home health industry to make sure they understand what we're looking for. we are exploring avenues,

personally i'm very interested in finding a way to facilitate people making documentation. as you say there are a lot of auditor reviews. some get overturned but many are upheld. even when they're upheld it is often about the documentation and not whether the service was needed, whether it was provided. granted there is fraud but i'm not talking about that. i'm talking about a lot of services that were truly needed, truly provided but poorly documented. i'll trying to find out if there is anything the agency any role we can play to facilitate that without facilitating bad behavior by a subset the indus street. >> i appreciate your at that time attitude and tempt to resolve this and not punish those doing the right thing and you do punish those who do bad things. mr. chairman, thank you. >> thank you, and thank you to the panel. i'm sure we'll have questions submitted? righting as well. -- writing a as well. appreciate your time. as the second panel is coming

up. that panel includes tim well terse director of wealthers. at osage beach. dr. kristi henderson in jackson mississippi. julie peterson, the ceo of cmh medical center in prosser, washington. mr. george stover the ceo of rice county hospital district in lyons, kansas. >> thank you all for being here. mr. wolters, start with your testimony.

>> thank you. we are here to discuss rural challenges facing rural hospitals. i'm tim wolters i oversee government reimbursement programs in missouri. 50 rural hospitals closed since january of 2010. a rural hospital means more than just a loss of access to health care for a community. a rural hospital is frequently the largest employer in town this closure represents a economic blow as well. my written testimony provides several examples what is working in rural hospitals including quality health care at reasonable price to the medicare program and programs like the medical home program which improves the health in our community. want to focus my oral comments on four specific challenges that rural hospitals face. first, patient volumes are lower at rural hospitals and also fluctuate significantly on a day-to-day basis making it difficult to manage staffing levels. my written testimony has a graph on page three that shows the daily census at lake regional

for the month of january showing significant daily fluctuations including a high census of 103 patients on january the 15th and a low of 66 patients on january the 25th, a significant fluctuation. second utilization is significantly higher at rural hospitals than urban hospitals. table on page four of my testimony urban hospitals average only 30% of medicare utilization compared with 45% at urban hospitals. challenge of medicare utilization, medicare cuts represent higher percent of our budget and less commercial or managed care volume to subsidize the medicare losses. third challenge is impact of medicare cuts. graph on page five compares estimates using cms data of hospital costs versus payments from 20 very much len through 2023 top line represents growth of hospital costs while bottom line estimated growth of medicare payments factoring in

productivity and fixed cuts under the affordable care act and the sequestration cut under the budget control act. the difference between the line represents medicare's loss reimbursement. it grows annually exceeding 17% by 2023. cumulative impact of these cuts over this time period for my two hospitals is expected to be $120 million. beyond all the cuts we have been facing recovery audit contractor or rac program is draining our hospital resources. lake regional currently has over 500 medicare inpatient claims languishing at level of appeal worth $3.5 million in medicare reimbursement. the final challenge we face is increasingly complex regulatory environment which we operate. page 7 shows six different medicare perspective payment systems and six different medicare fee schedules we must manage with each of these systems changing on regular basis. to midnight rule that cms

implemented in 2013. also we understand the reason for the change to icb-10 this fall. we've been training extensively for the conversion. this is one more significant change in our operations we must implement with scarce funds available. both my hospitals were early adopters electronic health records and achieved stage two status. with meaningful use funding nearing an end and requirements continuing to increase this has become administrative burden to keep up with changes that cms implements. with 50 rural hospitals closing since january 2010, congress must act to prevent further erosion of health care roles in rural communities. we appreciate congressional action to protect funding we receive. hr-2 eliminates annual three of continual reduction in medicare fee schedule. provides a 30-month low volume volume and medicare dependent hospital programs and extends ambulance and home health care rural add-ons. for rural hospitals to survive

congress must continue to support programs in fact making permanent and future esequestration and medicare cuts. a lifeline for cmh which also saves money for the state and federal government. finally grant funding should be made available for rural hospitals to transit to the icd-10 and larger conversion to future care delivery and payment models. thank you the opportunity to present this testimony today. look forward to answers questions you have. >> maw, mr. wolters. dr. henderson. >> chairman cochran, chairman blunt ranking member murray and distinguished members of the subcommittee it is my pleasure to join you to today to discuss how telehealth is improving health care in rural communities. my name is kristi henderson and rural practitioner and serve as chief telehealth officer at university of mississippi at jackson. mississippi ranks bottom overall

health obesity, heart disease, diabetes and preventable hospitalizations. more than half of mississippi's three million citizens live in a rural community and almost a quarter live at or below the federal poverty level. 2/3 of mississippi's hospitals are located in rural areas and lack sufficient resources and specialty care. but despite these facts, telehealth in our state is increasing access to health care and improving outcomes and lowering costs. the umnc center for telehealth began in 2003 with a teleemergency program connecting critical access hospital emergency departments to physicians at our trauma center. 12 years later telehealth allows us to provide over 35 medical specialties to 166 sites around the state including community hospitals, and clinics, mental health facilities, schools and colleges, corporations prisons and even in the patient's home. we connect to sites in 52 of the state's 82 counties and serve an

average of 8,000 patients a month. since 2003, we have been awarded over $9.7 million in federal grants to purchase devices, conduct workforce training and enable the technology that we use to serve patients daily. this early funding allowed us to test delivery systems areas of practice, and service locations in order to craft an effective and impactful model worth reply lating. -- replicating without critical for the from fca, hrsa and others our network would be very slow to deploy taking longest to reach those with the most need. today our system is completely self-sustaining. a critical factor to our continue all sustainability is reimbursement available to mississippi. prior to 2013 insurance companies in mississippi did not reimburse for telehealth services. we argued mississippi would ultimately save money if they did and undertook a series of pilot projects to prove it.

