Struggling Rural Mississippi Hospitals Approved for Federal Program

Three endangered Mississippi hospitals will switch to a Medicare payment model that could keep them afloat after the U.S. Centers for Medicare and Medicaid Services approved their applications for the Rural Community Hospital Demonstration program.

Greenwood Leflore Hospital in Greenwood, Magee General Hospital in Magee and the Wayne General Hospital in Waynesboro will participate in the program, which the U.S. Centers for Medicare and Medicaid Services facilitates.

“We’ve worked very hard for years to give these hospitals greater federal support to ensure that they stay open to serve rural Mississippians. It hasn’t been easy, but being part of the Rural Community Hospital Demonstration program will allow them to receive more beneficial reimbursements, which is important to keeping their doors open,” Sen. Cindy Hyde-Smith, R-Mississippi, tweeted on Wednesday.

Hospitals included in the program must be located in a rural area, have fewer than 51 acute care inpatient beds, have 24-hour emergency-care services and not be eligible to be a Critical Access Hospital. CMS also requires participating hospitals to be from any of the 20 states with the lowest population density, which includes Mississippi. Hospitals had to submit requests for information to CMS by March 1 to be considered for the program. 

CMS will evaluate participating hospitals during the program to determine how a cost-based reimbursement program impacts the hospitals financially and affects the health-care outcomes for patients treated at each hospital. The program lasts from May 1, 2025, to June 30, 2028.

Under the cost-based reimbursement model, Medicaid or Medicare pays hospitals the actual amount it costs to provide the services to patients instead of paying a set fee for service.

“For far too long, rural hospitals have operated at a disadvantage, being underfunded, understaffed, and overburdened. This program is a step toward leveling the playing field, giving hospitals the resources they need to provide quality care and remain open,” U.S. House Rep. Bennie Thompson, D-Mississippi, said in an April 23 statement.

Hyde-Smith and colleague U.S. Sen. Roger Wicker, R-Mississippi, penned a letter to the U.S. Center for Medicare and Medicaid Innovation Director Abraham Sutton arguing for Greenwood Leflore Hospital’s participation in the program. 

They wrote in the March 11 letter that Greenwood Leflore is a “critical health resource in the Mississippi Delta” that, in February 2023., decreased its number of hospital beds from 57 to 25 to gain status as a Critical Access Hospital and stabilize its finances. However, CMS denied the hospital’s Critical Access Hospital status because of its proximity to other hospitals.

Greenwood Leflore Hospital currently uses the Medicare Inpatient Prospective Payment System and “struggles financially” because of the system, leading the hospital to cut services and staff. In 2022, the hospital axed its labor and delivery unit, citing an inability to pay competitive wages and retain competitive nurses. 

The City of Greenwood took out a $10 million line of credit to keep the hospital from closing in 2023, and the Mississippi Legislature gave the hospital about $1 million through the Mississippi Hospital Sustainability Grant Program.

“Participation in the RCHD will enable GLH to secure a reasonable-cost basis for inpatient care, reinstate services that have been closed, and staff swing beds to meet the growing need for skilled nursing and rehabilitation care. This additional revenue will stabilize the financial outlook for GLH and ensure quality care continues to be made available to the community,” the senators wrote in a March 11 letter.