Medicare Compliance & Reimbursement

Reform bill ushers in $12 billion over the next decade.
Financially struggling hospitals in rural areas and urban sites that serve a population of fewer than 1 million got a morale boost from the Centers for Medicare & Medicaid Services March 31.
 
Starting with discharges on or after April 1, 2004, the Medicare reform bill will officially be walking the walk when it comes to improved disproportionate share reimbursement. CMS announced that $12 billion has been earmarked for better pay over the next ten years, effectively decreasing the outlier threshold for extra payments in unusually costly cases from $31,000 to $30,150.

The provisions in the new Medicare law also lift the cap on DSH payment adjustments from 5.25 percent to 12 percent for urban hospitals with fewer than 100 beds, sole community hospitals, and rural hospitals with fewer than 500 beds.

More good news: CMS has made permanent a single standardized amount to be used in determining Medicare payments to all hospitals -- not the previous two-tiered system that favored hospitals in large urban areas.

Lesson Learned:  Rural and small urban hospitals should soon begin to feel the effects of better payment rates.