radically different than the obama foreign policy? >> well, i try to look for areas where i could be supportive. of president trump and his foreign policy. whatever it turns out to be. for example, i agreed with are we came out on afghanistan. and i know it was a teleprompter speech and all that. but i thought he said the right things. and we need to stay there. as undesirable as many may view that. so i felt that was the right call. i supported president trump's acceptance of the invitation to have a summit with kim jong un. i don't know where that's going to go. there are all kinds of potential pitfalls here. but why not try something different? >> watch afterwords sunday night at 9:00 p.m. eastern on c-span2's book tv.

>> on capitol hill today, health care industry analysts and health care providers talked about the challenges facing rural hospitals. and offered their recommendations. some of the areas discussed were incentives for doctors to serve in rural communities. the role of telemedicine services and changing medicare reimbursement payment rates to hospitals and physicians. the senate finance committee is chaired by senator or inhatch of utah. -- orrin hatch of utah. mr. hatch: the hearing will come to order. i would like to welcome everyone to today's hearing. the topic today is rural health care, which is a critical issue for virtually every member of this committee.

and so many others. i've long considered it a special mission to create the same rural payment portunities that many of our nation's urban counterparts enjoy. representing a western state, i understand the challenges our rural hospitals and providers face to deliver high-quality medical care to families in environments with more limited resources. in the senate, rural health care policy boasts a long history of collaboration and cooperation on both sides of the aisle. take, for example, back in 2003 when we passed the medicare modernization act. the m.m.a. included a comprehensive health care package tailored specifically with rural communities, hospitals and providers in mind. the m.m.a. finally put rural providers on a level playing field with their neighbors and larger communities.

the law also put into place commonsense medicare payment provisions that help isolated and underserved areas of the country provide access to medical care as close to home as possible. however, while the vast majority of rural health payment policies enacted in the m.m.a. were permanent, some were only temporary. in the years following these temporary provisions have become known as the medicare extenders. as many of us know, the problem with extenders is that annual debate over necessary funding often takes priority over developing a morrow bust streeng plan. for the future -- strategic plan for the future -- more robust, strategic plan for the future. many rural and frontier health care providers still face significant obstacles, attempting to successfully participate in medicare system

reforms and bundle payment arrangements. while these changes continue to emphasize new ways to pay providers, medicare's existing strategies to preserve access to health care in rural areas still rely on special reimbursement programs that either supplement in-patient hospital payment rates or provide cost-based hospital payments. now these special payment structures may work just fine in certain parts of the country. but even with the wide range of special medicare rural payment programs, some smaller communities are home to hospitals that still find it hard to achieve financial stability. the reasons, as we will learn from the expert witnesses on complex. today, are and multifaceted. for example, when compared to

their urban counterparts, on average the four million medicare beneficiaries living in rural areas, rural and frontier areas, are less affluent, suffer from more chronic conditions, and face higher mortality rates. to make matters worse, small, rural hospitals continue to be more heavily developed or dependent on medicare in-patient payments as part of their total revenues. at the same time we are seeing a steady nationwide shift away from in-patient care, to roviders offering more outpatient services. it seems to me. many rural hospitals serve as a central hub of community service and development, but some struggle to keep their facilities operating in the

black in order to meet local demands for a full range of in-patient, out-patient and rehabilitation services. resolving these issues is no easy task. clearly for some communities, medicare special rural payment structures may stifle innovations that could pave the way for more sustainable rural health care delivery systems. one consistent theme that whether he hear from our witnesses today is the need for flexibility. they're not asking congress for a one-size-fits-all federal policy. they want the flexibility to design innovative ideas that are tailored to meet the specific needs of the communities they serve. they need the federal government to support data-driven states and local innovations that have the romise to achieve results,

increasing access to basic medical care. lowering costs and improving patient outcomes. but the federal government cannot tackle this challenge alone. while i was pleased to see c.m.s. release its rural health strategy area this month, i believe that this administration, led by h.h.s. secretary azhar, still needs to improve coordination across the agencies within the department to help prioritize new rural payment models, while also reducing regulatory burdens on rural and frontier providers. state and local officials must be aggressive in their efforts to design transformative policies and programs that meet their unique rural health care needs. and the federal government really needs to listen. we should listen to what these

folks have to say. and how we can -- what some of the solutions really are. in my view, states should be the breeding ground to test new ideas. however, it is not sustainable for every small town to have a full service hospital, with every type of specialty provider at its disposal. that is why it is so important for rural communities to work together, share resources, and develop networks. the federal government must continue to recognize the important differences between urban and rural health care service delivery, and respond with targeted fiscal responsible solutions. by pulling our knowledge -- pooling our knowledge, expertise and financial resources, we can work together to develop targeted payment policies that ensure appropriate access, while also protecting medicare beneficiaries. and american taxpayers. i'm looking forward to hearing some of those innovative ideas

from our witnesses here today. but before i turn to ranking member, senator wyden, i want to bring one important item to the attention of the committee. the medicare payment advisory commission, otherwise known as has c, has submitted provided a statement for the record. i encourage all members to review medpac's statement and ask that it be made part of the official hearing record. with that, let me now turn to my partner on this committee, senator wyden, for his opening statement. mr. wyden: thank you very much, mr. chairman. and first i want to say right out of the gate that i think it is very doable to produce a bipartisan product here.

we did that with respect to chronic care, we did that with respect to 10 years for chip. we did it, by the way, in the rural area, related to medical extenders, where we were talking about literally life and death matters like ambulances. so i want to make sure that we understand on this side we think it is very doable to come up with a bipartisan product. each year i hold open town hall meetings in every rural oregon county and there i meet with many leaders from the health care field. and they tell me there are a few potential health care calamities that have them afraid for what is coming down the pipe. first, many in rural communities feel that there is a wrecking ball headed their way because the trump administration and half of congress have spent the last 15 months trying to pull out all the stops to make enormous cuts

to medicaid. the president's budget, which , course is a public document indicates that another assault could be coming. the fact is that medicare is -- medicaid is a life line for rural hospitals and patients. and those who have been on the front lines will tell you, those who have been out there for decades, that if you want to turn rural america into a sacrifice zone, or -- where hospitals shut down and people can't get the health care they need, the fastest way to do it is by slashing medicaid. second, people in rural areas today feel that their local hospitals are already teetering on the brink of closing their doors. and if the local hospital goes under, that means no more emergency democratics available in a crisis. now, -- departments available in a crisis. now this isn't a far-off

problem. decades ago, when getting routine health care more often meant spending multiple nights in a hospital in-patient bed, rural hospitals were much more secure. they could afford then to maintain the emergency department. but that service may be on the ropes now because rural hospitals are under such huge financial pressures. offering a variety of in-patient services and keeping that emergency room open is extraordinarily expensive. and at the same time more and more americans are turning to outpatient settings for chronic care, rehab and routine surgeries. since 2010, 83 rural hospitals and closed their doors hundreds more are in dire straits. in fact, excuse me, rural services have been closed since 2010. 83 rural hospitals. bottom line, when you live in a big city like portland, chicago

or los angeles, you take it for granted there's always going to be an emergency department nearby. but rural americans who fear their hospital will be the next to close, are left wondering, what's going to happen if their son or daughter breaks a leg in a high school basketball game? i heard exactly that kind of concern just a couple of weeks ago in rural oregon. where would the family go if an older one -- older love one suffered a stroke? would they get to the hospital in time if dad suffers a heart attack? keeping these hospital emergency departments open is a key challenge when it comes to rural health care. in my view it's step one, when you're working to prevent rural america from turning into that sacrifice zone, where people can't get the care they need. and i'll just close by this point. i've already indicated i think we can produce a bipartisan

product here. a country as wealthy as ours, looks like we spent about $3.5 trillion last year on health care. for that amount of money, you could practically send every family of four in america a check for $40,000 and say, here, get health care. it ought to be possible to guarantee that rural americans are not on the outside looking in. thank you, mr. chairman. looking forward to working with our colleagues and getting a bipartisan product. mr. hatch: thank you, senator. let me just set the record straight, the decline in rural hospitals started long before medicaid expansion. prior to the trump administration, of course, rather than touting medicaid expansion or blaming trump, i hope we can set politics aside and evaluate whether or not

medicaid and medicare are yielding an appropriate federal response to states and communities. that is, after all, the purpose of this bipartisan hearing. we cannot just spend more money on medicaid and expect to solve every problem. so i look forward to continued discussion with our expert witnesses about what more can be done to ensure federal dollars are being spent judiciously and wisely. to help our rural hospitals and providers. so we need to do that. now i would like to extend a warm welcome to each of our five witnesses today. want to thank you all for coming. today we will briefly introduce each of you in the order you are set to testify. first we will hear from dr. george h. pink. the humana distinguished professor and the department of health, policy and management at the gillings school of global public health, deputy director of north carolina rural health research program, and the senior research fellow

at the cecil g. ships center for health services. health services research. university of north carolina-chapel hill. prior to receiving his p. -- ph.d. in corporate finance, dr. pink spent 10 years in health services management. planning and consolidating. dr. pink hold as bachelor's degree in marketing from the university of calgary, a master's degree in health administration from the university of alberta, and a ph.d. in corporate finance from the university of toronto. our second witness, dr. mueller, will be introduced by my good friend and fellow committee member, senator grassley. senator grassley, if you'd like to, you can proceed right now. with your introduction. mr. grassley: before i do that, since rural hospitals have been brought up, i'd like to point out to my colleagues, particularly senator wyden,

