CMS Extends Payment Programs for Rural and Low-Volume Hospitals

Rural and low volume hospitals will be experiencing a bit of good fortune in the coming months – this is because the Centers for Medicare and Medicaid Services have recently announced an extension to provisions which provide supplemental payment to hospitals which have fewer than 100 beds and a high volume of Medicare patients. The effects of these provisions are retroactive to October 1, 2012.

These policy extensions come as part of the deal which allowed the federal government to sidestep the fiscal cliff; The American Taxpayer Relief Act includes payment policy extensions for rural and low-volume hospitals. All told, revenue for these types of institutions may increase by millions of dollars.

Payment Extension Details

In the case of low volume hospitals, payment adjustments fall within certain ranges – for hospitals with 200 or less yearly Medicare discharges, payments will be augmented by 25 percent. But for those hospitals which fall above the 1,600 Medicare discharge per year mark, no further compensation will be made available.

Nationally, it’s estimated that approximately 600 hospitals qualify for low volume status. The specific qualifiers for this designation include being outside a 15 mile range of a comparable facility as well as reporting fewer than 1,600 Medicare discharges per year. It’s estimated that collectively, these 600 hospitals should qualify for $326 million in additional compensation in the coming year.

Although these payment policy extensions come as good news to smaller facilities looking to keep their doors open, it should be noted that they are only guaranteed to be around for the remainder of the year.

Though the American Taxpayer Relief Act has provided relief for rural and low volume hospitals, it has left many public hospitals frustrated with Medicare payment structure. Because not all appendages of the healthcare system stand to benefit under the current legislation, it’s debatable whether the net effects of these provisions are in fact positive.