we were successful. in 2013 and 2014, governor bryant signed legislation mandating that health insurance companies reimburse for telehealth services at the same rate as in-person services. these policies changes were the catalyst for the rapid growth of our system. while increased reimbursement may cost more in the short term, years of data from our state and numerous others prove that the cost savings achieved through better chronic disease management, fewer e.r. visits and aggressive preventative care far outweigh the expenditures. given the success we've seen in mississippi i can only imagine the exponential impact of offering similar federal parity for telehealth. i commend cms for opening new code sections for reimbursement and hope the committee will encourage them to expand coverage for more services in more communities be they rural or urban. without reliablability connectivity we can not help

patients. thanks from universe call service fines and telecom partners we can bring much health care to your mississippi. this connectivity enabling monitoring in the home changing lives in rural mississippi. lawn fall we launched a research pilot aimed at magging 200 control of diabetics through in-home monitoring and. they are sent home with ton lick tablet that monitors glucose reads daily provides educational information and transmits health data to specialists monitoring them hundreds of miles away. for the first time thesen% patients have access to a medical team dedicated to their care. ophthalmologists endocrinologists, pharmacists, nutritionists diabetic practitioners. they have already met or exceed the goals for the end of the study. with one exception none of patients went to the e.r. or

admitted to hospital for diabetes. the results are improved care at a reduced cost. we look forward to working with the committee and would like you to consider these few points. the need to test reimbursement parity at the federal level particularly for remote patient applications, the only way for us to know if the success of pilots like ours can be replicated at federal level is to test it. now is the time for cms to pilot new reimbursement parity models for telehealth especially where in-home monitoring impact is the greatest. need for coordinated federal support for telehealth. while our network has become self-sustaining it will not be complete until we reach every mississippian. the need for federal funding remains and efforts to coordinate opportunities across agencies should be encouraged. the need to remove geographic barriers for reimbursement. rural or urban, telehealth is powerful tool improving access to care and should be incentivized. we recommend geographic

restrictions for cms reimbursement be removed. lastly the need for continued support for universal service funds. a reduction of the usf funding will not only impact current operations but will significantly hinder our efforts to offer remote patient monitoring in rural communities. funding should be protected. our mission is to increase access to health care, improve outcomes and reduce costs. telehealth allows that to happen. i think the -- thank the subcommittee for the opportunity to testify and look forward to answering your questions. thank you. >> thank you dr. henderson. miss peterson. >> chairman blunt, ranking member murray and members of the subcommittee, thank you for the invitation to testify today. my name is julie peterson and i'm the administrator pmh medical center, a critical access hospital located in prosser, washington a community of about 6,000 people. pmh is organized as public hospital district and we serve about 68,000 rural residents in

two counties and five small towns. the mission of rural health care providers like pmh is to insure access to high quality, affordable care for populations that are challenged disproportionately by distance, poverty age chronic conditions and cultural barriers. many of our patients do not have reliable transportation paid sick leave and other resources that allow them to travel to receive care outside of their communities. in short, rural communities are older sicker, have poorer health status, and face significant economic challenges. it is never been easy to provide access to high quality care in these communities. and it is more difficult today than ever before. as is the case with most rural communities and hospitals, pmh is more than just a hospital. we are the backbone of the community health system. but you may think of as traditional hospital activity

makes up just slightly more than a quarter of our business today. in my written testimony i included an extensive list of the non-hospital services that we provide. everything from primary care to our 911 ems service. we are a fully integrated delivery system dedicated to meeting health needs of our community in a coordinated way. but the current reimbursement system does not recognize that reality. reimbursement is siloed. there are as many ways that we get paid as there are services that we provide. this makes the sustaining a coordinated health system for our community very difficult. for example, i need to be moving forward to create medical homes for my residents. i need to be integrating behavioral health and medical health in my rural health clinics but there are some reimbursement variables that i can not assure my board that we can sustain these programs. the current fragmented financial

system destablizes rural health. another challenge we face is that many people in our area remain uninsured. that is despite the fact that our state had a very successful medicaid expansion program. we provide coverage to 535,000 additional washingtonians through expanded medicaid and the health insurance exchange enrolled another 170,000 wash to inians. these efforts need to continue. rural communities also face greater shortages of health care professionals than their urban counterparts. as a ceo, physician recruitment is a constant activity for me. i have a aging workforce, and our doctors are still required in many cases to participate in call which is not the case in urban areas. so they work very, very long hours and they see far more complex cases in the clinic setting. hrsa programs like the national

health service corps and the nurse training initiatives enable many communities like mine to attract providers they need. these challenges are unique population, the fragmented financial system and workforce shortages make it very difficult for rural health care facilities to survive. we need flexibility. in washington as senator murray pointed out, we've identified about 10 very small critical access hospitals that might be facing imminent closure. that awareness led the association, the department of health, the state office of rural health and others to begin seeking new delivery system models. our goal in washington is to develop and test one of these new models within the next 12 to 18 months. that is a very ambitious timeline but it is justified in view of the plight of some of these smallest facilities. one invaluable tool in this effort is the cmmi grant that

provides $65 million to the state for the healthier washington initiative. we also have two rural hospitals collaboratives that are funded in part through hrsa grants that are working with critical access hospitals and rural clinics to pioneer rural clinic development and outreach. the federal office of rural health policy and washington office of rural health have been generous partners in these efforts. we will need continued help from these offices and from cms if we are to succeed. finally would like to take a moment to brag a lip bit about the leadership shown by all of our washington hospitals in advancing quality of care and patient safety. the centerpiece of this effort was an $18 million grant that funded our hospital association's participation in the hospital engagement network. this quality and safety improvement work, this

$18 million grant, has generated $235 million in health care savings through reduced readmissions, fewer hospital acquired conditions and healthier babies. that is just one example of how our rural hospitals are preparing for a future where measuring quality, efficiency, and service will be essential. we are ready to demonstrate our value to partner hospitals, health plans and to our patients. rural providers are dedicated to insuring insuring that the people who live in rural communities have access to the highest quality, affordable medical care. i'm optimistic that we can achieve this goal. the programs that we're discussing at this hearing today are valuable tools on that journey. thank you. >> thank you, miss petersen. mr. stover. >> mr. chairman, and members of the committee. thank you for the opportunity to speak to you today. my name is george stover and i serve as the chief executive officer of hospital district number one of rice county in

lyons kansas. lyons is a community in north central kansas with a population of 3800. our community hospital which first opened in 1959 is, 25 bed, critical access hospital that employs 150 individuals. rural community hospitals have a long and distinguished commitment for providing care for all who seek it 24/7, 365. more than 36% of all kansans live in rural areas and depend on the local hospital serving their rural community. rural hospitals face a unique set of challenges because of remote geographic location small size, scarce workforce, physician shortages, higher percentage of medicare and medicaid patients and strained resources that limit access to capital. these challenges alone would make it very difficult for many rural hospitals to survive.

