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| vol 16, num 2 | July, 2019 |
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| Unique Problems Facing Rural Health Care |
| According to the National Rural Health Association (NRHA), since 2010, more than 100 rural hospitals have closed. This trend does not appear to be slowing. One recent study by Navigant Consulting, Inc. suggests that 21 percent or 430 hospitals across 43 states are at high risk of closing unless improvements are made soon to correct their total operating margins, days cash on hand, and debt-to-capitalization ratios. A high number of these hospitals are located in the South. For example, the Navigant study indicates that between 40 and 50 percent of the rural hospitals in Alabama, Georgia and Mississippi are at risk — and many of these
hospitals are considered community-essential facilities.
What Is the Diagnosis?
Why are rural hospitals going under at an alarming rate? In most situations, there is not one single cause but rather a combination of contributing factors.
Physician Shortages and Difficulties in Recruiting Physicians
One factor negatively affecting rural hospitals is a chronic shortage of physicians and the difficulty in attracting physicians to rural areas. According to the Health Resources and Services Administration (HRSA), as of June 2018, an additional 4,022 rural physicians were needed to close the gap in regions facing physician shortages. The raw reality is that physicians can make more money in urban areas than rural areas, and urban physicians have access to better equipment than their rural colleagues do.
High Turnover in Leadership
The American College of Healthcare Executives reports that turnover rates for rural hospital CEOs range from 18 to 20 percent annually and in some areas are as high as 30 percent.
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| Is Chapter 11 a Quick Fix?? |
| The economic challenges in today’s current health care climate are well documented and run to the core of a fundamental national debate rearing its head in the upcoming 2020 election cycle. “Medicare for All” is more than a sound bite or political posture; the larger issue is whether U.S. citizens believe that access to affordable health care for all is a right in this country. That issue won’t be addressed here but in legislative bodies across the nation. While the debate rages, those who can afford access to the best will travel to and pay for the best care. Those without such means will take their medical care where, when and however
they can get it, even if it means traveling to foreign lands for affordable care and medications. Those living in rural America know all too well the shrinking options that are available to them.
A local community hospital is more than just a regular business entity. Often, it is the largest sole employer within a rural area/county. Yet finding and retaining sufficient and talented staff in rural areas is a factor contributing to higher costs or a limited menu of services.
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| Problems Facing Rural Hospitals |
Many Americans lack health insurance. Even people with health insurance may seek care from out-of-network hospitals that don’t participate in their health plans. That is what happened with the debtor in In re Dietrich, because “his health insurance carrier would not pay the Hospital directly” and instead paid the debtor the cost of his hospital bills. After receiving the money from the insurance company, however, the debtor never paid the hospital. Consequently, the U.S. Bankruptcy Court for the Eastern District of Pennsylvania found that his debt to the hospital was not dischargeable.
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| Deepening Divide: Fifth Circuit Adds to Split Regarding Bankruptcy Court Jurisdiction over Social Security Claims |
| Bankruptcy court jurisdiction over Medicare issues is increasingly important given the distressed state of the health care industry and skyrocketing level of bankruptcy filings by health care providers. On May 10, 2019, in Benjamin v. United States (In re Benjamin), the Fifth Circuit rejected the argument that the “recodification canon” deprives bankruptcy courts of the requisite subject-matter jurisdiction to hear Social Security claims, bolstering the minority view previously articulated by only the Ninth Circuit regarding whether Section 405(h) of Title 42 (the “Medicare Act”) bars bankruptcy courts from adjudicating Social
Security and/or Medicare disputes. Benjamin involved a specific inquiry into whether 42 U.S.C. § 405(h) divests bankruptcy courts of the jurisdiction to hear Social Security claims. As bankruptcy court jurisdiction over Medicare claims is derived from the same statute, the Fifth Circuit’s decision will likely have further significant implications.
The Social Security Administration (SSA) determined that the debtor in Benjamin received an overpayment of Social Security benefits, thus entitling the SSA to recoup the overpayment from him by withholding some future Social Security benefits. The SSA denied the debtor’s request for waiver, and he properly appealed to an administrative law judge.
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