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News You Can Use: Take a Payment-Woe Break in the Country

Rural facilities see bottom-line relief


Rural hospitals are saved by the bell.
Breathe easy, rural facilities - it's time for an extension on desperately needed reimbursement support. Special add-on payments for these facilities, designed to ensure that they're paid at least as much under the outpatient prospective payment system as they had been paid under the prior cost-based methodology, were set to expire in the new year. An interim final rule issued by CMS Dec. 31 will safeguard these payments for two additional years. The rule also modifies the way Medicare pays for radiopharmaceuticals and drugs and biologicals in the outpatient setting.
To see the rule, go online to .

Act now, small-town hospitals! Higher wages within your reach.
Special appeals for wage index classification are now under way: CMS has announced a one-time- only appeals process for reclassification to geographic areas with a higher Medicare payment index - good news for some rural hospitals that fall just short under the previous criteria.
          
"Hospitals should be given the opportunity to hire the best nurses and other staff without having to worry about them moving to another hospital just over the county line that is able to pay higher wages," says Dennis Smith, acting CMS administrator.
The Medicare reform bill enacted in December set aside $900 million in payments to qualifying hospitals, so rural hospitals should act now to make sure Medicare pays them fairly for labor costs - appeals must be filed by Feb. 15, 2004, according to a Jan. 6 Federal Register notice.      
To see the rule, go online to .
2005 forecast  - what MedPAC says about provider reimbursement futures.
Hospitals will do well if Congress heeds the latest recommendations from the Medicare Payment Advisory Commission (MedPAC). With facilities' overall Medicare margin projected to fall to 1.8 percent in 2004 - even with the payment increases in the new Medicare law - MedPAC voted Jan. 15 to recommend full market-basket updates for hospitals in 2005 under the inpatient and outpatient prospective payment systems. The commission will include its nonbinding recommendations in its March report to Congress.
On Dec. 4, MedPAC issued draft recommendations calling for an inpatient update of market basket minus 0.4 percentage points, and an outpatient update of market basket minus 0.9 percentage points, but they based those recommendations on an erroneous projected 2004 Medicare margin of 2.8 percent for hospitals. The Medicare law already gives you full inpatient and outpatient market-basket updates in 2005, although your facility will lose 0.4 percentage points from your inpatient update if you don't participate in a Medicare quality-data reporting initiative.
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- Published on 2004-02-09