because he brought it up, i have a bill in, it goes by the accurate name reach, that i think about half of the senate's co-sponsoring. in fact, you may even be a co-sponsor of it. i hope people look at that because that is an alternative to the possible closing of some rural hospitals. it's my privilege to welcome another iowan, dr. keith mueller. dr. mueller is a renowned researcher who is an expert about rural health care. he is the interim dean of the college of public health and a professor of health management and policy at the university of iowa. he directs the acronym for the center for rural health policy analysis at the university of iowa. he has published more than 220 scholarly articles and has received national recognition for his rural health care

research. elcome, dr. mueller. mr. hatch: thank you, senator. mr. grassley: yeah. mr. hatch: next to speak will be ms. connie martin. she'll be introduced by our friend and colleague, senator bennett. senator bennett. mr. bennet: thank you, mr. chairman. and thank you so much for holding this hearing. rural communities have long been struggling with the scarcity of health care providers and facilities. this is exacerbated the challenge of responding to the opioid epidemic which has hit rural americans particularly hard. i'm pleased to introduce my fellow coloradan, connie martin, the chief executive officer of san luis valley health, an independent nonprofit health system in colorado. ms. martin has been working to serve the health care needs of rural coloradans in the valley for more than 30 years. prior to being named c.e.o. in 2013, ms. martin served the

chief operating officer. she completed advanced leadership training at the regional institute for health and environmental leadership at the university of colorado. also the health care executive program at the ucla anderson school of business. ms. martin also plays a pivotal role in the local community. she's the adam state university presidential search committee's community liaison and a member of the county economic development corporation. i look forward to hearing ms. martin's testimony. thank you, mr. chairman. mr. hatch: thank you, senator bennett. now our fourth witness to speak k. etball ms. susan compson, who is frals iowa and will be introduced by senator grassley. mr. grassley: it's my privilege to introduce you to the committee. she is senior vice president of integration and optimization for unity point. sue is also the c.e.o. of unity point accountable care, a nurse

by training. and she's the first iowan to be named to the medicare payment advisory commission. as you said, mr. chairman, no one has medpac for short -- known as medpac for short. sue's professional achievement and expertise will speak for themselves. however, i'd like it say that part of her legacy is sitting behind her today. so i'm going to talk about her family that's involved in rural health care as well. nate thompson is sue's son. nate is a c.e.o. of story county medical center, a critical access hospital. ashley thompson is sue's daughter-in-law and nate's wife. ashley is a government relations specialist for unity point. dr. kaitlin thompson is sue's daughter. dr. thompson is a psychiatrist working with the barry hill center for mental health. a community mental health center in fort dodge, iowa.

and chad is sue's son-in-law and dr. thompson's husband. chad is a director of physician billing, operations for unity point clinic. so, sue, it seems to me like your family is as much involved with rural health care as you are. welcome to the committee. mr. hatch: thank you, senator. for providing that kind introduction. our final witness will be dr. karen m. murphy who will be introduced by our good friend and colleague, senator kasey. mr. casey: thank you, mr. chairman. privileged to introduce dr. murphy. dr. murphy is chief innovation officer at geisinger health system. i know her from our hometown. and she has a long record of service in health care. she served our state as pennsylvania's secretary of health. she was president and c.e.o. of the moses taylor health care system, which is just blocks from my home.

her education is substantial. doctor of philosophy and business administration from temples fox school of bills. and m.b.a. from marywood university. my mother and my daughter and my sisters will want me to mention marywood. a bachelor of arts from the university of scranton. and a nursing diploma. so whether it's nursing itself, which was her calling, as well as a real commitment to the reform and the health care delivery system, in so many ways karen has brought a passion and a degree of excellence to these issues that i think is unmatched. o, karen, dr. murphy, welcome. mr. hatch: thank you for rounding off our introductions. i'd also like to thank the witnesses for being here today. in particular, thank them in their testimony in advance for

their patience and their flexibility. as members will be moving in and out of today's hearings because we have other markups going on right now. i have two or three markups going on right now. personally i must attend the judiciary markup and with that out of the way, dr. pink, we'll begin with your opening remarks, ok? dr. pink. mr. pink: chairman hatch, running backing -- ranking member wyden, and members of the committee. thank you very much for the opportunity to testify today on behalf of my colleagues at the north carolina rural health research program and the gillings school of global public health. at the university of north carolina chapel hill. we research problems in health care, rural health care delivery, and are funded primarily by the federal office of rural health policy. i am here to discuss what we know about rural hospital closures and i will start with an all too common story. a regional medical center in

california is a 24-bed acute care hospital with 200 employees. on may 1, it announced that after 1 months of losses totaling -- 18 months of losses, it is insolvent and will close all services in june. the closure will leave residents in the rural fresno county city of 17,000 people without an emergency room. the nearest hospital is in hanford which is over 40 miles away. it will be the second hospital in the san joaquin valley to close in the past six months. a regional medical center, 112-bed hospital, closed six months ago. across the country, 125 rural hospitals have closed since 2005. 83 since 2010. why is this happening? many reasons, but long-term unprofitability is an important factor. years of losing money results

in little cash, debt payments that can't be made, charity care and bad debt that can't be covered, older facilities and outdated technology. why do they lose money? small rural hospitals serve patients who are older, sicker, poorer and more likely to be un- or underinsured. they staff emergency rooms, often in communities with small populations and low patient volumes. combine this with reimbursement reductions, professional shortages and many other challenges, and you can see why i prefer being a professer to a rural hospital executive. what happens after a closure? some convert to another type of health care facility. but more than one half no longer provide any health care services. they are parking lots, empty buildings and apartments. patients travel an average of 12 1/2 miles more to the next closest hospital, but many travel 25 miles or more. for the old, poor and disabled,

who cannot afford or do not have access to such transportation, these distances can be very real barriers to obtaining needed care. who is most affected? we have investigated communities served by rural hospitals at high-risk of financial distress. because they may be the next facilities to close. these communities have significantly higher percentages of people who are black, unemployed, lacking a high school education, and who report being obese and having fair to poor health. in other words, vulnerable people. if the hospitals that serve these communities reduce services or ultimately close, already vulnerable people will be at increased risk. what can be done? we can try to improve what we have by exploring ways to better target medicare payments at rural hospitals in greatest need and where closure would have the greatest adverse consequences on the

communities. preferably we should develop something new. at meetings around the country, the most common frustration i hear is the lack of a model to replace a distressed or a closed hospital. we have acute care, in-patient hospitals with emergency rooms on one end and we have primary care clinics on the other end. we need something in between. there's no shortage of innovative ideas. eight to 10 new rural models have been proposed by various organizations. the profound challenges facing providers that serve rural communities are not going away. we need to step up the pace of innovation, faster evaluation implementation of new models, and development of a medicare policy and regulation that will allow and sustain them. thank you again for the opportunity to discuss these issues with you today. particularly because during the past 35 years, some of the most innovative and effective developments in rural health policies have emerged from the

senate finance committee. mr. hatch: thank you so much. we appreciate having you here. and we appreciate your expert teels. mr. mueller, we'll turn to you now -- expertise. mr. mueller, we'll turn to you now. mr. mueller: thank you for this opportunity to share my perspectives on key issues in rural health and related policy considerations. while some things have changed in the 30 years i've been conducting rural health research and policy analysis, the underlying do i a numberics .emain much the same -- we've had an interesting ride in policy debates and developments over that time. including weathering the aftermath of creating perspective hospital payments in the 1990's, considering health care reform in those years, major changes in medicare payment and benefits, changes through the patient protection and affordable care act, and now a renewed and

welcome discussion of what we should be doing to best serve the needs of rural residents. i've benefited from exchanges with this committee and others throughout. starting -- starting with a conversation senator roberts and i had when i testified as part of the health panel which i now chair, to the house committee on agriculture in 1993. we provided analysis of five reform proposals, including the health security act, by assessing their impacts on key rural considerations. senator robert mace remember and it looks like he does -- roberts may remember and it looks like he does, sharing the appreciation for the straightforward analysis we provided which helped give me the confidence bringing forward the best we can offer from policy analysis. of course then-representative roberts may not have liked the thumbs-up, thumbs-down table of our conclusions that my local newspaper provided, displayed during the hearing. the health panel launched in 1992 to bring worlddy -- rural dimensions front and center in policy discussion. we provided analysis during development and implementation of major national policies,

including the balanced budget act of 1997, the m.m.a. that senator hatch referred to in 2003, and, of course, the one in 2010. we provided feedback to this committee and others during policy formation and followed up with analysis of rural impacts of new policies, including calling attention to unintended consequences of the b.b.a. in 1997, before that term was as ubiquitous as it is now. i've come to appreciate the nexus of what we do in the research community, with the concerns and needs of our colleagues developing health care services. as president of the national world health -- rural health association in 1996, i represented the needs of rural providers in policy discussions. one of my funded projects in the early 1990's was working with providers in nebraska and iowa to develop a template for provider--sponsored medicare plus choice plan. much of my research now involves visits to rural health care organizations to understand the implications of

medicare in other -- and other policies on what they do. my engagement and that of the center, the health panel and the rural telehealth research center based in iowa, in collaborations with others, covers a host of specific topics of interest to this kevment including medicare advantage, rural a.c.o.'s, rural pharmacy, implications of changes in health care delivery and organizations, delivery system reform initiatives, and the evolution of the marketplace in health insurance coverage, and the role of telehealth. my written testimony includes specific research findings on some of those topics, along with policy considerations. i would like to share some important questions to consider for the future of the medicare a.c.o. program. are there benefits other than savings related to changes in delivery models that help achieve the triple aim of patient experience, better health, and lower costs? should there continue to be different tracks? should variations of advanced payment, perhaps as grants, continue to be available?

