Small, Rural Hospitals: A Fight for Survival

Abstract

Declining reimbursements, resulting from the 1997 Balanced Budget Act (BBA), have placed an enormous strain on small, rural hospitals that are typically dependent on Medicare patients for the majority of their revenue. Under the BBA, new managed care and private options are available, payments to hospitals are reduced, Part B premiums are increased, and a prospective payment system (PPS) is authorized for outpatient, home health, and skilled nursing services. The Balanced Budget Refinement Act of 1999 (BBRA) attempts to rectify some of the reductions in reimbursement. Nonetheless, to take advantage of the BBRA and to address declining reimbursements from other sources, rural hospitals should expand outpatient services, embrace telemedicine and telehealth initiatives, and actively seek alternative funding.