SCHUMER: AFTER YEARS OF FIGHTING TO PROTECT FEDERAL CRITICAL ACCESS STATUS FOR RURAL UPSTATE NY HOSPITALS, SCHUMER ANNOUNCES FEDS HAVE HEEDED HIS CALL TO CHANGE RULES SO THAT NY HOSPITALS CAN CONTINUE TO RECEIVE OVER $35M IN REIMBURSEMENTS ANNUALLY & MAINTAIN CRITICAL SERVICES IN UPSTATE’S MOST UNDERSERVED RURAL COMMUNITIES

Critical Access Hospital (CAH) Status Provides Rural Hospitals Enhanced Reimbursement Rates To Keep Healthcare Services In Underserved Communities Like Those In The North Country & Southern Tier; BUT A Rules Change Risked Arbitrarily Making Many Rural Upstate Hospitals Ineligible Putting Healthcare Providers At Risk

Schumer Immediately Began Leading The Charge To Protect Rural Upstate Hospitals, Writing Multiple Letters, Calling HHS Sec Personally To Fight The More Restrictive Definitions; Now Feds Have Heeded His Call To Let These NY Hospitals Continue To Receive Over $35M Annually To Maintain Essential Care

Schumer: North Country, Southern Tier, Rural Hospitals & Upstate Families Can Breathe A Sigh Of Relief, CAH Is Here To Stay!

U.S. Senate Majority Leader Charles E. Schumer today announced that the Centers for Medicare and Medicaid Services (CMS) has heeded his call and proposed to reverse its previous rules change for the eligibility criteria for rural hospitals that put many Upstate New York hospitals at risk of losing their Critical Access Hospital (CAH) status. The CAH program allows smaller rural providers, like those in the North Country and Southern Tier, with the designation to receive greater federal reimbursements for care to keep these otherwise financially vulnerable rural hospitals in the communities that need them most. Schumer explained that in 2015 the CMS issued a new policy change without going through the proper notice and rulemaking required by law that would enact more restrictive eligibility definitions for the CAH program, costing these rural hospitals millions.

Schumer immediately began leading the fight to maintain CAH status for Upstate’s rural hospitals, sending multiple letters highlighting the issue and the impact it would have on rural residents, and personally called HHS Secretary Xavier Becerra to fix this bureaucratic mistake that could cost thousands of rural family’s critical healthcare services. Thanks to Schumer’s advocacy, CMS has now proposed to reverse this disastrous policy and clarify the language that would have caused New York’s CAH’s to lose their status, saving hospitals millions and allowing them to maintain their presence in rural communities.

“Upstate families in rural communities from Jefferson to Delaware County depend on their local hospitals for lifesaving care and essential medical procedures. I promised our rural hospitals that I would not stop fighting until these rules changes were fixed and their Critical Access Hospital designation was ensured,” said Senator Schumer. “Now I am proud to announce that rural communities from the North Country to the Southern Tier can breathe a sigh of relief as these essential healthcare providers will continues to receive the millions in federal reimbursements they need and deserve to keep saving lives.”

Schumer explained that the Critical Access Hospital (CAH) designation was created by the Balanced Budget Act of 1997 to give small rural healthcare providers greater financial reimbursement for servicing Medicare and Medicaid patients, as well as provide other resources, in order to keep vulnerable rural hospitals financially stable. One factor for CAH eligibility requires that a hospital be a certain distance from another hospital by either a primary or secondary road and provide around-the-clock emergency services. Previously, CMS regulations stated that a CAH hospital must be at least 35 miles from the nearest hospital by “primary road”, defined as any road in an interstate system or a US-numbered highway, or at least 15 miles in areas with mountainous terrain or only “secondary roads”, defined to include single lane state routes.

In 2015, however, CMS issued a memo that changed the definition of primary road to include any road that is in the National Highway System, which would include single lane NYS routes. This significant expansion to language and more restrictive definition of “primary road” if enforced would have led to dozens of CAHs in multiple states, including at least nine in New York, to lose their CAH status and hundreds of millions of dollars of needed funding to keep them in business serving rural patients.

At the onset of the COVID-19 pandemic, Schumer fought to get CMS to not enforce this policy change, maintaining this funding stream through the height of the public health emergency, although it remained on the books ready for enforcement. The senator continued to write multiple letters to HHS and CMS demanding for them to change this policy, and personally called HHS Secretary Xavier Becerra to push for these protections for rural hospitals in New York and across America. Now, because of Schumer’s efforts, CMS has issued a notice of proposed rulemaking to revise this policy and clarify that single lane NYS interstate routes would not count as primary roads, thereby saving NYS CAH’s from losing their status. 