finally, what is the next generation of payment reform that builds from the experiences of a.c.o. she's in perhaps global budgeting -- a.c.o.'s? perhaps global budgeting that we'll hear about later. five considerations for policies designed to encourage delivery system reform. one, organize rural health systems to create integrated care. two, build rural system capacity to support integrated care. three, facilitate rural participation in value-based payments. four, align medicare payment and performance assessment policies with medicaid and commercial payers. and five, develop rural appropriate payment systems. in general policies should be sensitive to the rural practice environment, including population density, distance to providers, and the need for infrastructure investment. new models can build on the strengths of the rural system, notably primary care. thank you for this opportunity and i look forward to your questions. mr. hatch: thank you. we appreciate having your testimony here today.

ms. martin. ms. martin: thank you for the opportunity today to share our health care story. i am the c.e.o. of a small health care system located in the san luis valley, which is a rural, agriculture-based community in southern colorado. we serve six counties, an area rool roughly the size of massachusetts. and are the safety net for our nearly 50,000 residents. two of our counties are the poorest in colorado. nearly 70% of our patients are covered by medicare or medicaid. with less than 20% having commercial insurance. with this challenging payer mix, we are constant struggle to remain financially viable. health and the rural hospitals around the country are appreciative of this committee's commitment to rural communities and we're hopeful that meaningful help is on the way. our system is comprised of a 49-bed sole community hospital and a 17-bed critical access hospital. we operate five rural health

clinics, two of which are provider-based. this past year we provided 2,500 hospital visits, 58,000 outpatient services, and over 65,000 clinic visits. we are a level three trauma center and the only facility that delivers babies, provides surgery, or has any type of specialty care for 120 miles in any direction. we serve veterans, farm workers, college students, tourists, and our own friends and families. we are resilient and a creative team of health care providers. we are the largest employer in our region, with a staff of over 800. many of them have lived in the community their entire lives and their families for generations. as for me, i moved to the valley in 1985 and i began my health care career at an entry level i.t. position. back when the personal compute wars new technology -- computer was new technology. and have worked my way into the

current c.e.o. role. our staff struggles with the cost of meeting regulatory requirements, which are often different and sometimes conflicting across payers. our system must report on dozens of measures for the medicare quality and pay-for performance programs, however, our private insurers ask us to report yet more, sometimes on the same topic, but using a different definition. this complex and confusing data reporting takes time away from what really matters, which is delivering on our health care mission. recruiting and retaining a qualified work force is another challenge for rural providers. we've been fortunate to form partnerships with local and state schools that help develop and maintain our work force. specifically we have multiple grow-your-own programs from paramedic training to hosting medical students, internships and mentoring those who are pursuing a health care m.b.a. we collaborate with the local

community health center to host a rural residency training track program. we are set to have the first two physicians complete this training in june of 2019. we do have our work force success stories to celebrate as well. with two family medicine physicians in our system who returned to their childhood homes to care for friends and neighbors. and we have a physician who came during college to serve as a volunteer in a local shelter and today he's the surgeon in our organization. rural communities pride themselves on hard work and taking care of their own. however, federal payment systems and delivery models must recognize the unique circumstances of providing care in a rural community. and they must be updated to meet the reality and challenges of how health care is delivered today and into the future. about 10 years ago the critical access hospital that is part of our system now approached us for help. nearing closure and in dire

financial condition, we entered into a partnership to provide management services and financial support. in 2013, this critical access hospital fully merged into the system that is today san luis valley health. this type of arrangement prevented a hospital closure. but such partnerships are not available to many rural hospitals. we see the result with hospital closures across the country and today 12 rural hospitals in colorado are operating in the red. therefore i'm here today to ask for your support and consideration for new financial models that consider our needs. including the creation of a 24/7 rural emergency medical center designation, such as the american hospital association has recommended and senator grassley has championed. and i ask you to provide appropriate resources, flexibility and ongoing dialogue with those of us in rural america who stand ready to innovate, work hard and meet the current challenges of caring for our friends and pain ins -- neighbors. in a country as great as ours,

where you should live, where you live should not determine if you live. thank you for your remarks. mr. hatch: thank you so much. we'll turn to you now. ms. thompson: thank you and good morning. thank you for this great opportunity to address the committee on several of the challenges facing health care in rural america. and offer up some ideas for potential solutions. now, i would be remiss if i did not take this opportunity to publicly thank our senator from iowa, senator grassley has made access to quality health care in rural regions of our country a relentless priority. thank you, senator, for everything you do for iowa and for our country. before assuming my job at the corporate office of unity point health, i was the c.e.o. of a small health system affiliated auto -- affiliated with unity point. trinity regional medical center is a 49-bed hospital, including a group of physician clinics and home care services that over the years have held the designations of a 200-bed

p.t.s. hospital, a sole community hospital, a rural health clinic, and most recently, a betweener. as it participates in the rural demonstration program. trinity has formal management agreements with five critical access hospitals and close referral relationships with sister unity point metropolitan markets, including des moines. but possibly the most unique experience trinity has participated in to date has been as a medicare accountable are organization, ana -- maco. pioneered, it took responsible for improving the quality and lowering the total cost of care for approximately 10,000 medicare beneficiaries attributed to them in this rural northwest iowa community. they did this successfully and continued to do so as a next generation a.c.o. it is through this work that challenges facing rural health communities, hospitals and providers have become so

palpabley clear to us. the first challenge to highlight is the dichotomy and incentives that exist between those who operate under total cost of care programs like a.c.o.'s, medicare advantage plans and bundle payment programs, and their rural counterparts who operate under fee for service, cost-based reimbursement methods. while the former looks to keep methods -- i'm sorry, while the former looks to keep members healthy and out of the hospital, the latter is rewarded when hospital bets are -- beds are full of medicare patients. if the two groups worked in isolation of each other, this might work. but they do not. they are intrinsically woven together. the beneficiaries attributed to the trinity pioneer a.c.o. move in and out of the rural facilities in the region. when regarding payment models, the rural groups would ask, where do we fit in? and to date the answer to that question has been, you don't.

the policy approach has been to exempt them from value-based policy altogether. we submit this approach is not working and needs to change. rural health care can fit into value-based payment models. so models. so you wonder, is unity point health advocating that cost-based reimbursement be deconstructed? and to that we answer, no. we are requesting it be renovated. this brings me to the second challenge i must highlight and this challenge is the greatest. access to health care services in rural areas. bringing quality care to rural america comes at a cost and the cost is distinct from the actual provision they have medical service. these additional unique costs relate to the time and the distance from major service centers, lack of comp rehence i community services, and health care work force dead zones. we pr pose the renovation of

health care delivery in rural areas include a value-based component tied to quality medical outcomes and expenditures and that a second -- a separate and distinct payment structure is developed that bies for the cost associated with access in rural areas. while our written testimony go into greater detail how such a system could be structured, i offer some playful do's and just one don't as we design this type of system. the d's. do encourage the c.m.s. innovation center to develop pilots that test medicare advantage projects that are designed for rural areas like iowa. we see great advantage for bringing health methods to rural areas. do design a.c.o. benchmarks to accommodate for the additional cost for bringing act stose rural markets. a donald support bill thrinings

reach act that allow rural hospitals to transition to new designations designed to meet modern needs. and do continue to allow telehealth practice to extend the reach of our in-person providers. with the utmost respect, just one don't. don't embrace a policy that allows free standing ambulatory surgery centers to establish residence in rural markets and cherry pick patients by procedure, further straining the viability of community hospitals. i challenge you to find one or -- one for-profit free standing a.f.c. that has an emergency room. in closing, health care entities are the back bone of many of our rural communities. we need our rural health care health care systems to be viable, we need them to make the transition to rural health care access centers we know they can become. thank you nor opportunity to share these views.

