HHS announces expansion of rural hospital demo

The Obama administration on Friday launched the expansion of an experimental program designed to bolster Medicare services in rural parts of the country. 

The program hikes Medicare reimbursements for inpatient services performed at small, rural community hospitals, which say they've lost money on Medicare patients in recent years, discouraging them from treating senior beneficiaries. 

“One in five Americans lives in a rural area, and small community hospitals are often their only source of care," Health and Human Services Secretary Kathleen Sebelius said in a statement announcing the expansion. 

"This demonstration project and other important investments in hospitals, infrastructure, and the health care workforce, will help ensure that Americans living in rural areas can get the quality health services they need."

The program — created as a five-year demonstration under the 2003 Medicare Modernization Act — was expanded in the Democrats' healthcare reform law to include as many as 20 additional facilities. The new law also provided more funding to the 10 hospitals already participating. 

To qualify, facilities must be located in a rural spot, have no more than 50 beds, provide round-the-clock emergency room services, and be too large to qualify for subsidies under the Critical Access Hospital program. 

Qualifying hospitals must also be located in one of the 20 states with the lowest population density, which include Alaska, Arizona, Arkansas, Colorado, Idaho, Iowa, Kansas, Maine, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah and Wyoming.