Payment increase would affect most hospitals
Payment increase would affect most hospitals
More than 5,000 acute care hospitals in the United States would receive an increase in their Medicare payments in fiscal year 1999 under a proposed rule expected to be issued in final form sometime after July 8, according to a news release from the U.S. Department of Health and Human Services.
The recommended payment increases, which are authorized under the Balanced Budget Act of 1997 (BBA), would affect all acute care hospitals participating in Medicare. They are contained in a proposed rule published the May 8 Federal Register, with a 60-day public comment period to follow.
Most hospitals will receive a 0.7% increase to the base payment rate, and an estimated 360 acute care hospitals will receive a 1% increase. Those facilities do not receive any other special treatment from Medicare and have lost money on Medicare patients in recent years. The BBA specified a larger increase in payments.
"We encourage the National Association of Healthcare Access Management (NAHAM) membership to support this proposal," says Rosalind Connor, MSM, director of patient access services at Duke University Medical Center in Durham, NC, and a member of NAHAM's strategic planning committee. "Call to support this. It would have a big impact on those of us that participate in Medicare."
Urban hospitals fare better
Medicare pays for most inpatient hospital care through its prospective payment system (PPS), which pays hospitals a predetermined amount for each Medicare discharge based on the patient's diagnosis. Hospitals in large urban areas (cities with more than 1 million people) receive slightly higher payment rates than hospitals in other areas.
The BBA froze hospital payments in fiscal year (FY) 1998 and allowed for an increase in FY 1999 of 1.9%, which is less than the projected growth in the inflation rate on prices for goods and services purchased by hospitals. The FY 1999 inflation rate, also known as the hospital "market basket," is estimated to be 2.6% for PPS hospitals, sole community hospitals, and Medicare-dependent rural hospitals. Therefore, according to the formula included in the BBA, payments will increase by 0.7%.
Under the BBA, the payment rate increase for non-acute hospitals is based on an estimated 2.5% rise in the market basket calculated for these PPS-excluded hospitals. These 3,400 non-acute hospitals and hospital units include psychiatric, rehabilitation, long-term care, cancer, and children's facilities. n
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