MAFs primarily served patients with urgent but uncomplicated conditions and stabilized patients with more complicated needs before transferring them to full-service hospitals. Moreover, Medicare’s costs for inpatient care at MAFs were lower than if the care had been furnished in rural hospitals. RPCHs Treat Patients With Less Complex Illnesses or Stabilize Them for Transfer

As envisioned when the program was authorized, most RPCH inpatients have less complex illnesses that do not require intensive or high-technology care. In addition, RPCHs often serve as the source of primary care for residents in their areas. The average stay for the 1,708 inpatients treated by RPCHs between September 1993 and May 1996 was 2.85 days. As we found when we reviewed services provided by MAFs in Montana, the three medical conditions most commonly treated by the RPCHs were pneumonia (247 cases), heart failure and shock (141 cases), and inflammation of the digestive canal (99 cases). The 13 RPCHs treated more than 6,700 different Medicare beneficiaries during their latest available cost-reporting period and submitted more than 28,000 outpatient claims for services for these patients (see table 2). Although RPCH costs are slightly higher (8.8 percent) than PPS payments to rural hospitals, RPCH costs would have been lower if claims included in our review had complied with the 72-hour maximum length-of-stay requirement in effect when these admissions occurred. Payments for those days totaled an estimated $295,000. Medicare RPCH payments for the 163 beneficiaries who were initially treated at an RPCH and transferred to a full-service PPS hospital totaled about $322,000 (see app. Medicare payments to RPCHs for inpatient stays were, however, somewhat higher than payments would have been to rural PPS hospitals to treat the same patients. A primary reason for this was that about 21 percent of the inpatient cases had lengths of stay that exceeded the 72-hour maximum in effect at the time, and 8 percent would have exceeded the 96-hour limit for CAHs. HCFA also has not established a way of checking compliance with the requirement that a physician certify that patients admitted to RPCHs, now CAHs, are expected to be discharged within the maximum allowed length-of-stay limit. Objectives, Scope, and Methodology

Our objectives were to develop information on the cases treated and inpatient and outpatient services performed at RPCHs, the relative cost of providing inpatient health care services to Medicare beneficiaries at RPCHs and acute-care hospitals, and compliance with the physician certification and 72-hour inpatient stay requirement. We then compared those costs with the amount Medicare would have paid an acute-care hospital under PPS for the same DRG at hospitals in the rural areas of the applicable states and the urban hospitals nearest to the RPCHs. From the outpatient claims, we extracted data on the types of services provided to Medicare beneficiaries. For each patient transferred, we compared the RPCH cost to what a rural PPS hospital would have been paid if it had transferred the patient. We did not verify RPCHs’ compliance with the requirement that physicians certify that a Medicare patient can reasonably be expected to be discharged within 72 hours (changed by BBA to 96 hours) because this certification is entered on patient records maintained by RPCHs and it was not practical for us to review these records.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the Rural Primary Care Hospital (RPCH) Program, focusing on: (1) assessing compliance with the requirements that RPCHs have an average length of stay of 72 hours or less and that physicians certify that inpatients are expected to be discharged within 72 hours; (2) assessing whether these two requirements affected the type of patients treated by RPCHs; and (3) comparing Medicare's cost for inpatient services in RPCHs to what those costs would likely have been in hospitals paid under the prospective payment system. GAO also looked at how the experience under the RPCH program could be used in implementing the expanded Critical Access Hospital (CAH) Program.

What GAO Found

GAO noted that: (1) RPCHs provide additional and, likely, much more proximate access to health care for Medicare beneficiaries residing in the rural areas where the facilities operate; (2) these facilities treat, on an inpatient basis, beneficiaries with less complex illnesses and furnish important stabilization and transfer services for those with more complex conditions; (3) moreover, RPCHs serve as the source of outpatient care ranging from primary to emergency care; (4) the 13 RPCHs for which complete data were available had 1,708 Medicare inpatient cases since they were certified to participate in the program; (5) the RPCHs provided the full inpatient stay for 1,545 beneficiaries who had less complex needs and stabilized and transferred an additional 163 beneficiaries to full-service hospitals; (6) the RPCHs treated primarily patients (65 percent of the total) who had respiratory ailments such as pneumonia, circulating system problems such as congestive heart failure, and digestive system illnesses such as inflammation of the digestive canal; (7) in addition, during the most recent cost-reporting period, these RPCHs provided more than 28,000 outpatient visits for more than 6,700 beneficiaries; (8) these outpatient visits ranged from those for primary care to emergency treatment for injuries; (9) Medicare payments for the 1,545 cases from September 1993 to May 1996 treated solely by an RPCH were slightly more than if these cases had been treated at full-service rural hospitals and somewhat less than if they had been treated at urban hospitals; (10) a primary reason why RPCH costs were higher than those for rural hospitals was that about 21 percent of the stays exceeded the 72-hour stay limitation in effect at the time; (11) without the extra inpatient days these cases involved, RPCH costs would likely have been lower than those for rural full-service hospitals; (12) the Health Care Financing Administration (HCFA) had not established a way to enforce the 72-hour maximum length-of-stay requirement for RPCHs, and it is important that the agency do so for the replacement CAH program's 96 hour maximum; (13) as is to be expected with limited-service hospitals, RPCHs in the four states GAO studied transferred a higher portion of patients to other hospitals than did full-service rural hospitals; and (14) total Medicare payments for the 163 transfer cases were about $148,000 higher than if a full service rural hospital had transferred the patients to another acute care hospital because of differences in the way payments are determined in the two situations.