one disturbing challenge at that is becoming more increasing prevail end added regulatory burdens being placed on health care providers. more specifically i would like to briefly touch upon the challenges related to medicare policy of direct supervision of outpatient therapeutic services and 96-hour physician certification requirement. in 2009, the center for medicare & medicaid services issued a new policy for direct supervision of outpatient therapeutic services. that hospitals and physicians recognized as burdensome and unnecessary policy change. in essence the new policy requires that a supervising physician be physically present in the department at all times when medicare beneficiaries receive outpatient therapeutic services. as a result, many hospitals have found themselves at increased risk for unwarranted enforcement actions. while the congressional action last year to delay enforcement was applauded by rural hospitals like mine the protections afforded them under the legislation expired at the

end of 2014. rural hospitals are again at risk for exposure to unless congress takes action. the 96-hour physician certification requirement relates to the medicare conditions of participation on a day for critical access hospitals. the current medicare condition of participation requires critical access hospitals to provide acute inpatient care for a period that does not exceed on an annual average basis 96 hours per patient. in contrast, the medicare condition of payment for critical access hospitals requires a physician to certify that a beneficiary may reasonably be expected to discharged within 96 hours after admission to the critical access hospital. as a real hospital administrator the discrepancy between conditions ever participation and conditions of payment have caused confusion and challenges. equally troubling, the president's fiscal year 2016

budget proposed, proposal calls, calls for critical access hospitals reimbursement to be reduced from 101 to 100% of allowable cost. this reduction, which would be on top of the 2% reduction associated with sequestration, would effectively eliminate any opportunity for financial margin. further the recent consideration by congress on the trade promotion authority bill that extends sequestration cuts on medicare providers potentially exacerbates our financial challenges. toward that end, a recent analysis within our state showed that 69% of rural kansas community hospitals had a negative medicare margin. the average rural medicare margin was a negative 9.3%. as a result of this trend and the fact that many rural hospitals serve a higher percentage of medicare beneficiaries many rural community hospitals in kansas

must seek some form of direct tax support from their local communities. in summary it is critically important our rural communities across the nation are able to access quality health care services. therefore steps should be taken to minimize the regulatory burdens placed upon rural health care providers. . .

to support a healthy washington initiative efforts to improve care statewide that will reduce costs and stabilize some of our rural hospitals. what if you found to be the most significant barriers to integrating care in the first year of this effort? >> at this point, and you're right it is very exciting what's going on in the state of washington, i would go back to that fragmented reimbursement system could not only are the incentives different based on what line of service you're providing, but as my colleague mentioned about iraq's and the amount of time it takes to reimburse some of these systems it's years before you what our true financial condition really does. i would call out that fragmented reimbursement system but we also need current relevant data to move forward with when we talk about value-based purchasing and population health.

so i would say stability in reimbursement is one of the barriers. and the others just a true reliable database for rural residents. >> okay talk to us about some of the specific reforms that we can expect to be seeing implemented in the first year of this. >> what i would expect to see businesses continue to move towards value-based purchasing and defining quality. and again i think washington state has done an excellent job of doing that. and led by the washington state hospital association, all of the hospitals in washington are participating in reporting their quality data. so the rural's are right in there. i would expect that's going to continue to happen. what i would like to see is more focus on what is relevant in rural communities. when we report and hospitals compare them to the point that data has gap for our rural

facilities because we are not measuring those things that are occurring and really contributing towards quality outcomes and reduce costs in rural hospital. >> such as? >> our hospital-acquired conditions, our ability to reduce readmission from our emergency department and our inpatient. one of the grants you mentioned the committee paramedic program is actually posted my my hospital and it's been a tremendous success taking our ems resources out into the community to see people after they've been discharged make sure they're following their discharge instructions, getting their prescriptions filled and that they've made that primary care follow-up. so those are some of things i would like -- >> is fascinating to me that just that human touch with somebody, making sure they take their medication or they follow up what was told to them when you left the hospital reduces cost in the long run. >> it does.

and there in their own home where they can think through the questions. we also get a look at the home and environment to make sure it's safe and appropriate. it's a great program. >> i'm looking forward to more on that. one last question. what more can cms do to help rural communities make greater use of telemedicine? >> telemedicine in the context we should talk about is a direct link between the patient and to provide in a remote location or a patient talking to someone at an academic medical center. in our facility we also use telemedicine to support our local providers. so they can have that consult discussion with somebody at the university of washington or someone at swedish. cms right now, and i think mr. cavanaugh answered some questions about the metropolitan statistical area restrictions that we have. that's a great antiquated assumption that if you increase telemedicine you're going to increase costs your contact

you're going to take that very scarce workforce that we have in rural america and you going to be able to extend it. it will be more efficient and you will create access in our community. >> thank you very much for being here and your testimony. i appreciated. thanks, mr. chairman. >> senator cochran? >> mr. chairman, doctor henderson company mentioned in your testimony that the reimbursement parity issue was an important factor in the growth of services that are rendered through television and telehealth services. the diabetes pilot project you described are really remarkable and, obviously, highlight the potential for significant cost savings if they could be expanded into communities across the country. what did you see it as the programs that could be expanded?

amitabh the diabetes project -- pilot project? is the possibility to serve more communities? >> we can expand the diabetes program to other geographic regions but we can also expand it to other chronic diseases. that program in particular is a remote patient monitoring program where we are helping to educate with patience to educate with patients and their own, their disease and keep them healthy. and using the resources in that community more efficiently. .com telehealth perspective it really is about connecting and coordinating all the care team not just the physician services come into nursing interpreters case managers, patient navigators. once you this infrastructure you can connect any of those resources to bring what would only be at an academic medical center to a rural community. >> thank you for your leadership leadership. we think we benefit from these experiences that you described

for us today, and i hope we can help achieve those goals of expansion and improved access for less cost. >> thank you. >> mr. moran? >> mr. chairman again i think very much for conducting to see the and i appreciate our witnesses. thank you for what you do in your communities. let me start with the kansan. welcome to our nation's capital. thank you for coming from kansas to testify. i want to go back to what i was trying to raise with the previous panel about actual cost-based reimbursement. can you give us an idea of even though presumably you receive 101% of costs, what really, what percentage of actual costs are covered by the reimbursement? you might start by telling us the percentage of your patients are medicare and medicaid what is your mix is either public or taxpayer support for your hospital? how do you make this work even

