Tuesday, April 30, 2019

Medicare plans reimbursement boost for low-wage rural hospitals; urban hospitals, which would lose, likely to fight

The federal government plans to increase Medicare reimbursements by about $4.7 billion in fiscal year 2020 to help struggling rural hospitals. That's an overall increase of about 3.2 percent.

Starting in October, the Centers for Medicare and Medicaid Services "wants to raise the index for low-wage hospitals at the expense of decreasing it for high-wage hospitals," Robert King and Alex Kacik report for Modern Healthcare. "The goal is to help close a wide payment disparity that some advocates say is fueling the rash of rural hospital closures."

The proposal is part of a larger overhaul to the CMS inpatient prospective-payment system, which also includes measures to allow add-on payments for newly approved medical devices that are significantly better than the ones already on the market. "Still, rural hospitals are worried about how the change will affect them, and if it will be enough," King and Kacik report. The proposed rule doesn't impact rural critical-access hospitals or health clinics that are also financially struggling.

The wealthiest urban hospitals, which could see a reduction of as much as 5% in their reimbursements, are likely to fight the proposed change, King and Kacik report.

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