• PIERRE, S.D. (AP) -- Twenty-six rural hospitals in South Dakota are threatened by a federal agency's proposal that could take away the extra payments they get for service to Medicare patients, a move that might even force some hospitals to close, a state official said.
• State Health Secretary Doneen Hollingworth said the proposal is a long way from being approved, but state officials plan to fight the proposed change in the way rural facilities designated as critical access hospitals are reimbursed for care provided to Medicare patients.
• "There would be a big hole, a big gap, if some of these facilities weren't able to stay open because of reimbursement policy," Hollingsworth said.
• Critical access hospitals generally have to be 35 miles away from the nearest other hospital, but South Dakota and other states previously were allowed to designate other facilities that did not meet that distance requirement as critical access hospitals.
• The Office of Inspector General in the U.S. Department of Health and Human Services recently recommended that Congress be asked to let federal officials re-examine hospitals within 35 miles of their closest neighbors, keeping critical access status and the higher payments only for those that serve patients who otherwise would not have reasonable access to hospital services.
• The report said nearly two-thirds of the nation's 1,329 critical access hospitals would not meet the 35-mile distance requirement, and Medicare would save substantially if eligibility requirements were changed.
• Critical access hospitals are reimbursed for 101 percent of their costs of treating Medicare patients, a much higher rate than other hospitals receive. The difference in 2011 was about $860,000 per rural hospital, according to the inspector general's report.
• In a response, the federal Centers for Medicare and Medicaid Services generally supported the recommendation, but said it specifically supports President Barack Obama's more limited proposal to eliminate critical access status only for hospitals less than 10 miles from another hospital and to cut the reimbursement to 100 per

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