though presumably the images you're getting 101% of your cost? >> thank you, senator moran. within hospital district number one of rice county, our medicare volume is about 63% medicaid volume of about 10%. we are a taxing entity. we are able to appropriate tax funds from our district which is about $900,000. what's interesting with that number, in our fiscal year ending in 2014 we ended up having to write off nearly $800,000 to medicare bad debt. so that essentially washes itself out. when it comes to the cost base

you are absolutely right. our reimbursement of 101% does not equate to our total cost of providing health care within our facility. i would not knowing that number off the top of my head exactly but i would say it's probably around 75-80% margin, which covers our costs. we have to look towards our local tax base to make up that difference or otherwise start looking at reduction of services which we do not want to do. >> ages to be the hospitals would tell me that that mix that 70% some medicare, medicaid i suppose you do everything you can to cost shift of those to those of private insurance, and are those opportunities available now is it better to have a medicare patient, a private pay patients them and medicaid patient as far

as revenue? how do you compensate for less than the actual reimbursement of costs? where do you make of that money other than taxes? can you do it with private pay? >> we work towards our uninsured, our private pay in their struggles. but, no it doesn't come towards speedy let me ask the question this way. are you pleased with blue cross and blue shield covered patient walks in the door? does that mean is this a better deal than if it was medicaid or medicare? >> we look forward to the blue cross blue shield they can come into our facility. >> the percentage of those who come in the door is a small percentage? >> a very small percentage yes sir. sir. >> you mention uninsured and having to write off cause. i'm not trying to portray this in any partisan or the way this issue is look around here too often but under a affordable care act, a theory this would be

more people injured. has not proven to be true in light of what you just said about hoping that the private insurance covered patient walks in the door? >> we have seen a small increase of those individuals that are once uninsured. we found them to be enrolled in medicaid in our state based nco program that we have. we have seen a small increase in the marketplace of those that once did not have insurance but otherwise founded on the marketplace. but when you look at the overall, that is a very small percentage of those individuals. they still find themselves uninsured. >> some hospital administrators have told me that even with additional insured, that the copayments and deductibles are higher and therefore, a bad

debt expense has increased even with those who have insurance. i think the way i described this is somebody who had a $100 copayment could come up with $100, but if it's a $5000 copayment, they can do that so you end up writing off more even though there might be a slight increase in injured? >> that is correct. we are finding that even though the co-pays in the past have been lower we are finding that the co-pays now those individuals are now on a payment plan and in turn sometimes we are having to write those off. >> let me ask a broader question. perhaps to dr. henderson but ms. peterson talked about telemedicine as well. i just would like to the summit of the costs associated with the telemedicine and now they're paid for. as i was listening to testimony i jotted down three things i think that a hospital would have to pay for the equipment.

i'm interested if you could just i'm sure you've told us in your testimony but i'd like to get this in a short summary so that i can understand it. you have to be good how to pay for the equipment. you've got to be good how to connect and how that is paid for. and then finally how does the provider get reimbursed for providing the service? my question that there is when the university of kansas medical center in kansas city provides telehealth to the rice county district number one hospital is there a reimbursement to the physician who is present in kansas city at the major hospital? the is there any reimbursement but then comes to the hospital that is providing this service at the other end? >> so your points are absolutely correct. there has to be a purchase of equipment, has become active and you need to pay for the medical clinical services delivered, so that i could. how we are doing it in our state, our center for telehealth

is providing all the equipment. so thanks to some of the federal funding dollars unable to deploy that. so that is not up front capital cost. >> i know you're talking that mississippi but would that be true general across the country that there are grants available for the equipment? >> the majority of all of these programs have started off with grant money. and in our state were able to pay the provider who delivers the services. for telehealth physician or nurse practitioner, whoever is paid these are professional eat the reimbursement and speedy hear your talk about the provider in the rural setting? >> i'm talking about the other side. solicitation incident can be a facility be built and that can be reversed as well. that helps to offset their costs for facilitating that interaction. typically that's not a provider to provider because both providers cannot be paid for the same service but if you have a generalist with a specialist and they both do an exam, then they both can build.

>> you have a general practice physician at rice county district number one at a specialist, both of them can build? >> if they are doing different services, yes. >> so that is not disincentive to a provider to make this happen? >> as long as you're in a state that allows for parity reimbursement. >> i will have to figure that out. finally, let me ask you to clarify for me when we talk about that reimbursement, does it matter who is providing the insurance, medicaid versus medicare versus private insurance? is the answer the same in all three setting? >> it's not and it depends on your state with the legislation allows for, and then medicare has geographic restrictions as well that we have heard. but in our state all public and private payers and mississippi medicaid included have a parity reimbursement for telehealth. same as in person.

>> chairman blunt due out me to stop or asked one more? >> one more. >> mr. stover or maybe this'll make senator blunt happy, mr. wolters, how does a work in missouri as far as medicare versus medicaid versus private pay for telehealth? mr. stover, how does it work in our state? >> i get into that industry missouri. we've invested heavily in telehealth. using grant funds for the equipment. the problem is the geographic restrictions are such that we have a network of 12 rural health clinics we operate. they are rural for purposes of being on the medicare program. for of those are considered urban for telehealth purposes. so the patient is in that rural health clinic and then they are not covered by medicare and cannot access the telehealth services. we also have six long-term care facilities that we operate. two of those six are in urban

locations. so there are times when the patient had anything going on at the long-term care facility. we would like to but doctor c. the patient but if it sat in urban facility then again it is telehealth. we essentially had to transport the patient by ambulance over to the er to ask mr. that probably could have been provided by telehealth except for the fact that medicare defines that as an urban facility. facility. >> from a reimbursement of costs of the medicare trust fund, that doesn't make any sense. >> no sir. >> mr. chairman, thank you. >> use all of your time and all of my time there. astounding. >> missouri and kansas for operating. >> exactly. you mention journey health attacks provided i think you said about $900,000 a year but you lost $800,000 in medicare baghdad, is that what you said? >> yes, sir. >> how would you medicare, i'm sure there's a simple, everybody understands this but i don't.

