A suit challenging the constitutionality of low Medicare reimbursement to rural hospitals - including 18 Utah hospitals - has been filed against the Department of Health and Human Services by the National Rural Health Association.

The Utah Department of Health, an association member organization, supports the suit that seeks to increase Medicare payments to rural hospitals facing severe financial ailments."Rural Utah has a much higher proportion of older people than the state as a whole," said Dr. J. Brett Lazar, director of the Division of Community Health Services. "Our rural hospitals are much more dependent on Medicare payments than are Wasatch Front hospitals."

Said Lazar, "The future of Utah's rural hospitals is already questionable given economic hardships such as personnel shortages, competition, and market forces. We want to maintain access to health care in rural areas, especially for senior citizens, since they are often less mobile and do not always have health care options other than their rural hospitals."

Lazar said nationwide, under Medicare's Prospective Payment System, urban hospitals have received payments averaging 39.6 percent more than payments received by rural hospitals.

The association contends that most urban hospitals profit from delivering Medicare services, while most rural hospitals lose money from Medicare patients.

But urban hospital officials aren't buying that argument. They maintain that 40 percent of all U.S. hospitals, including most urban ones, will lose money on Medicare reimbursements this year.

Gary Farnes, LDS Hospital administrator, said if his early budget projections are correct, LDS Hospital alone will have to absorb $23 million in the Medicare/Medicaid program.

"Every year we have just let them (federal government) pay what they will, and they have cut back further and further what they pay as compared to what our charges are," Farnes said. "No longer can we roll over and play dead. Most hospitals today are living with what we consider a bare bones bottom line."

The American Hospital Association predicts that 700 of the nation's hospitals will be forced to close within just a few years because of financial pressures stemming from inadequate Medicare reimbursement.

Farnes said in 1987 alone, the rate of inflation for medical goods and services was 5 percent, but reimbursements to hospitals increased from the previous year by only 1 percent.

To combat the problem, the Utah Hospital Association, in cooperation with the American Hospital Association, has instigated a full-scale advocacy campaign, "Resolve to Protect Medicare."

Ronald L. Bouck, director of communications and education, said nearly 2,000 signatures were collected locally and delivered to Utah's five congressional representatives, encouraging them to maintain adequate levels of Medicare funding.

The Utah Hospital Association this year also introduced a joint resolution in the Legislature, urging Utah lawmakers to lobbgy against the reduction of payments to Medicare providers belows the current law's level for fiscal 1990. That resolution, which passed both the Senate and House, was delivered to Rep. Jim Hansen, R-Utah.

"In the resolution, we indicated that each year since fiscal year 1982 resulted in a loss of $90 million dollars that was available to Beehive State Medicade recipients," Bouck said.

The National Rural Health Association went one step further.

The legal action addresses a 1946 federal act requiring many rural hospitals to accept all Medicare patients in exchange for grants and loans to build or remodel facilities. The suit charges that these hospitals must, therefore, be reimbursed at their reasonable costs or receive credits for uncompensated care.

Utah hospitals affected by suit (fewer than 100 beds) Allen Memorial Hospital,Moab

Ashley Valley Medical Center, Vernal

Bear River Valley Hospital, Tremonton

Beaver Valley Hospital, Beaver

Central Valley Vedical Center, Nephi

Delta Community Medical Center

Duchesne County Hospital, Roosevelt

Fillmore Medical Center

Garfield Memorial Hospital, Panguitch

Gunnison Valley Hospital

Kane County Hospital, Kanab

Milford Valley Memorial Hospital

Monument Valley Hospital

San Juan County Hospital, Monticello

Sanpete Valley Hospital, Mt. Pleasant

Sevier Valley Hospital, Richfield

Tooele Valley Hosplital

Wasatch County Hospital, Heber City