Medicare Compliance & Reimbursement

In rural and urban settings alike, smaller hospitals that treat fewer patients than their peers are more likely to be forced into shutting their doors. That's the upshot of a pair of recent analyses from the HHS Office of Inspector General. The reports - "Trends in Rural Hospital Closure: 1990-2000" (OEI 04-02-00610) and "Trends in Urban Hospital Closure: 1990-2000" (OEI 04-02-00611) - combine 11 years' worth of OIG scrutiny of the issue. Significant findings include: 296 urban hospitals and 208 rural hospitals closed since 1990 - 10.6 and 7.8 percent of all urban and rural hospitals, respectively; business decisions (i.e., relocation, consolidation or merger) and low patient census were the top reasons cited for closure by rural facilities; competition and business decisions took the top spots in the urban setting; about 10 percent of both urban and rural hospitals cited low Medicare and Medicaid reimbursement as a reason for shutting down. The reports are available at http://oig.hhs.gov/w-new.html. Lesson Learned: Some hospitals were able to avoid closure by converting to critical access hospital status - a move that typically increases Medicare reimbursement.