how would you medicare baghdad? >> it's a bad debt that we recognize on the medicare cost report. >> okay, it's not bad debt at the medicare system owes you -- >> that's correct. >> in your reporting to medicare you reporting of $800,000 of that debt. >> that's correct. >> that's helpful to me to understand. mr. wolters, i saw this ap story out today in a deputy new story out today on harvard study that indicates, i the one or 95 hospital closures nationwide that there was very little impact on patients unless you were in rural settings. that headline says in rural missouri but reading the article it's clear that the main rural, it's a missouri story but it may mean rural settings anywhere. hewitt close to cms in bolivar the hospital in occiio closed. they want to talk about what you did, what your system did there to try to alleviate some of that

loss of service because thank you, senator. the hospital in occiio of about 35 miles north of bolivar close november 1 and of course, that represented a loss to the kennedy. noble inpatient bed no more emergency room and lost quite a few health care jobs. we did step forward. we taken over the operation of the invalid service. way to go the operation of the rural health clinic. we've converted that clinic into a walk in clinic that is open seven days a week 12 hours a day. so they can provide access to patients in that area. we taken over the operation of retail pharmacy that they had the only pharmacy in town and we've added rehabilitation service of physical and occupational and speech therapy services. we've tried to provide outpatient care and provide the ambulance care to transport them to whatever hospital is appropriate when a patient has a need for emergency care. so we've tried to alleviate the loss to the community.

against that serve as a severe loss to osceola. >> and i think their payer mix looking out on the hospital most exactly the same pair makes that you describe, mr. stover and maybe ms. peterson, about the same pair mix you have spent my system is about 65% medicare medicaid. >> how much uninsured speak with about 7% at this point. >> said medicare and medicaid is 65% 7% uninsured and the rest of your patients have some kind of covert? >> some sort of commercial coverage, correct. >> on rac audits, did you mention your 500 claims currently? >> that are still sitting at the alj level, and the backlog at the hearing center for alj. we've had about 1000 denials over all the best for five years. we've appealed 85% of those denials. of those that haven't heard at any level of appeal we been successful about 90% of the time

in overturning a denial. but the vast majority of the appeals are still sitting at the alj level and probably will be for another couple of years. >> has seen a suspended rock art is because there is no appeal process right now or are you continuing to have those? >> at this point they are we work in the contracts for the rac soviet suspended activity while they are renewing the contract. cms has to deal make some changes in the rac program. it appears to us that the changes may not go far enough in terms of trying to correct what is wrong with the rac program. overly aggressive incentives of recovering auditors to deny claims and take there percentage fees regardless of the fact that most of those get overturned the there's no penalty to the rac auditor at this point. sometimes they pay the money back sometimes they keep it but they keep it for several years.

>> of the 500 claims and a three-point $5 million you had to give, you had to return that money to? >> right. the money is gone right now. we are just waiting for to hopefully come back somewhere down the road. >> if your past history was right, the autism and neighborhood of 90% you get the money back but, of course, you don't know when you get it back and these of the money is gone. you can't plan to get it back. >> yes, that's correct. >> what is your rac audit history, or just your views on how that system is working? >> i couldn't agree more that the incentives don't align with illegitimate helpful audit process. coding and determining whether someone is an observation patient or an inpatient is very complex. and we do welcome to billy to review those that go to illegitimate audit process. the problem is the essentially bounty paid claims so they get

nine to 12% or whatever the present is of any kind that they overturn, or that they did not forget also have the ability to look at the entire record and second-guess that the decision is on the patient at 2:00 in the morning in the er. so they're looking at a closed record of four day length of stay that er physician had the information that had been the patient at that time. i think the other thing is it's a very, very long window that they can go back and denied those claims and review those claims, and that also needs to be shortened up. >> mr. silver? >> within our facility, been a critical access hospital, we are maybe the outlier that we have not had any particular rac issues of such. equipment minor ones, but we have not been, i guess we're just the outlier. but within kansas we have a number of my colleagues and

those facilities out there that are faced with a continuance of having to fight for or prove through their appeal process. >> is this process different for critical access hospitals? >> i'm not aware individually. >> so you happen to be a critical access hospital but you don't know why that it directory to devastate with that is correct. >> one of the major areas -- >> i'm using the moran standards so i have another three minutes. >> one of the big areas that they're looking at is the decision could not or cannot admit a patient or one difference with a critical access hospital is the inpatient outpatient if it is the cause reverse, less of an impact on medicare reimbursement because they get paid for the care whether can't inpatient or outpatient.

for pbs hospital like lake regional we get paid higher payment for an inpatient admission and for an observation paper the significant difference in the level of payment and that's what -- >> one of the major items on is what he should have put the person in the hospital or not? >> exactly. they are not questioning they care we provide. they acknowledged the patient needs to be there. pages initiative and observation patient and that changes the level of reimbursement we get. that's what that's what most of the activities of the pbs aside there look at critical access claims in some areas. >> i've been told on the hospital wage index that rural hospitals can constantly form more and more behind compared to counterparts in other places. what you think it would be an accurate statement? >> yes, it is a. because the data that seem is used to determine which indexes several years old and what happens is as that wage data goes down your paid less

therefore you must dispense our. it becomes a cycle where you end up paying less to your staff. you don't get the pay increases and maybe an urban hospital would give so you constantly gradually fall behind urban areas and so that does become a problem in rural areas. >> similar observations on wage index from his petursson or mr. stover? >> the wage index relative to critical access hospital reimbursement is not as significant as in a pvs setting it however the idea that physicians and especially trained nurses and phlebotomists and technicians can be recruited to rural areas for less than they would earn into urban areas is simply not true. we compete on a national level for these very very scarce resources. >> same observation, mr. stover? >> yes, mr. chairman. i would agree with my colleague. >> dr. henderson my last

question would be on telemedicine, are you getting reimbursed committee of the behavioral health also? >> we do. >> are you be dashed are getting reimbursed the same way would be for all other health items? >> we are. >> and your goal is to recapture all costs? >> correct and integrate these dashed and pay for health and medical clicks as well. >> do you have any studies yet that would indicate how much better people do with their other health problems if your data with their behavioral health problems at the same time? >> it's interesting and a diabetes program a component of the program is around medical appearance and lifestyle and behavior changes, which needs a strong mental health component as well for behavior change. we are incorporated into that, we are not through the study at to go to publish it but we are offering now mental health services on college campuses and in schools. it's one that will continue to grow and probably one of our