Specifically, if this change were to have been fully enacted and enforced, it would cost Upstate New York hospitals over $35 million a year. Some of the impacted New York hospitals would have included:

Hospital	Reimbursement received from CAH program in 2020
Carthage Area Hospital	$9.7M
Community Memorial Hospital	$4.1M
Ellenville Regional Hospital	$4.7M
Gouverneur Hospital	$3.3M
Lewis County General Hospital	$5.3M
Margaretville Hospital	$2.4M
O’Connor Hospital	$3M
Orleans Community Health (Medina Memorial)	$1.6M
Soldiers and Sailors Memorial Hospital	$1.4M

A copy of Schumer’s most recent letter to CMS appears below:

Dear Administrator Brooks-LaSure:

I write to ask that CMS revise a sub-regulatory guidance issued in 2015 to protect the Critical Access Hospital (CAH) status of more than seventy rural providers nationwide, including nine in New York State.  In your March 31, 2022, letter to the Honorable Antonio Delgado regarding this same issue, you indicated that the Centers for Medicare and Medicaid Services (CMS) would undergo a formal notice and comment rulemaking process to formalize the eligibility criteria for CAH status. Rather than go through a time-intensive rulemaking process, I ask that CMS simply revise Chapter 2 of the State Operations Manual (SOM) to reflect the pre-2015 requirements for CAH eligibility and advise state surveyors not to apply the guidance until the revision is complete.

As you know, CAHs were created by the Balanced Budget Act of 1997 and allow smaller rural providers with the designation to receive greater financial reimbursement for servicing Medicare, Medicaid and Tri-Care patients, access to grant funding and other resources – all designed to keep otherwise financially vulnerable rural hospitals viable. In order to qualify as a CAH, a hospital must be – among other qualifications – a certain distance from another hospital by either a primary or secondary road and provide around-the-clock emergency services. Before June 2015, CMS regulations stated that a CAH hospital must be at least 35 miles from the nearest hospital by “primary road”, defined as any road in an interstate system or a US-numbered highway, or at least 15 miles in areas with mountainous terrain or only “secondary roads”, defined to include single lane state routes. Alongside New York’s eighteen CAH’s, there are 1,353 CAHs nationwide as of 2021 under these definitions.

However, on June 26, 2015, CMS sent a memorandum (S&C: 15-45-CAH) to State Survey Agency Directors, who evaluate CAH eligibilities in each state, advising them of several policy changes regarding CAH status. On page 3 of the memorandum, CMS changes the definition of primary road to include any road that is in the National Highway System, which would include NYS routes that are a part of the System. This expansion of the definition of “primary road” could result in dozens of CAHs in multiple states, including nine in New York State, not meeting the revised distance requirement. Following the issuance of that first memorandum, CMS included this new definition of the “primary road” in Chapter 2 of its State Operations Manual, further solidifying this harmful policy change.

It is very troubling that such a substantial policy change that impacts the care of thousands of rural Americans, was made without going through the proper notice and comment rulemaking procedure. This is a position that CMS has traditionally agreed with. In fact, on October 31, 2019, the Office of the General Counsel (OGC) advised CMS that “any Medicare issuance that establishes or changes a ‘substantive legal standard’ governing…payment for services…, must go through notice-and-comment-rulemaking.” OGC furnished this guidance in response to adverse litigation against the Secretary in Azar vs. Allina Health Services. According to the standard set in that OGC advisement, expanding the definition of “primary road” through a memorandum should also constitute a substantive legal standard changed through a sub-regulatory procedure that ought to have been done through notice and-comment rulemaking.

Prior to the start of the public health emergency (PHE) at least one hospital we know of was closed due to the enforcement of this policy change. Thankfully, CMS has not enforced this policy change during the PHE, although it remains on the books ready for enforcement. In your March 31, 2022, letter to the Honorable Antonio Delgado, CMS indicated that the agency has delayed using the 2015 distance criteria for CAH recertification for the duration of the PHE. I am thankful that the agency agrees that it is inappropriate to pull critical funding streams from rural providers while the COVID pandemic continues to place enormous public health and financial strains on these providers. However, I am concerned your letter implies that enforcement of the sub-regulatory guidance may commence at the end of the PHE prior to CMS undergoing rulemaking. I respectfully request that CMS confirm that it will not enforce the current sub-regulatory guidance changing the definition of primary road in its State Operations Manual while the agency considers potential notice and comment rulemaking.

Further, I request that CMS revise its State Operations Manual to restore the pre-June 26, 2015 definition of “primary road”. As it stands today, the current policy after the definition change is not enforceable as the post-June 26, 2015, definition of primary road changed a substantive legal standard without being adopted through notice and comment rulemaking. 

Restoring the definition of primary road back to the pre-June 26, 2015, language in the State Operations Manual will make clear to State Survey Agency Directors the currently applicable policy that may be enforced when either certifying a new CAH or recertifying an existing CAH. I further ask that CMS provide State Survey Agency Directors with a memorandum analogous to the one on June 26, 2015, advising them of the change to the State Operations Manual and their obligation to apply the pre-June 26 2015 guidance.

Sincerely,

 

###