>> thank you. ms. murphy. >> chairman hatch, members of the committee, thank you for inviting me to testify about rural hospitals. noigs my clinical background which you've heard, i spent two years as cmmi before assuming my role as secretary of health working on the state and nation models initiative. today i'd like to share the development of an innovative payment and delivery model that was developed when i served as secretary of health in pennsylvania. i began my tenure as secretary of health assessing the status of the health care delivery systems in pennsylvania. i was struck by the financial instability of the rural hospital. i found -- in research i found that the situation in pennsylvania was being replicate aid cross the country. pennsylvania has the third largest rural population in the united states. 67 of our 169 hospitals in pennsylvania are in rural communities. more than 58% of those hospitals

in rural areas have mounting financial pressure resulting in break even or negative operating margins. we began to look far solution. after having worked on the maryland payer model and seeing the impressive results we decided to design a similar model for rural hospitals in pennsylvania. we worked collaboratively with cmmi on designing the model. i would also like to acknowledge senator casey and his office's support as we designed this model. the design period was launched in january of 2017. the objective of the -- the objective of the model are to provide a path to improving health and health care delivery in rural communities. the model changes the way participating hospitals will be reimbursed. the model replaces the current fee for service system with a multipayer global budget tpwhinesd hospital's historic net revenue. like maryland, the payment mod nell pennsylvania is designed to

include all payers. however, it was necessary to develop a new methodology since maryland has the authority to establish hospital rates and pennsylvania does not. the model moves rural hospitals from focusing on the in-patient centered health care services to a greater focus on outpatient centric health care services with an emphasis on population health and care management. it replaces the current fee for service system with little emphasis on quality and safety to a payment model that includes direct incentive to improve quality and safety and eliminate subskill service lines. rural hospitals are encouraged to move from traditional peer models, delivered directly on sight, to innovative care models that are enabled by models such as telehealth, video conferences and remote monitoring. the vision is that rural hospitals will invest in care coordination such as reaching out to patients who frequently use the emergency room services and connecting them with the provider. it also includes population

health and preventive care services such as chronic disease prevention programs and behavioral health initiatives, including those targeting substance abuse dised or we are the expansion of medical homes to include medication assisted treatment programs. participating hospitals will have the ability to invest in social services that address community issues that lead to detrimental health outcomes. based on the global budget, hospitals are expected to develop a transformation plan to outline an approach to health and health care delivery for the communities they serve. they're encouraged to work with community agencies such as united way area agencies on age, drug and alcohol treatment centers, to develop services based on their community needs. to provide participating hospitals with transformation support, pennsylvania plans to create a rural health redesign center. c.m.s. has entered cooperative agreement with pennsylvania to provide up to $25 million over

five years to support the rural health redesign center this will rovide a way to devoid capabilities to support of all existing hospitals. plus pennsylvania is planning to engage six hospitals in the initial year and gradually expand to 30 rural hospitals. our hospital is a participant in the initial phase. our c.e.o. has been a sfauverage supporter since the beginning as it focuses on improving health and improving value for each community served. we look forward to work with the state on this important initiative. financial challenges of rural hospitals today are the result of a changing health care industry. they may not be able to offer the same services that they did in the past but it is possible that they can be leveraged to improve the health of those residing in rural communities. next week i'll be speaking of the global budgeting summit at

johns hopkins university. 26 states have registered to participate. the federal government has the opportunity to engage eadditional states in the pennsylvania rural house model. implementing across diverse states would give us the opportunity to evolve this innovative payment and delivery model. thank you for your interest in aiding rural hospitals. i too believe rural communities deserve access to health care and must continue to work to identify innovative approaches that are a pathway to that goal. >> thank you so much. your testimony has been interesting. ms. martin, you referenced times when your hospital has been on the verge of financial crisis in the past. how did you leverage reseriouses delivery line service so that operation lines to stay financially viable? and can you talk about what you think an appropriate medicare margin should be for small,

nonprofit rural hospitals like yours? >> thank you, senator. i think any margin would be helpful to so many rural homents. i think for my system, located in the rural part of colorado, if we can be in a margin area of 3% to 5% we consider that a very successful year. and so i think different areas have different needs. so much depends on your infrastructure and what you need to replace as far as equipment and facilities go. so i think for our system and my perspective that's the margins that we're trying to achieve. so many times we are under 1% or sometimes in the negative. i think what we did initially over the last few years is put our two systems of care together. the critical access hospital and our sole community hospital and we -- we used the economies of scale, you know.

we have one c.e.o. for that rural system of care. we have one finance department. we share a lot of services between our two organizations and that makes it cost effective to run the different departments , you know, we have a person who is an expert in laboratory or a person who is an expert in imaging and they help a larger organization when you can divide them across a couple of communities. the other thing we do is we're very frugal. i think in rural america we're thoughtful about what we buy. we don't provide services that our community doesn't need because we don't have that luxury. we have to match our services to the needs of our community. we have built our primary care base over the past few years and that has made a substantial difference with keeping our care close to home. and we've added specialty services that are -- the highest need for our patients and our

community, for instance, we've added oncology services in the past three years. we started out with a model where we brought a specialist a day or two a month and built that to where we could have a full-time provider. i think part of our challenge is, is one single specialist in a rural community, you know, you have to have the connections to have coverage and support for that individual. so those have been some of our strategies. we're not a lucrative health system at all. senator hatch: thank you. let me go to you, dr. murphy. there's a lot of excitement around the pennsylvania rural health model. it clearly holds great promise. i am personally pleased to see c.m.s. working with the state tots design innovative rural health care payment strategies. is there any concern under pennsylvania's new multipayer global budget payment method that rural hospitals might lose incentives to be efficient and n

providing health care services and secondly, how do you think your state's rural hospitals will figure out ways to lower costs and improve health outcomes if they already know what they're going to get paid for procedure under the global budget? >> thank you, senator. i think the challenge is, which is why i recommend that cmmi look to expand the test, it is a test to determine if we can successfully transform rural hospitals in a way that makes -- that is efficient and improves population health as well as health care delivery services. there is a monitoring component within the global budget methodology. that we'll check. the model is being evaluated from day one. that will determine the appropriateness of the services and the inability for unintended consequences to occur. that is built in within the test of the model.

but i think the goal here, the difference is, there's a transformation plan that fwose along with the global budget with monitoring metrics throughout the life of the global budget. so the hospital is going to be very tightly monitored as we go through. implementing the global budget. i can assure you that certainly medicare would be concerned about that as would be all the other commercial payers. so i believe the model is robust in the way it will measure for those unintended consequences. mr. hatch: thank you. let me turn to senator wyden. senator wyden: thank you, mr. chairman. i think it's been a terrific panel. ext week, when i have opened town meetings in pineville, paisley and joseph, oregon, i'm going to remember what you said,

ms. martin that where you live should not determine if you live. i can tell you, i look around the room and practically the whole place got whiplash when you said that because that really sort of sums up the challenge. colleagues, let me give you my sense of where we are in terms of the bipartisan possibilities going forward. we had the bipartisan budget act. we have five years of additional funding for several important programs for rural communities. extending the medicare hospital program. increasing payment for low volume hospitals. and as i touched on earlier the ambulance add-ons. that at least gives us some measure of predictability for the next five years. but it seems to me we've really got some heavy lifting to do in the next five years. i think we understand this calamity did not arrive on us in

15 minutes. we're not going to solve it in 15 minutes. so what i would like to do for purposes of kind of going forward in a bipartisan way here as we move under the efforts of colleagues on beth sides is i'd like to just go down the row and have each of you give me what would be your top priority for medicare as related to longer term stability for rural providers and particularly for rural seniors. in our country. because we know that there's a disproportionate number of seniors in rural communities. right down the row, top priority for medicare for the kind of long-term stability that we have a chance to work on because we got at least a little predictability for the next five years. just go down the row.

>> thank you, senator. we had talked to people in communities where rural hospitals have closed and almost always the first thing we hear is the disappearance of the emergency department. the emergency room. so i would say my top priority is maintaining access to emergency care. senator wyden: good. mr. mueller. mr. mueller: mine would be building the integrated system i talked about, with post-acute care after hospitalization and care for the elderly with chronic conditions which is in part addressed by the chronic care act. we need to move forward with innovations coming out of that. senator wyden: good. merchandise martin? ms. martin: the flexibility to develop a model in each community that meet their needs so they can keep emergency care. senator wyden: what would be your top priority for

flexibility? ms. martin: to allow critical access hospitals to develop, merge into a different mod chele would limit their need to have in-patient beds and be able to be emergency departments and do outpatient care and keep the financials healthy in that model. senator wyden: good. >> the top priority would be acquiring and retaining providers. senator wyden: if you could wave a wand what would you pursue? ms. thompson: rural health care and rural communities wee cree ate an environment that's unique in the country. the community cares for each other and i think the opportunities that are before us that have been demonstrated in some of our a.c.l. models create not only an integration of hospitals and physicians but in all components of health care across the continuum this kind of environment is motivating, it is in spiring, and i think quite frankly could create a platform

for transforming health care for the country. senator wyden: i'd like, to let's keep the record open for you all to give us as many concrete ideas for getting more providers to rural america. this is enormously important and we tried loans and this and that. look we all understand that year after year we're faced with this question of whether there will be anybody to keep the lights on. in other words, you've got buildings and light but you have to have people who can run them. ms. murphy, your one priority for medicare as we kind of use this period where we've got five years to kind of really push hard for longer term? ms. murphy: expand the test for tpwhrobal budgets to different states. enator wyden: thank you. chairman, only seven seconds

over. senator hatch: senator roberts. senator roberts: thank you, mr. chairman. i'm very grateful we're holding this hearing on rural health care in america. it's long overdue that congress tries to foe tchoins unique needs as espoused by all the witnesses. people noo rural areas. the health care challenges faced by these constituents. i have the privilege of serving as the co-chair of the senate rural health care caucus along with the ever-enthusiastic and helpful co-chairman senator hyde camp of north dakota. we have similar problems or challenges. with we don't have problems, we have challenges. we've long said rural residents deserve the same quality of health care as their urban counterparts. there's no reason why rural communities should be left behind as other areas continue to advance their health care systems. dr. mueller, thank you so much for reminding everybody that i was here in 1993. as you were.