biggest demand right now. >> my personal belief that certainly societally defeated with mental health like it's in every other health issue, that the cost comes back many, many whatever you spend comes back many times but my personal belief is even in health care context that you do with every other of issue in a more effective way if you do with behavioral health like it's a health issue rather than you've got less lesser reimbursement, less of a commitment, whatever that hope we can get there. i'm glad that you're getting there on your telemedicine program there any other questions? senator moran, which are like a main? >> no, thank you. >> let's appropriately close out. we believe the record open for a week for questions to be submitted. we thank our panel for coming,

and we are going to adjourn until 10 a.m. on thursday april 16. thank you all for being here. that can't be right. may the 16th? on may 16. thank you all. [inaudible conversations] >> we go live now to the senate here on c-span2 and on today's agenda, trade promotion authority, also known as fasttrack. that would give the president the authority to negotiate trade deals and require an up or down vote in congress without any

changes on those trade agreements. we are expecting about today at 5 p.m. eastern on an amendment to the trade bill and a procedural vote on whether to further move forward with this legislation. also today, two items painting that that's and is expected to take up before leaving for the memorial day recess. one is surveillance by the nation's good agency. some of those provisions we know are expiring at the end of this month. there's also the highway funding bill. that money runs out at the end of the month and the house passed a two-month extension and if the senate does not follow suit federal money for mass transit would dry up to a very pa busy day in thest senate with a of possible weekend session. you see it all live here on c-span2. the guest chaplain: let us pray. o lord, our god, restorer of the

joy of those who find you. lord we praise your holy name. thank you for giving us lifetime favor and for your unchanging faithfulness. lord you clothed us with gladness. today we pray for our senators. shine your light of wisdom on them and be gracious to them. remove from them contention and strife and as you infuse them with humility lord, keep your arms of protection around them and their loved ones. in these challenging times. rule in the midst of your world

until the kingdom of earth will acknowledge your sovereignty. we pray in your great name. amen. the president pro tempore: thank you pastor. please join me in reciting the pledge of allegiance to our flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god indivisible, with liberty and justice for all.

mr. mcconnell: madam president? the presiding officer: the majority leader. mcminimum wage a glad the senate vote. mr. mcconnell: i'm glad the senate voted yesterday to take another step forward on important trade legislation that is before us. this bill represents an opportunity for republicans and democrats to stand together for the middle class. so i hope our friends across the aisle will allow us to seize this opportunity and i'm optimistic. we all know that trade is important for american workers and american jobs. and we all know that by passing this legislation, we can show we're serious about advancing new opportunities for bigger american paybacks -- paychecks better american jobs, and a stronger american economy. now, we want to process as many

amendments as we can. the republican and democratic bill managers, senator hatch and senator wyden have done a great job managing this bill in a bipartisan spirit thus far. my hope is that with some cooperation across the aisle we can vote on some amendments today and complete our work on this trade legislation today. i appreciate all the hard work from both sides that got us to the point we are today. let's keep the momentum going so we can finally pass a bill that republicans, president obama and many democrats all agree is good for the middle class good for the economy and good for our country. let's also move forward in the same spirit to finish our work on the other two important issues on the senate's to-do list. i'll speak about one of them in just a moment, but the point is, we have to get our work done, however long it takes. with the bipartisan cooperation we can get it done as soon as

this afternoon. now, on the issue i mentioned following the attacks of september 11, the united states improved its laws and legal authorities in an effort to better understand the terrorist threat rather than the threat -- rather than to treat it as a crime to be handled by civilian prosecution, to combat it as a matter of warfare not as a crime but as a matter of warfare. but that doesn't mean al qaeda and its affiliates stood still. the terrorist threat metastasized into regional affiliates such as al qaeda in the arabian peninsula al-shabaab al qaeda in iraq, and aqim. we've all seen the advance of the islamic state in iraq and the levant, which despite coalition air it attacks and iraqi ground operations actually seized ramadi last weekend.

though isil has broken from core al qaeda it's emblematic of how the threat continues to evolve. last week the director of the f.b.i. explained how isil operating from safe havens within syria is now using social media to radicalize americans by making contact through twitter and then directing them to to crypted venues. moreover through the publication of online magazines al qaeda and isil are able to radicalize recruits and reveal the tactics needed for small-scale attacks here at home. these tactics along with information gained by terrorist networks from the unlawful disclosure of classified information by edward snow snowden challenged counterterrorism experts. this all comes, madam president at a moment of elevated threats to the american people. let me read you some of the

"l.a. times" recently reported. this is what the "times" had to saivment "alarmed by the growing threat from islamic state the obama administration has dramatically stepped up warnings of poe teption potential terrorist attacks on american soil after several years of relative calm. behind the scenes, u.s. authorities have raised defenses at u.s. military bases put local police forces on alert and increased surveillance at the nation's airports, railroads, shopping malls energy plants, and other potential targets driving the unease are f.b.i. arrests of at least 30 americans on terrorism-related charges this year in an array of lone wolf plots, none successful but nearly all purportedly inspired by islam hike state propaganda or appeals." i'd ask that that article be

included in the record at the conclusion of my remarks. the presiding officer: without objection. mr. mcconnell: we need to recognize that terrorist tactics and the nature of the threat have changed and that at a moment of elevated threat it would be a mistake to take from our intelligence community any -- any -- of the valuable tools needed to build a complete picture of terrorist networks and their plans such as the bulk data collection program of section 215. the sphwel generals intelligence community needs these tools to protect us from these attacks. i'd like to quote the observations that someone intimately familiar with this program made in the aftermath of the unauthorized leaks of classified material by edward snowden. this program does not involve the content of phone calls or the names of people making calls, he said. the instead it provides a record of phone records and the times and lengths of calls

