Dive Brief:
- Though Medicare pays extra to support critical access hospitals, many Medicare beneficiaries receiving outpatient treatment at such hospitals pay between two and six times more for outpatient services than patients at other hospitals, according to a report by the HHS Inspector General.
- Patients pay more at critical access hospitals because they're paying 20% of charges, while other Medicare patients pay 20% of whatever Medicare agrees to pay. That amount from non-critical access hospitals is generally lower than what the hospital charges.
- The IG's report recommends that Congress change the law so that Medicare beneficiaries' bills better reflect the cost of the service they received.
Dive Insight:
Since the Medicare Payment Advisory Commission first looked at this issue in 2011, the problem has only grown worse, with patient portions of critical access hospital bills in 2012 hitting 47% of the cost of treatment. That year, Medicare beneficiaries paid about $1.5 billion of the $3.2 billion in outpatient services delivered at critical access hospitals in the US. Some patients' share of the critical access burden is reduced by supplemental insurance policies for the elderly, but one in seven Medicare recipients lack such a policy, researchers note.
When MedPAC originally looked at the problem, advocates for rural hospitals argued that since the law requires critical hospitals be paid their "reasonable" costs plus 1%, the only solution to patient woes would be to make some significant payment policy changes. They contended that either Medicare must change this reimbursement approach or critical access patients should pay less and Medicare pay more to make up for lower patient payments. But to date, nothing in this situation has changed, leaving both critical access hospitals and their patients in a difficult position.