and it indicates that this has been a long-term battle. i can remember clear back when t was not h2s, it was h.e.w. secretary joe ca -- calafono and all of a sudden there was a rag that came out that said before any rural hospital could receive a medicare reimbursement, three doctors had to review all of the patient -- all the patients who came in and the procedures and the team of three doctors had to do this every 24 hours. that was ludicrous. i don't know who came up with that. but then i decided it would be a good thing to be for that because maybe one of the doctors would stay if in fact they were inspecting the hospital. but it's been a long-term effort. i want to focus, by the way, we have 86 critical access hospitals in kansas and i hope that when we renovate, i think

ms. thompson said we should renovate, we should not eliminate, we're on first base or second base trying to hold on. i don't want to get picked off by all of a sudden say nothing to the critical access or moving to some other thing without really knowing where we're going. i want to really concentrate on the work force situation and i'd like you all to comment on that. improving training and retaining staff is one of the biggest challenges we have. the example in some areas, our physician assistants, our nurse pracktillingsers may be the only pry air -- primary care provider available twosme drive quite a few miles to get to that hospital like you have in alamosa, ms. martin, in wyoming they have to travel a couple hundred miles maybe to do that. let's go down the panel and say the one thing i'm really interested is, the federal regs

that come in between the provider and the patient. i'm talking about the 96-hour rule, the face-to-face regulations, things that don't -- it take asterable amount of time and expense and if you could focus on that, what suggestion could you make and we'll start with dr. payne. dr. payne: i defer that question to my colleagues who have much more expertise on that than i do if that would be. >> that would be fine. dr. mueller. dr. mueller: one is looking at what's required for supervision, the thing you alluded to from the calafano years exists today. and second what we can do to open up telehealth services to support the local rural health care professionals and we've got some of that as i mentioned earlier in the chronic care act to work with. >> you mentioned telemedicine,

i'm not trying to interrupt, but there were three unique places where telemedicine was to start out. this is back in the 1980's. one was in new mexico with an indian reservation, another in highland in maine, and the third was in kansas between garden city and dodge. and they were selected. and we were about to announce that. then all of a sudden they called up and said don't announce that, we found a doctor. for all that hard work i was very upset they had found a doctor. and sure enough the doctor came. they were not like your doctors, the two that came back. six months that doctor was gone. and in the meantime we lost the opportunity for the telemedicine. now we have it back -- it's very typical. you've got two doctors that came back because they believed in their community and they wanted to live in the community where they could raise their family and all the good things that's

been referred to. by ms. thompson. but on the federal reg side hich one would you pick? ms. martin: i think i would pick aligning quality measures so they are measures that are relevant to who we are and what we provide. right now we report so many measures to so many different agencies and they're not meaningful always in moving us ahead with our quality. for instance, some of the things we report on, the volume we do is so small that one single fallout appears to make us look like we have a lesser quality than maybe our urban counterparts and that's simply not true. so i think that is a very important point. and then the point with meaningful use. the evolution of meaningful use has certainly improved use of technology in the health care industry but the pace the change is happening and the expense it takes rural facilities to keep

up, i worry about those kind of measures really getting between he doctors and their patients. >> ms. thompson. ms. thompson: consistent with my turns around access for providers i would strongly recommend continuing to expand the use of telemedicine. >> dr. murphy. dr. murphy: i think two i would give, relaxation of medicare regulations in terms of allowing rural hospitals to maybe execute more innovative strategies in recruiting physicians, so we have some rural support of that and i secondly think the relaxation or acceleration of the ability of the medicare program to waive certain requirements for rural hospitals and other rural management. >> i thank you all for our your testimony. senator enzi.

senator enzi: thank you. i appreciate that this hearing is being held and i appreciate the great talent we've put together to do it. 'll yield. >> senator cantwell, you can go next. the senator said he'd yield. >> mr. chairman. f i could, i think in order of who is here it would be senator enzi next, then senator cassidy and then senator cantwell of the senators who are here. senator hatch: appreciate that. senator enzi, why don't you proceed. senator enzi: thank you. i come from the least populated state in the nation oumple biggest city is 60,000. and all of our towns are at least 40 miles apart. we only have 19 towns where the population exceeds the

elevation. i have one county that is the size of delaware and the city, and you get to be a first class city when you hit 2,500 people and they just did is 2,500 for the whole county. so we just tried to keep a hospital open there which usually means having a physician's assistant. so this -- this is a critical hearing for us. and i'll begin my question with ms. thompson. the way medicare pays rural hospitals, including critical access in sole community, like we have in wyoming, it's closely related to inpatient services. medical providers started to shift toward prviding more and more services on an outpatient basis is the inpatient metric the most appropriate measure for hospital costs? >> that's a great point. i'm not certain that it is. you know, when we began our work

in the pioneer a.c.o., the entire question around utilization of in-patient services was very much at hand because that's very much what drives the predominance of spend and what calculated the pmdm and in the contract with the federal government in the a.c.o., we essentially made a promise that we were going to reduce that total cost of care while improving quality of medicare beneficiaries. as a result of a lot of focused work and investment in reducing spend, we reduced in patient utilization and a lot of services moved to outpatient. and what i think is more important in terms of the takeaway for this hearing is not that we reduce the spend or that we improve the quality. both quite important and both predominant components of the agreement in terms of the a.c.o. what we learned and what i

believe is so important as we rethink policy around rural health care is how -- how strong and how absolutely woven together a rural community is in commitment to caring for its patients and in that lies some secret sauce in term of how we read things, not just payment for hospitals or how we think about inpatient or payment for physicians or payment for health care which is typically how we think about holcy development, but rather how do we look at an organized system of care of the defined community whether it's a rural hospital, the six counties they're serving, and create an accountability and motivate a community to want to come together whether in a global payment model or in some model that gets us out of this sigh hed way of thinking about how we organize payment structure in

rural america and in that way of thinking, i believe we will transform not only how we pay for care but how care is delivered and how we recreate entirely new health care system that to me was the most thing. >> i'm running out of time. >> i'm sorry. >> thank you very much. for dr. murphy, medicare used to allow states to decide whether to designate hospitals as critical access. i understand we prohibited state-based designations because of concerns they were overutilize bud allowed hospitals that had already earned the state-based designation to keep it. in cases where the critical access designation may have been overutilized, how do hospitals compare to the c.m.s. definition of a critical access hospital? >> i think the definition of itical access on centers and their impact on whether a

hospital is or isn't is probably updated to even think about it. the hospital -- the problem suffered by rural hospitals today is because the health care industry has changed. and critical access hospitals receiving, whether they're designated or not they still have the same -- all rural hospitals have the same problem. they have little resources to deliver any type of substantial inpatient care. they're devoting all the their resources to inpatient care for a small number of patients. so whether the critical access hospital designation was definitely a plus for hospitals, two decades ago, but i think what we're faced with today is any type of assistance to hospitals that exists in the fee for service environment whether it's, excuse me, regardless of whether it's tied is going to lead us to the same plates two

years from now if we don't look at another payment model. >> thank you. i have some more questions but if we have a second round i'll do those, otherwise i'll submit them. i appreciate all the expertise that we have here, my time has expired. senator hatch: senator cantwell. >> i believe in order of appearance, senator cassidy is next then senator cantwell and hopefully we can get both of these colleagues in in the next few minutes. senator hatch: what would i do without you? >> as the jewish people would say, oy. senator hatch: senator cassidy, i'm sorry. i never overlook you sir. >> as my daughter would say, o.m.g. thank you very much. senator cassidy: i'm a physician. i worked in a hospital for the uninsured and often interfaced with my colleagues who are in emergency room at some

understaffed critical access hospital but so understaffed they frankly had to send all their patients to the hospital where i worked. so a lot of what i'll say now will reflect that perspective. let me first go here. i'm interested in the medicare wage index and which hospitals with a higher cost structure get more. if you will, the more get more. now it seems as if under current law, you're bationed upon your geographic area, rural hospitals in my state cannot compete with the urban hospital because medicare policy which tells the urban hospital, we're going to give you more. and so obviously if you're a nurse and have to decide where to work, you can go where you would earn more. the cost of wages, current policy does not have a floor or ceiling in place for an adjustment in which the cost of wages is considerably reimbursing providers so as i

said, urban hospitals get more, rural less. i could ask many of you this question but dr. pink, does a lack of a ceiling or floor for the medicare wage index frankly give a perverse incentive for the urban hospitals to keep increasing wages to make it harder for a rural hospital in louisiana or iowa or tennessee to compete and to be able to keep that nurse who lives close to home, home? dr. pink: we have done extensive research on the various rural designations congress has created. there are some of these designations where the wage index does play a key role. for example, one study we completed last year we found that many of these sole community hospitals in the country, it's an important payment designation but they are located in states which have lower wages and therefore the

hospitals eligible for that designation in fact, there's no advantage to taking it. they take the p.p.s. payment instead of sole community. so i believe it is an issue. we have not said it beyond community hospitals. senator cassidy: senator isaac has a bill which i co-sponsor to put a floor under the medicare wage index which we think would help rural hospitals substantially. second, and i'll stay with you dr. pink, over the last decade there's been a lot of consolidation in hospital systems just for folks to see or ba macare passed in about 2009, that's an inflection point, whether it's causal or just associated, we don't know. subsequent to 2009 we can see consolidation episodes has increased about