metadata that can be queried if and when we have a reasonable suspicion that a particular number is linked to a terrorist organization. he then described why the program was necessary. the program grew out of a desire to address a gap identified after 9/11, he said. one of the 9/11 hijackers khalid al binjah, made a phone call to a safe house in yemen. n.s.a. saw that call but could not see that the call was coming from an individual already in the united states. the telephone metadata program under section 215 was designed to map the communications of terrorists so we can see who they may be in contact with as quickly as possible. let me say that again -- as quickly as possible. this capability could also prove valuable in a crisis. for example if a bomb goes off in one of our cities and law

enforcement is racing to determine whether a network is poised to conduct additional attacks, time is of the essence. being able to quickly review telephone connections to assess whether a network exists is critical to that effort. he concluded by noting the review group turned up no indication that this database has been intentionally abused. no indication that this database has been intentionally abused. and i believe it is important that the capability this program is designed to meet is preserved. now, the person who made those observations that i just quoted was president obama and he made them just last year. just last year. unfortunately, there is now a huge gap between the capabilities the president rightly recognized as being necessary for our intelligence professionals and the legislation he's endorsing

today. the untried and as of yet nonexistent bulk collection vision envisioned under that bill would be slower and more cumbersome than the one that currently helps keep us safe. at worst it might not work at all. due to many other problems -- the lack of a requirement for telecommunication providers to retain the data to begin with. no requirement to retain the data. last week the obama administration briefed senators on the current bulk data program under 2156789 senators were impressed with the safeguards built into the current program and they were impressed that there had not been one incident -- not one -- of abuse of the program. but many senators were disturbed by the administration's inability to answer basic yet critical questions about the alter national bulk data program that would be set up at some point -- at some point -- under

the legislation the administration now supports. the administration could not guarantee whether a new system would work as well as the current system and the administration could not guarantee whether there would be much if any -- if any -- data available to be analyzed under a new system given the lack of a data retention requirement in the legislation. and despite what the administration told us just last week about its inability to guarantee that this nonexistent system could even be built in time it did an about-face earlier this week -- sort of -- the administration had the director of n.s.a. write that the nonexistent system could be built in time if -- if -- the providers cooperated in building in and of course they aren't required to. the problem of course is that the president providers have made it abundantly clear that they will not -- not -- commit to

retaining the data for any period of time, as contemplated by the house-passed bill, unless they're legally required to do so. and there's no such requirement in the bill. for example one provider said the following: "we are not prepared to commit to voluntarily retain documents for any particular period of time pursuant to the proposed u.s. freedom act if not otherwise required by law." so far from addressing the concerns that many have had about the u.s. freedom act the administration in its letter only underscored the problems. it said that the only way this nonexistent system could even be built in time is if the providers providers cooperate but the providers have made it abundantly clear they will not cooperate, and there is nothing -- absolutely nothing in the bill that will require them to do so.

this is just as cynical as the letter from the attorney general and the director of national intelligence that assured us that they would let us know about any problems after the current program was replaced with a nonexistent system. let me say that again. this is just as cynical as the letter from the attorney general and the director of national intelligence that assured us they would let us know about any problems after the current program was replaced with a nonexistent system. boy, that's reassuring. this is beyond troubling. we should not establish an alternate system that contains a glaring hole in its ability to function; namely, the complete absence of any requirement for data retention. now, i've begun the legislative process to advance a 60-day extension of section 215 and the other two authorities that will

expire soon. this extension will allow for the intelligence committee to continue its efforts to produce a compromise bill we can send to the house that does not destroy an important counterterrorism tool that's needed to protect american lives. mr. reid: madam president? the presiding officer: democratic leader. mr. reid: i think everyone knows that i disagreed with the reasoning for the trade bill. and based on my experience in looking at trade bills that have passed in congress in the years past it's not going to help the people i want to help. i'm happy that multinational corporations are doing well, but my first goal is not them. itsz -- it's people who work for a living, middle-class americans

who work so hard, first of all to find a job. once they find a job they do everything they can to hang on to that job. and the trade bill is another example of how we have ignored in this congress working men and women of this country. i so admire our ranking member of the banking committee senator brown indiana -- i'm sorry, of ohio of course. he's done a remarkably good job of pointing out what is wrong with the trade bill. it passed and i understand this. i accept this. the vast majority of democrats opposed it, but there are some who didn't. and i respect them and i respect their judgment. i'm not here to criticize them. i'm here to criticize the underlying legislation which on everything else we haven't done

here in this republican-led senate has done nothing to help the middle class. it doesn't matter what you look to: minimum wage, equal pay for men and women the burden of student debt and of course the tremendous lack of impetus to do something about our surface transportation system, our highways. we have 64,000 bridges in america that are structurally deficient. 50% of our highways, roads are deficient. and we do nothing. likely what will happen here in the next day or two is that we will extend the highway authorization for 60 days. it should be pretty easy to do because we've done it 32 other

times. since republicans came to town and started flexing their muscles, we found a situation where they are unwilling to help middle-class americans. think about that. 64,000 bridges that are structurally deficient. now does this really matter? talk to people in minnesota. one of the bridges that collapsed, 13 people died. of course that matters and we are ignoring it as a congress. that's not right. ray lahood, a republican who was secretary of transportation for president obama for a long time said our transportation system should be called the pothole because that's all the highways are any more. so the trade bill is an example of not helping the middle class. it's an example where we focus

on multinational corporations. my friend, the republican leader talked about the fisa bill foreign intelligence surveillance act. i have the -- the republican leader and i are friends. we served together for decades here in this body. but with all due respect to him i think i take the word and the opinion of the head of the f.b.i., attorney general of the united states, the man who is in charge of all of our intelligence -- james clapper -- who have said without any question that the bill that passed the house of representatives by almost 390 votes is what we should be doing here. among other things, in a letter that they wrote to senators

leahy and lee -- quote -- "the intelligence community believes that the bill preserves essential operational capabilities of the telephone metadata program and enhances other intelligence capabilities needed to protect our nation and its partners." i repeat, the bill passed by a four-to-one margin in the house of representatives. my friend talks about -- my friend the republican leader, talks continually about bipartisanship. we got one a piece of legislation for one of the rare times out of the house here's bipartisan efforts made and it worked. they passed this bill. and we should do the same before we leave here rather than, again, extending a program that there's efforts made to extend a program that's already been declared by the second circuit court of appeals of the united states already declared a

illegal. how can we extend an illegal act? but that's what some of the talk is from the other side of the aisle. i think that's unfortunate and i think that we should make sure that before we leave here we do what our intelligence community suggests to us and in very strong words that we simply move forward on the legislation that has a name that certainly maybe says it all and that is the united states freedom -- u.s.a. freedom. that's what the legislation is, and we should pass that. i know that there's work to be done on the trade legislation and i'm happy to work with senator brown senator wyden and anyone else who has a way of moving forward on that. the presiding officer: under the previous order the leadership time is reserved.

