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Government Relations Update: NAMSS Equips MSPs With Hospital Closure Toolkit

By Molly Giammarco, MPP

Hospital Closures Continue Upward Trend

The year 2020, even before COVID-19, was shaping up to be another big year for hospital closures. In 2019, hospital closures reached a record with 47 closures — almost double that of 2018. These statistics are alarming, as no equivalent increases in hospital openings accompany these closures.¹

By March 2020, eight hospitals had already closed, a foreboding indication for hospitals and healthcare access. Factoring in COVID-19 ramifications, 2020 may be another record year for
hospital closures. According to the Guidehouse 2020 Rural Hospital Sustainability Index issued in April 2020, over 350 rural hospitals across 40 states are at risk of closing.²

Government entities also are noting this trend. In 2018, the U.S. Government Accountability Office (GAO) reported that 64 rural hospitals closed between 2013 and 2018. The GAO Report, “Rural Hospital Closures: Numbers and Characteristics of Affected Hospitals and Contributing Factors,” cited revenue pressure, complex patient populations, and clinician recruitment and retention challenges as factors contributing to the uptick of rural hospital closures.³

These trends are not just a rural problem. Urban hospitals of varying sizes face closure threats alongside their rural and critical access counterparts. The 2019 closure of Hahnemann University Hospital serves as a stark realization that these closures can happen anywhere — and abruptly.

Regardless of size and region, a hospital closure creates a ripple effect throughout a community, impacting the economy as well as the community's access to healthcare.

Hospital consolidations and mounting financial hardships that result from revenue shortcomings from low patient volume and reduced or lower Medicare reimbursement leave many small, standalone facilitates exposed and unable to afford to operate.

Rural hospitals face a unique hospital capacity problem, as many local patients bypass local facilities for urban hospitals. The 2018 urban hospitals’ aggregate occupancy rate was 66.8% and rural hospitals’ aggregate occupancy rate was 41.1%. In its March 2020 report to the U.S. Congress, the Medicare Payment Advisory Commission (MedPAC) reported that in 2018, 48% of rural Medicare beneficiaries’ hospital admissions were to urban areas — an increase from 40% in 2010.⁴

This series of pressures creates a snowball effect that encourages hospital consolidations that directly compete with smaller, more vulnerable standalone hospitals. Facilities within a health system are not immune from financial strain. Over the past few years, several hospital closures resulted from a health system’s financial mismanagement that had little to do with individual hospital performance.

MedPAC’s 2020 Congressional Report states that of the 69 hospitals that closed in 2018 and 2019, 43 had fewer than 100 beds and 39 of which were in urban areas. These hospitals also had, on average, 25% inpatient-occupancy rates and a payer margin of -17 the year prior to closure.⁵

Preserving Practitioner Data During Hospital Closures

Hospital closures present a unique challenge to MSPs who are often the guardians of practitioner data and credentialing records. Although some hospital closures are predictable far in advance, others can be abrupt and leave little time for the medical staff office to develop or execute a protocol for collecting, preserving, and storing practitioner credentialing and privileging data. MSPs already face the burden and risk of performing quality analyses on incomplete data — particularly with regard to affiliation history gaps — and lost or incomplete data from closed hospitals only exasperate this challenge.

Although most facilities have closure plans in place, the emphasis on preserving practitioner data is not always comprehensive. Practitioner data, both paper and electronic, is a valuable asset that medical staff personnel at a closing hospital should preserve and make accessible post-closure. States generally provide guidance on retaining credentialing and clinical records, and federal mandates ensure minimum-maintenance periods for certain classes of patients and selected types of data information. As stewards of practitioner data, MSPs play a critical role in preserving this data during a hospital closure.

NAMSS Introduces the Hospital Closure Toolkit for MSPs

NAMSS recognizes the important and daunting responsibilities that fall on an MSP during a hospital closure and created the NAMSS Hospital Closure Toolkit to help MSPs prepare, communicate, and execute plans to preserve practitioner credentialing data.

The NAMSS Hospital Closure Toolkit provides guidance on federal, state, and association requirements and recommendations for handling practitioner data during a hospital closure. This toolkit outlines steps MSPs should take, as well as questions and scenarios MSPs should consider, during hospital closures.

The NAMSS Hospital Closure Toolkit is available on NAMSS’ website and is available to all NAMSS members. It is critical that all MSPs have access to, are familiar with, and, ideally, provide input into their facilities’ closure procedures. Preserving practitioner data is essential to developing or maintaining comprehensive credentialing portfolios for all affiliated practitioners. In the event of a hospital closure, MSPs can play a significant role in preserving the integrity of that data — for facilities and patients for years to come.

References

1 Healthcare Financial Management Association. https://www.hfma.org/topics/news/2019/12/47-hospitalshave-closed-in-2019--medpac-reports.html.
2 https://www.prnewswire.com/news-releases/one-in-four-us-rural-hospitals-at-high-fnancial-risk-of-closing-aspatients-leave-communities-for-care-301037081.html
3 U.S. Government Accountability Office. Rural Hospital Closures: Number and Characteristics of Affected Hospitals and Contributing Factors. August 2018. https://www.gao.gov/assets/700/694125.pdf.
4 MedPAC. Hospital Inpatient and Outpatient Services: Assessing Payment Adequacy and Updating Payments. March 2020. http://medpac.gov/docs/default-source/reports/mar20_entirereport_sec.pdf
5 Ibid.

Molly Giammarco, MPP, is the senior manager for NAMSS policy and government relations.