doubling clear-year to year. now we know that that increases cost. there's good data showing that prices at a monopoly hospital are 12% higher than those markets with four or more rivals. and i can give more evidence to that. dr. pink given that these mergers coincide with a rural hospital closure, i don't know the answer to this, i'm asking you, has consolidation by large hospital systems reduced competition or increased prices and resulted in rural hospital cle sures? dr. pink: we have not studied urban mergers and acquisitions, senator. i can say for many rural hospitals, and small communities, merging with larger health system has been the only option available to them. where they are literally faced with a choice of do we have nothing or do affiliate, or are we bought by a large system. >> ms. thompson raised the issue

of the a.p.o.'s not being extended to the rural area but presumably if an urban hospital bugget a rural hospital, they'd extend out to the rural is that not occurred? ms. thompson: that's not occurred. how come not? ms. thompson: the cost-based reimbursement model with critical access hospitals simply reduces any opportunity because they're reimbursed based on their cost associated with the medicare patients they're caring for. so they don't have an opportunity to see the shared eyings associated with that. senator cassidy: i've got nine seconds left, i'll fit one more in ms. martin we heard about the rise of free standing erment r.'s in texas and colorado. several of you have mentioned that when these facilities close, frankly, folks' primary complaint is i want to have an

emergency room nearby. proponents argue that the facilities are providing increased access to e.r. care in rural areas where not financially feasible to have an entire acute care hospital. the opponents argue that they're cherry picking and although i'm told they take anybody who comes, and the physician-owned facility, the fact that physicians owned it is a -- an issue. currently facilities are not reimbursed by medicare or medicaid patients. you worked in colorado, they're allow. if we're to allow these facilities to be reimbursed by medicare and medicaid would this be a good thing for the rural area, increasing access to rural .r. care if you will or not? ms. martin: i don't think it would be a good thing. clinics are inng the urban areas, not in rural markets, in colorado. i believe in the rural market

the idea of an emergency market conversion from a critical access -- access hospital is you keep care located close to a community. mr. cassidy: it's impractical, if somebody has a head injury, there won't be a neurosurgeon in a rural hospital, probably not anne general surgeon. my wife is a general surgeon so i use think feminine. there's not enough practice, she can't maintain her volume. i thought the emerging paradigm is, stabilize the patient and transport quickly would that not work in colorado? ms. martin: i guess what i'm referring to is free standing emergency clinics in our front range market. we do have surgeried on some of the critical access surgeries do a lot of stable sargse and transferring thatst what we do in rural facilities. i think keeping an emergency

department in a rural facility is very positive and something that we need to do collectively. my thought would be that free standing emergency departments that have started on the front range have not -- mr. cassidy: i didn't mean to interrupt but i'm 2 1/2 minutes over and my folks have been forebearing. thank you for your answer. thank you all. senator hatch: not to beat a parliamentary horse to death but senator cantwell if you would like to be a member of the always powerful senate agriculture committee, if we recognize people on a bipartisan basis going back and forth as opposed to the schedule espoused by my distinguished friend from oregon, the time of arival. for the third time i'm delighted to recognize you.

senator cantwell: i would love to be at this moment ofish yow to the ag committee. i appreciate your leadership and everything you're doing to -- meaning trade and not tariffs. senator hatch: without without objection. senator cantwell: i thank the witnesses and my colleagues for this hearing. the statement by you about where you should live should not determine if -- if you live resonates in lots of my state. the access to health care through the medicaid expansion was big in rural communities in my state. writ large, 600,000 people in our state got expanded coverage. but we have counties like douglas where again so that the chairman knows where apple and cherry and pear industry is located, they have seen an

uninsured rate drop more than 60% thanks -- thanks to that medicaid expansion. so i just wanted to ask about the importance of making sure that we keep that expansion and making the importance of not letting any kind of cap or reduction under this discussion that we had, c.b.o. was saying that the previous proposals on block granting and changing medicaid might cut as much as a quarter out of medicaid over the next two decades. is that problematic, ms. martin, for rural? ms. martin: i think the a.c.a. expansion made a positive difference in the community where my service area is. i think in colorado overall we had an uninsured rate of nearly 20% and that's been reduced in my community down to low single digits. so the coverage for patients allows patients to get access to

care. it's improved the financial bottom line of certainly our organization. i smoke earlier that 70% of our population is medicare and medicaid so our relationship with government payer is ritical to our survival. senator cantwell: did you say 70? ms. murphy: 70. senator cantwell: we love our rural economy and our rural communities, they're a great place for people who are aging to retire and live and it's more affordable, but that means it's a different mix of the population as it relates to how you build a health care delivery system. so the medicaid expansion is so critical to that. i also want to ask about telemedicine because that is another delivery system that i think for us, we have this project echo, the university of washington, working with harvard, you've heard of it obviously probably in your state

as well. but it's allowed medical professionals from seattle to consult with people over in the yakima basis. some of our clinlics to talk about the decisions for really highly complex patients on -- for rep tites c and substance use disorders. so how do we -- what are what do we do about that as it relates to the payment system? i don't think fee for various is any kind of friend to that cost saving technology and that cost-saving collaboration that's existing. ms. martin: i think in our community we're modestly beginning to use of telehealth and part of our challenge is we don't have the resources for a lot of startup equipment and some of the payment constraints don't allow us to be able to provide the service. i think one of the best things we could do is to invest in the startup expense for, particularly rural hospitals and

then allow the services to be reimbursed on a fair basis. we currently do telehealth now and our -- in our community for infectious disease, genetic counseling, and we're trying to build that for oncology coverage and cardiology coverage and it would safe the -- save the system money. when a person go into our emergency department and we have one cardiologist in the community. when that person is not there, we have to, the condition of the patient warrants, we have to transfer them to another area to be evaluated by a cardiologist. they oftentimes get transferred or evaluated and then they're dismissed from the hospital. if we could have cardiology services available 24-, we would save the expense of an air ambulance or ground transport for patient with a cardiology problem. senator cantwell: and there's no reason you can't with telemedicine. ms. martin: that's true. senator cantwell: so it's getting it recognized into the

system in some way. ms. murphy: and paid for. senator cantwell: that's what i meant. that's why the jadge, the fee for service body. i don't have any time left but the doctor shortage issue for rural communities continues and we just need to fight that and so you know, we have counties in our state that have very, ewe know, like 4,000 people and no access. so got to do better. thank you. >> senator? >> how many counties are there in america? all right, let the record show they have no idea. [laughter] the answer is 3,007. we have three counties.

one is the second biggest county in america. we don't have many but we make them big. we have we raise more chicken than any county in america, we raise more green beans than any county in merks in sussex county. we have a lot of people who live in rural areas, and a lot of people who live along the coast. but the rest of the county is sparsely agriculture and we have some hospitals, rural hospitals. we have community-based outpatient clinics. we have a v.a. clinic. that's actually quite good. we still have a lot of people who don't have access to health care because they're just so spread out in the big county. i want to talk a little bit now that we've gotten out of the way i want to talk with you about costs flow from tobacco use, costing our, i say our health care system is costing all of

us. and i understand that we're spending in this country and extra $200 billion because of our addiction to tobacco products and we're spending i'm told another $150 million fwol $200 billion because of obesity from one end of the country to the other including sussex county. but i am told that america's rural communities are still more likely to use tobacco products than other parts of our country. our rural communities are also more overweight than -- and more obese. what tools, what resources what reforms could be we be using to reduce the distear by -- disparity in rural communities when it comes to tobacco use and obesity? and i want to start with dr. murphy. dr. murphy: thank you, senator. what we talked about earlier was

a new way to pay rirle -- for rural health. i don't even say rural hospital bus a new way to reimburse rural hospitals, it's a multipayer global budget system that allows hospitals to focus on the problems that you just talked about and invest, instead of investing in subskill services, invest in tobacco cessation crams. invest in substance use disorder treatments. invest in the clinical -- or the health status outcomes we are looking for and to end this disparity or to gradually decrease this disparity between rural health outcomes and those of their urban counterparts that it's the beauty of this model, it allows for the fsment in care coordination. it allows communities to really take those chronic disease roblems and reallocate the

dollars that they were receiving from services. they had to provide because that's the only way they got paid. it now allows them to address this population health more. >> if any of you agree with what she saiding raise your right hand. if you have something you'd like today to what dr. murphy said -- ms. martin. ms. martin: i would like to add an investment in primary care providers because i think that's the relationship that impacts patient's behaviors and impacts patient's ongoing quality of life. so in so many communities, it's the importance of the primary care provider that impacts the behaviors. >> anybody else want to add? and how do you pronounce your name. >> keith mueller. >> mueller, the right way. mr. mueller: i want to add to the investment in public health instra structure. one, encourage collaboration

between the health care, the clinical health sector and the public sect -- sector and two, direct investment in public health agencies. >> one last quick question. what are your recommendations for how to increase the supply of mental health workers and improve access to mental health treatment in rural and underserved areas. we start all the way on that end please, dr. pink? dr. pink: again, i defer to my colleagues, i have not got xpertise in that area. mr. mueller: one would be to integrate our services with care. ms. martin: investing in education and programs where as a community hospital we can educate and train our work force of our own. we have extreme shortage in the number of qualified professionals in that area. >> thank you. ms. thompson. ms. thompson: i believe it's to

further study the integrated health home model that's at play with our medicaid population and i think there's a great deal to learn there and a great deal of excite optometrist create a in young folks to get into high schools and educate, motivate them about the opportunities in mental health. >> dr. murphy, do you want to add anything? >> lev ranging technologies to access more rural areas with access. >> tell me where you're from? dr. murphy, where are you from? >> chief innovation officer at guise for the. >> i've been there before, you guys do work. >> unity point health in des moines, iowa. >> alamo is a, colorado. >> university of iowa. >> university of north carolina, chapel hill. >> you've come from a long ways, we thank you. we thank you for the work you do, it's really important for our country. for the people.

