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Impact of Medicare disproportionate share hospital payment cap on rural and urban hospitals
Impact of Medicare disproportionate share hospital payment cap on rural and urban hospitals
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Rural policy brief
- Author(s):
- Weigel, Paula, author
Ullrich, Fred, author
Mueller, Keith J., author - Contributor(s):
- RUPRI Center for Rural Health Policy Analysis, issuing body.
Rural Health Research & Policy Centers, issuing body.
Rural Policy Research Institute (U.S.), issuing body. - Publication:
- Iowa City, IA : Rural Policy Research Institute, December 2019
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Capitation Fee
Hospitals, Rural -- economics
Hospitals, Urban -- economics
Medicare -- economics
Reimbursement, Disproportionate Share
United States - Genre(s):
- Technical Report
- Abstract:
- Purpose. This brief describes the number and location of urban and rural hospitals affected by a 12 percent cap on their payments from the Medicare Disproportionate Share Hospital (DSH) program. We also analyze the impact of lost revenue (defined as DSH payment amounts exceeding the 12 percent cap) as a percentage of affected hospitals' overall inpatient revenue. The cap was established in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Given that DSH payments are now (beginning in FY2014) limited to 25 percent of the total DSH burden (per the 2010 Patient Protection and Affordable Care Act), revisiting the cap may be a way to help address the fiscal plight of rural hospitals with minimal cost to the Medicare program. Key Findings. (1) Of the 4,460 hospitals qualifying (all inpatient prospective payment system [IPPS], nonfederal hospitals) for Medicare DSH payments in 2017, 2,146 hospitals met location and bed size criteria for the 12 percent payment cap. Of these, 1,430 were urban hospitals and 716 were rural hospitals. (2) Of the total 2,146 hospitals that met the location and bed size criteria for the cap, 279 (13 percent) were affected by the cap because they had operating DSH percentages exceeding 12 percent. Of these, 88 (32 percent) were urban and 191(68 percent) were rural. (3) Among capped hospitals (those hospitals whose operating DSH percentages exceeded the 12 percent cap), rural hospitals lost a higher average amount than urban hospitals as a result of the cap. The average DSH payment amount lost among rural hospitals due to the 12 percent cap was $130,636; for urban hospitals, the amount was $118,596. (4) Rural hospitals lost a higher average percentage of total inpatient revenue than urban hospitals. As a fraction of total inpatient revenue, the average DSH percentage lost among capped rural hospitals was 3.1 percent; for urban hospitals, it was 1.6 percent.
- Copyright:
- The National Library of Medicine believes this item to be in the public domain. (More information)
- Extent:
- 1 online resource (1 PDF file (5 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 101771073 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/101771073