March 1, 2011

Congressman Mike Michaud announced that four hospitals in Maine are now eligible to participate in the Centers for Medicare and Medicaid Services’ (CMS) Rural Community Hospital Demonstration Program, which provides reimbursements to small rural hospitals that better reflect the true cost of providing care to Medicare beneficiaries. CMS has selected Inland Hospital in Waterville, Maine Coast Memorial Hospital in Ellsworth, Franklin Memorial Hospital in Farmington, and Miles Memorial Hospital in Damariscotta to participate in the program. A total of 19 hospitals were selected to participate in the demonstration in Colorado, Iowa, Kansas, Maine, Mississippi, and New Mexico.

“This program will help ensure that these hospitals are able to continue providing quality health care services to Mainers,” said Michaud. “It will provide crucial funding to our small hospitals that are struggling under the current Medicare reimbursement formula.”

The Rural Community Hospital Demonstration Program was originally authorized in 2003 in response to the financial concerns of small, rural hospitals that are too large to qualify as Critical Access Hospitals. Ten states with the lowest population density were originally selected to participate in the program. At the time, Maine was not eligible to participate. The Affordable Care Act reauthorized the program for an additional five years, allowing the 20 most rural states to participate, including Maine. Michaud advocated including these changes to the program in the Affordable Care Act, which was signed into law in March of last year.

According to CMS, the demonstration is designed to test the feasibility and advisability of reasonable cost reimbursement for inpatient services to small rural hospitals. The demonstration is aimed at increasing the capability of the selected rural hospitals to meet the needs of their service areas. To accomplish the goals of improved efficiency and clinical outcomes, hospitals in the demonstration are being asked to participate in initiatives that will enhance efficiency and quality as a condition of participation.