of our country. thank you so much. > senator portman. senator portman: thank you. appreciate some of the insights about the special challenges we face in rural areas. i come from ohio, we have a lot of big urban hospitals and small rural hospitals, sadly some of them are closing down, consolidating. i will tell you in my state one of the issues that is particularly difficult to deal with in rural areas the opioid epidemic. i would think if you did a, you know, per capitaage soifs the opioid epidemic in my state you'd finalt find in rural areas it's more acute than in some urban and suburban areas. though it's in every zip code. the different is not so much the per capita impact but the services provided. one of the instances is we have more and more children being

rn with nia natal abstinence syndrome, meaning they have to be taking through withdrawal themselvesle. we've got great programs taking mom whors addicted and weaning them off and ensuring baby are abstinencet neonatal syndrome. one of the things i'm hearing about from our children's hospitals is that sometimes they can take care of the babies shortly after their birth but then the babies go home and there's not the ability to continue to monitor particularly in rural areas. i guess what i'm asking today is, and this, i know dr. murphy you mentioned the opioid epidemic. i think you were the one who talked about that, but to the hospital c.e.o.'s maybe you could help me a little on this. what services do your hospitals offer to support the longer term recovery needs of these growing number of children who have this

neonatal abstinence sin trome and for their moms and families and in particular if you work with kids with n.a.s. how do you work to ensure the families are ereceive the support they need? >> in our community we have seen an increase in this issue last year about 11% of the babies that we delivered had this syndrome that you speak of. we've done a lot of training with our staff to have them have the skill set to help the babies, you know, for the first few weeks of life. we sometimes keep them for that period of time. when they move out into the homes, and often times unfortunately they are going into foster homes because if the mother was a user, unfortunately, they are placed with -- in foster families. so we have pediatricians who try to work with these families and develop it. we have a grass roots community organization that involves the schools, early childhood development, some of our primary care providers and together year trying to sort of leverage and

learn resources. it's a challenge was there's not a lot of information about that. we hear from our school teachers particularly elementary school, that they don't feel equipped to deal with the challenges that some of these young children bring to the classroom. so i think just additional resources around education and training so that our work force would know better how to help these children would make a huge difference. >> any others? >> senator we are just beginning to develop a program for moms who have substance abuse and their children subsequently born with neonital abstinence syndrome. the vision for the program is we would intervene when the mother begins medication for treatment prenately and we would, what we say is wrap our arms around the mother and by by with services such as behavior health

services, addiction counsel, pediatric services and other social services to enhance the likelihood of the mom staying in recovery after the baby is born. so the idea behind it is we would test, we would offer these service farce period of up to two years and determine what tests, evaluate the model and determine what intervention really helped that mom to stay in recovery and ghow on to live a productive life. >> thank you. we did pass legislation here called the comprehensive addiction recovery act which has a separate title for pregnant moms, postpartum moms, and kids with n.a.s. since that time we passed a budget which increased the unding for that. for those who aren't aware of that look for it. but if we can spend money up front to avoid some of the longer term problems and figure out what work you mentioned

information and the right kind of therapies to be able to help these babies as well as their moms take advantage of this moment. many moms are facing their addiction because of their pregnancy. in other words they don't want their kids to be born with this syndrome so they're willing to go into treatment where maybe previously they were not. i think dr. murphy is right, how do you then once the baby is born, usually it's a weaning off of the opioid, how do you keep them into that treatment program and longer term recovery and use that family relationship to help kindle some better prospects for longer term recovery. we look forward to working with you on that again in the rural settle i think we have a particular challenge. i appreciate your being here today. look forward to following up. i have another question on the stark law, i'll offer that as a question for the record. senator bennett and i have some legislation we want to get your views on. thank you.

>> thank you, senator. coop, you're up next. >> thank you, mr. chairman. must be high noon. thank you for holding this hearing. we have in my home state of south dakota lots of challenges and act -- in accessing health care services in rural areas and we have providers who work diligently coming up with solutions but there are still barriers and complications on a daily basis. part of it is traveling long distance. there are big hurdles for people to overcome. tracking providers through rural areas another challenge we face. too often we lose south dakotans if they attend school and train in other states. we've got a unique issue in south dakota as well with our tribal communities making sure that they have access to quality health care services due to the pervasive problems that indian health service facilities throughout the great plains recontinue to have. i look forward to working with

my colleagues on this committee and advance solutions that will address many of these challenges. dr. mueller in your written testimony you mentioned that there are multiple studies on how telehealth can serve as a tool to expand access to care in rural settings. i couldn't agree more. i understand you have a current project looking at e-care initiatives in south dakota which range from emergency department eicu, e pharmacy and ore. could you discuss what you have learned so far about the model and how it has increased access in our state of south dakota. >> i'll focus on what we have learned about the use of telehealth in the emergency rooms because that has impressed us the most. what that has done especially since i mentioned c.m.s.

conditions of participation, the condition of participation was changed a number of years ago to allow meeting the necessity for an oncall physician through the use of telehealth and that has made a tremendous difference, because you could have an advanced practice primary care provider, not a physician in the e.r., that can quickly access a board-certified physician. but more importantly is the finding that the use of that telehealth actually helps in recruitment and retention of primary care providers and this goes to a broader point the more we support the professional activity of those health care professionals, the greater the likelihood they will come there and practice with the support of board-certified physicians and greater likelihood they will

stay. the other quick example is in the case of pharmaceutical services inside the hospital in particular which is how the e-health suite reaches out. you can meet the requirements or review of medication as being prescribed in the hospital through the use of telehealth. senator thune: we have put forward multiple policies that were signed into law that will reduce barriers in medicare and promote telehealth and medicare advantage and accountable care organizations in other areas including treating stroke patients. but i'm wondering if there are other areas where they can transform delivery of care in rural states. technology opportunities and medicare and medicaid from your perspective and ms. thompson, if

you would care to comment on hat as well. we should ms. thompson: these young people have grown up with technology and very familiar to them and gives them a lifestyle that is something that is very attractive and would help us answer the needs of recruiting to the rural areas. senator thune: i have another question that i could submit for the record dealing with e.h.r.'s

and how it impacts rural areas as well. i will submit that for the record. thank you. >> suddenly, we have four more. magicically appeared here. senator warner. senator warner: thank you. one of the issues and i think ms. martin, you raised in your testimony, i'm increasingly eeing isolated areas where there may be two competing hospital systems and they leave an isolated island in between where the two systems and you may have rural communities where

the single -- in my state, the county of king george where the practice is about to leave and falls and no one has wanted to take this region and should he retire and his system is being sold, we have a community that could go without any kind of coverage at all. this problem of isolated areas where there's not a larger system that provides the back-office coverage, even if the rural area has high after flewens, how are we going to get at that? are there any things we can do, whether a slight increase in terms of medicaid reimbursements or other reimbursements to make these islands more attractive on a longer-term basis?

>> i don't experience quite as much in my region of colorado because we are defined by a mountain range, we are taking care of. we see it in the eastern plains of colorado and the community with the retirement of a physician or closure of a hospital you have a gap in coverage. i really hope the statewide leadership can push people there. i do think that for the age of physicians going and starting practices on their own, if it hasn't come to an end, it is slowly coming to an end and working with rural health systems so they can do a startup and practice. and i think medicaid reimbursement makes a difference with that, when you have 70% medicare and medicaid, you can't make a private model business work.

senator warner: this individual of this going has to have a back-office operation to support him or her. do you have other ideas in? back in the 1990's, johnson foundation had a huge kind of focus on this issue of underserved communities and g.p. practices opening up. but as you said, the ability to open up a practice on your own without additional support is really hard. has anyone thought about beyond what the government could do in temperatures of reimbursement levels or loan forgiveness to make sure you don't leave these isolated islands not having coverage? >> i guess my thought on that would be i think rural systems look at that and make a difference. the idea of the visa program,

things that will help small hospitals to get providers that will go to these communities through long-term incentives, that's what comes to mind for me. the idea of critical access hospital or rural hospital being able to get paid under a different reimbursement model gives you the resources to take on those communities that don't have providers. think it is a real challenge. senator warner: anyone else want to add. incentive reate an for systems to drop providers so they can qualify for an increased reimbursement. i would be happy to hear from anybody else on the panel. that would be my only question. i think this is not -- when you had the hospital systems who want to make a profit and not

willing to stretch for these isolated islands and with the retirement of many doctors and the ability to go into these communities, real problem, real issue. we have to find a way to crack this code. tharning you, mr. chairman. >> senator: i thank the panel. i first want to concur on comments particularly on rural health care. it is an area that we can do much better and proud to join my colleagues in legislation that would allow for medicare reimbursements for telemedicine. but i want to talk about what we do in maryland. we are the only state in the country that has an all-payer rate system for hospital

reimbursement. mr. cardenas: and just approved this month the final aspects of this demonstration that allows judged on ls to be the growth rate of health care costs rather than the hospital rate. senator cardin: coordinating with the cost of that patients health care beyond the hospital care. there is incentive to keep people healthy. the western maryland regional center offers care coordinateors and teleprompting for blood pressure and works on the social needs of the patients and that can be incorporated in the rate structure, which means all the third-party pairs are helping to

reimburst that. so it works to allow rural areas to have full access to the continue you umh of services. so my point is, this model -- and this is being implemented in our state, how do we take this type of a model in the rest of the country that is in the stove pipe reimbursement that works against rural america? how do we take the model in maryland and use this to develop more access through care and reducing the growth rate of health care costs in rural america?