under the previous order the senate will resume consideration of h.r. 1314, which the clerk will report. the clerk: calendar number 58, h.r. 1314, an act to amend the internal revenue code of 1986, and so forth. mr. hatch: madam president? the presiding officer: the senator from utah. mr. hatch: madam president as we resume the debate of our nation's trade policy, i want to take a few minutes to provide an update about where things really are, where we're going and the possibility of a path forward. we took a big step yesterday and i want to thank all my colleagues who voted for cloture, once again for helping us get closer to the finish. i'm of course aware that a number of senators have concerns about the process and amendments. i understand those concerns. as i said yesterday, i would have preferred a different path for moving this bill. it was always my preference to consider more amendments and have a fuller debate on these important issues. i know that's what the majority

leader wanted as well. sadly, there were some who just did not want to cooperate. and instead of moving directly to the bill, we had to negotiate around a filibuster. and instead of bringing up and debating amendments, we spent a lot of time trying to address concerns and overcome objections. i'm not going to point fingers and complain about anyone who chooses to exercise their rights under the senate rules to slow down the debate. we're all well aware that a number of senators would love to prolong this debate forever to keep the t.p.a. bill from passing. but with a bill this important we had to find a way forward which led to a cloture motion and yesterday's vote. but even now that cloture has been invoked i'm working to find a reasonable accommodation to address senators' concerns. both sides worked late into the night to try to come up with an agreement on time and amendments

to give senators an opportunity to make their case. up until now no deal has been reached which from my point of view is unfortunate. keep in mind, under the rules we don't have an obligation to do that bend over backwards to try to solve this problem but so far no deal has been reached. i'm still willing to work with mile colleagues to address -- my colleagues to address their concerns though it is becoming increasingly clear some concerns are beyond accommodation. i'm always an optimist. as i said yesterday if any of my colleagues have a reasonable proposal to solve this impasse and allow us to consider more amendments i'm all ears. as of right now cloture is invoked and only germane amendments can be considered without an agreement. until that time, however one thing is clear. absent an agreement on time and votes, the senate will deal with pending amendments and vote on

whether to invoke cloture on the t.p.a. bill this evening. i am of course more than willing to wait that long, but i'm sure there are many in this chamber who would prefer to see a solution come together before then. so let's work together. let's find a way to hear more amendments and address more issues. i hope people will be willing to work with us on a reasonable path forward. but if not it appears that the clock, more than anything else, will determine how this debate will unfold. madam president, later today the senate will vote on the portman-stabenow currency amendment -- manipulation amendment. up to now we've all heard more than our fair share of arguments about this amendment. i want to take a few more minutes today to express my opposition to the portman-stabenow amendment and to explain to my colleagues why they should vote against it. i want to reiterate madam president, that the obama administration has made it abundantly clear that if this amendment gets adopted

president obama will veto the t.p.a. bill. so as i've already said a number of times a vote for the portman-stabenow amendment is a vote to kill t.p.a. that would be indeed tragic. i know that all of my colleagues are aware of the statements made by secretary lew and the white house on this matter. i also know that a number of my colleagues who support portman-stabenow have said that they don't believe the president would veto the t.p.a. bill over this amendment. well, let's say for the sake of argument that they're right. but only for the sake of argument. let's assume that the administration is bluffing. should we call that bluff? should we pass the amendment and dare the president to make good on his veto threat? the answer to that question, madam president, is an emphatic "no." even if you take veto threats and the administration's opposition out of the equation, one fact still remains: the portman-stabenow amendment is

bad policy for america and is far too risky. earlier this week i laid out four separate negative consequences that would result from the portman-stabenow amendment. and i'd like to reiterate those concerns here today. first, the portman-stabenow amendment would derail the trans-pacific partnership. once again we know that this is the case. i've chatted with japanese leaders, and they tell me this is the case. and that's a very, very important aspect of what we're trying to do here is to get japan for the first time to agree to a trade policy that works. i think we have a new leadership there that wants to agree and we ought to help them. none of our negotiating partners would sign a trade agreement that included the kinds of resumes mandated by the portman-stabenow amendment.

we've already heard from countries like japan that they would walk away from the agreement if the u.s. started making these types of demands. furthermore, the u.s. would never agree to these types of demands either. what country would willingly sign a trade agreement that would subject their monetary policies to potential trade sanctions? no country that i'm aware of. i've heard some of my colleagues respond to these claims the same way they respond to the president's veto threat. they don't believe japan when they say they'll walk away from the t.p.p. or they say that any country refusing to accede to these types of standards must be planning to manipulate their currency. now, i'm all for healthy skepticism around here, but maybe, just maybe if our government as well as all of our negotiating partners all say that portman-stabenow is bad policy that they can't sign on to there's got to be something to those claims.

guess what, madam president? there is something to them which brings me to the second negative consequence that we'd see under the portman-stabenow amendment. it would put the federal reserve's independence at risk and subject our own monetary policies to trade disputes and possible sanctions. once again we have colleagues here in the senate who have simply decreed here on the floor that u.s. monetary policy is aimed at purely domestic objectives and is only -- and that it is only other countries that manipulate their currencies to gain trade advantage. but anyone who has paid attention to these issues knows that not all of our trading partners share that assessment. other countries have already accused the u.s. of currency manipulation, and the portman h-stabenow amendment would set forth a clear and accessible process for turning those accusations into trade disputes subject to possible sanctions.

weigh maywe may not agree with those allegations against u.s. trade policy -- i certainly don't -- but the problem is that the portman-stabenow amendment would give those determinations to international trade tribunals. so whether we agree or not we're going to find ourselves in a mess, no matter what happens should that amendment be accepted. at this point the proponents will point out that they've approved language -- from the enforceable rules mandated by the amendment. with all due respect to the authors of the amendment that's a red herring. keep in mind that the u.s. dollar is a global currency. the primary reserve currency in the world today. that being