May 17, 2024

ICYMI: At Hearing, Warren Calls Out Private Insurers in Medicare Advantage for Accelerating Rural Hospital Crisis, Praises Biden’s Minimum Staffing Rule for Increasing Quality of Care

Michael Topchik: “I work with hundreds of Rural Health executives who tell me that (Medicare Advantage) is keeping them up at night. It is one of their single biggest concerns.” 

Warren: “I have called on CMS to aggressively increase its audits of private insurers in medicare advantage, and to terminate contracts with those wildly profitable corporations when they are in violation of Medicare law”

Video of Exchange (YouTube)

Washington, D.C. — At a hearing of the U.S. Senate Committee on Finance, U.S. Senator Elizabeth Warren (D-Mass.) questioned Michael Topchik, M.A., executive director for the Chartis Center for Rural Health, on the impact of the Centers for Medicare & Medicaid Services (CMS) newly-finalized minimum staffing rule on quality of care and called out private insurers in Medicare Advantage (MA) for their greedy – and often unlawful – payment practices that threaten to shut down rural hospitals nationwide, blocking seniors from getting the care they need. 

The hearing follows recent letters from Senator Warren to three of the largest public, for-profit nursing homes in the country, highlighting the discrepancy between their opposition to the CMS rule, and the industry’s massive payouts in buyouts, dividends, and salaries to executives and shareholders, totaling almost $650 million dollars since 2018. Mr. Topchik agreed with Senator Warren that CMS’s new minimum staffing rule would increase quality of care in rural nursing homes, and emphasized that rural entities are given ample time and additional flexibility to come into compliance with the rule, given their difficulties with staffing shortages. 

Mr. Topchik also detailed the significant hardships that rural hospitals are facing from the greedy tactics used by private MA insurers, which are putting rural hospitals at  risk of closure. Senator Warren concluded by calling on CMS to conduct more audits of private insurers in MA and to terminate contracts with these insurers when they are found to be in violation of Medicare law. 

Transcript: Rural Health Care: Supporting Lives and Improving Communities
U.S. Senate Committee on Finance
May 16, 2024 

Senator Warren: Thank you, Mr. Chairman. 

Rural health care providers face a slew of challenges: low patient volumes, high operating costs, staffing shortages, and this threatens health care access and quality of care for millions of people in rural communities. 

In April, CMS took a big step to improve quality of care in nursing homes by putting in place minimum staffing standards, including ensuring that facilities have a registered nurse on duty 24/7. 

Mr. Topchik, you are an expert on rural health care needs. So can you tell us, what will this new staffing rule mean for quality of care, particularly at nursing homes in rural communities?

Michael Topchik, M.A., Executive Director, Chartis Center for Rural Health: Senator, I appreciate the question. Just evaluating nursing homes a couple months ago for my father, and was shocked to learn that there was not a nurse on staff 24 hours a day. So, the idea of elevating staffing requirements to better serve our seniors, to provide higher quality care thrills me. 

I do note the tension that the committee noted in, in the final rule by referencing the challenges rural faces, and by offering a five-year ramp in to meet those challenges, as well as a variety of opportunities for waivers, if they happen to be in a health professional shortage area. So I appreciate that. 

Senator Warren: Good. Thank you. 

You know, I think this is a good rule that's going to help millions of nursing home residents. And it's made even stronger by the fact that CMS listened, and they address the concerns of rural nursing home providers. I think that's an important part of it. 

Fortunately, CMS also had the good sense to ignore the biggest nursing home companies' claims that they can't afford to increase staff. Last week, I wrote to three of the biggest publicly traded nursing homes about a new analysis that my office did that found that these homes had paid out over $600 million in stock buybacks, dividends, and CEO pay since 2018, which sounds to me like they actually have the resources to implement this rule. 

Mr. Chairman, I would like to make those letters part of the hearing record.

Chairman Wyden: I’m looking forward to reading it. 

Senator Warren: Okay!

Chairman: So ordered.

Senator Warren: Good. 

So now I want to talk about another health care challenge facing rural communities. 

In just the past decade, over 160 rural hospitals have closed while over half of all rural hospitals are currently operating in the red. Rural hospital operators have identified the same program as the biggest hospitals have. Their threat is– to survival– is Medicare Advantage, or MA, which allows private health insurance companies to administer Medicare coverage for over 31 million Americans. 

Mr. Topchik, do you agree that Medicare Advantage is the biggest threat to rural hospitals? 

Mr. Topchik: Senator, I work with hundreds of Rural Health executives who tell me that it is keeping them up at night. It is one of their single biggest concerns. And I, and I asked them about this. And, and what they tell me is they cite more challenging environment with pre-authorizations. They tell me they cite differing net reimbursements, especially around the critical swing bed program with critical access hospitals. They cite higher rates of denials and delays and reimbursements, and they tell me they're falling behind.

Senator Warren: Right. So, so basically, they delayed payments, they deny payments that boosts profits for Medicare Advantage, and leaves our rural hospitals in the red.

Private insurers in Medicare Advantage are routinely delaying and denying payment to providers, and they make it increasingly difficult for rural hospitals to get reimbursed. 

For example, in 2022, investigation by the Health and Human Services Inspector General found that nearly one in five payment denials by insurers in Medicare Advantage violated Medicare coverage rules. One in five.

And this is particularly devastating for rural hospitals, which rely more on public payers like Medicare. So that's why I've called on CMS to aggressively increase its audits of private insurers in Medicare Advantage and determinate contracts with those wildly profitable corporations when they are in violation of Medicare law.

It is past time that we protect taxpayer dollars and, at the same time, ensure that rural hospitals can stay open for the millions of seniors who rely on them. 

Thank you.