>> has also the metrics of total cost to care involved in the model, but really using it as a way that maryland did back in 2010 and trying to -- but with eight more years of knowledge of how do we transform and focus on population health. we concur it's a great model. i had previously testified that in your state next week, the johns hopkins university of public health is conducting a

summit for states to attend on global budgeting and we have over 26 states that are interested in pursuing this. >> in colorado, we are beginning to explore this model as well. we are in the beginning stages of it. but the conversations around global budgets in ways to keep our communities healthy is at the forefront of our mind, too. >> and i want to applaud the recognition that the current payment systems for rural america, while all well intentioned and all designed at a certain point in time to help save rural health care, at this point in time are setting rural health care back and not moving into population health and the alternate payment models. and i want to applaud the work.

>> i think the payment structure does not allow for this to occur so you have to find creative ways to do it and allow some neck nisms that allows you to use a modification that brings down the overall health care costs in your community so the hospitals are not the driving force for utilization but part of the innovative care. thank you, mr. chairman. >> senator mccaskill. senator mccaskill: i thank the chairman and ranking member member. we anticipated that most us of would be in the n dmp arch arch markup. i appreciate the consideration. i want to talk a -- i want to say for the record, this is a

crisis in our country, the cost of health care in rural communities and we are doing nothing in the united states congress to address it. we know the premiums on the exchanges are going up because of various things that have occurred and i think i can get everybody to agree when when we have more uninsured and underinsured, we have more rural hospitals in stress and premiums go up who buy it, correct? all five witnesses agree. every time the uninsured number goes up, it costs the taxpayers and including who buys insurance. so the idea of keeping the uninsured number down is all about saving money in the health care system and making everyone response i will for their own health care bills. it's ironic to me we will go

back to the battle days where the uninsured numbers are climbing and we are doing nothing right now to address it. and there are a lot of bills out there that would help. i'm hoping that leader mccome will allow some of the bipartisan bills so we can provide some relief. the issue i want to talk about a state audit done in my state about a rural hospital and what was discovered is there was a small rural hospital that ransferred open and all of a sudden there was a giant increase in laboratory billings and what happened, the vast majority of these billings for lab individuals who were not patriots of that hospital. billings began after the

management agreement despite the act the hospital had not begun processing. the hospital partners, which is on the hospital took it over doctors 3 out of state tore perform laboratory services throughout the country. it appears they reduced putnam to a shell organization for purposes of lab billing. this morning i'm directing a letter to the inspector general to investigate this. evidently this same group was involved in the northern district of georgia, sued on a pass-through billing scheme at aerial regional hospital. the missouri audit findings note that a large private insurance company identified $3.4 million fraudulent claims to putnam in

recent months. my question to you that are researching hospitals, is this a trend? are these companies coming around and buying up these hospitals to front for shady billings on lab work? have you seen this anywhere else? >> no. we have not. catching catching this letter is going to h.h.k.s. today and i think there is in all likelihood and there is criminal activity so where and there should be a cap on payments to labs outside of the state, particularly for billings that are coming from a rural hospital. i know you all talked about the lack of doctors in rural communities. i had the university hospital in columbia, missouri saying they are taking more rural patients than they should and bypassing

their hospitals and going to university hospitals. can any of you address many, ms. martin, address the problem we have with ob-gy nmp s to be in rural areas and how we can incentivize doctors to go to these rural communities and stay in these rural communities? ms. martin: i think we have spoke today the loan repayment rograms, the conrad and visa program. but they are important. it is easing about the regulatory programs. they want to be taking care of physicians and work at the top of their skill, they are more satisfied in a rural community and i think we talked about

telehealth, because when physicians know they can be covered when they are off or out or don't feel the 24 slb 7 responsibility, that is satisfying for them as well. we are fortunate in the ob-gyns that we have that work there and we work with midwives who call for regular deliveries to give them relief and call time and balance of life is different. and so it's the use and complement of those nurses that helps to keep the ob's in our community. senator mccaskill: thank you, mr. chairman. >> my state of ohio struggles with the highest rates of infant

mortality. and we have invested in public health for decades and more complicated between 2008 and 2014, 400 women died in ohio, more than 1,000 babies died before their first birthday. obviously, these tragedies weren't felt equally across all communities. african-american communities suffer diss proportionately to the greatest extent. we also know that in terms of , other infant mortal towns are more influential. this hearing is about rural hospitals and rural health care. i'm concerned not in a conspiracy sort of way but this committee has done nothing on

infant mortality when the problems are acute and maybe more so in urban areas. there is a national republican effort, troubling, that governors are as work requirements seem to be the new ar right wing in this country, ood stamp and even if they are working or incapable of working, they are looking to do work requirements for medicaid and doing it in a way that will absolve more rural white mmunities, high unemployment from these work communities. black families, increasely because they are smart and figured out how to do it, legally, but immorally, if i could say that, because this is about rural health.

i will stick to the question about that. dr. murphy., what do we do to support rural communities and proving outcomes for moms and babies. along n said something these lines. >> we have to be realistic with maintaining services in rural communities. i think ms. martin gave an example where there is adequate coverage and in case of an emergency could cover for one another. t is a very high intensity and ob-gmp y nmp has a high intensity schedule and you need to talk about render the care.

so i think in areas where they are fortunate enough to have the physician services on site in a high quality manner, then we should do that. i think we should work through ther providers such as nurse mitwives and physician's assist ants to offer some of the care in the rural community when it is not possible so a mom doesn't have to drive 35 miles for their monthly appointment. but i think it is a very staff in service to rural communities unless you have the number of physicians that ms. martin talked about. mr. brown: i hosted a conference for c.e.o.'s from smaller

hospitals. we have incredible, from the big children's hospitals to the best hospitals but they are not often part of the conversation and rarely come to washington and we host a number of them. senator brown: the challenge we faced is attracting a work force. and i appreciate that. i would like to before i yield back, mr. chairman and i wanted to thank senator wyden has been helpful. and i would like to close with this, just a comment. senator roberts and thank senators grassley and case question on a bipartisan bill. senate 109 to allow pharmacists to build medicare. pharmacists are not the greatest need in every case but they are

central to a lot of this, too. chronic ork with disease management and dozen members of this committee. there were mr co-sponsors of this legislation. the chairman is not here. and i i am hopeful to work with me and senator wyden to help all of you with the challenges you deal with. thanks senator roberts. senator wyden: i wanted to tell senator brown to work with him. ecause as usual he is going to going. so we have been at it for almost 2 1/2 hours. you all have been terrific, but what i'm struck by is i don't

think we have mentioned over the course of 2 1/2 hours which is really the backbone of lurel health care from sea to shining sea and that is rural health clinics. and i'm heading home. we have 83 of them in my home state. i know, ms. martin, you have an significant number. n my home state, these rural clinics are literally the backbone of health care, where are seniors go and people go for preventive screenings and primary care services and everything for them to stay healthy and out of the hospital. i would like to go right down the row again since we have this little window here to try to look at what is important going

forward. i don't think -- why don't we start with you, dr. mueller, one item on their wish list. >> optimizing the use of the nonphysician professionals and this is state policy, and federal policy on participation nd supervision requirements. [indiscernible] >> the suggestion by dr. mueller, i would strongly endorse. >> the issue with co-location and co-mingling rules that provides the integration of the health care provider. senator wyden: that is so important and chairman roberts is the co-chair of this rural health caucus. and we talked about this constantly. not a week goes by. i say this whole committee of

the co-mingling rules that ms. martin is talking about, this ooks like a bureaucratic la-la land. >> strengthening the support to nurse practitioners and p.a.'s and extenders that many times are working in very isolated areas to give them the support, the education the retraining and access. senator wyden: giving them a bigger role. we had it in our bipartisan bill with eight democrats and eight republicans, you ought to practice the top of your license and particularly in these rural areas. why you wouldn't let people practice at the top of their license in a rural area? that is common sense. yes, ma'am. indiscernible]

senator wyden: you all have been terrific and been at it for close to 2 1/2 hours. and to me, without rural health care, you cannot sustain rural life. this is not rocket science. there are a couple of pieces to the puzzle that are a part of it. we are trying to expand broadband and one of the striking aspects of this, we started a revolution. what we are doing is moving from acute care which back when i was director of the great panthers, if you broke your ankle, that's not medicare. so we had a terrific group of embers led by senators

>> by the close of business on

june 8. this hearing is adjourned. thank you so much. [indiscernible] >> the hearing is adjourned. indiscernible] [captions copyright national cable satellite corp. 2017] captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org

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