CMS gives rural and small urban hospitals a financial boost

Twitter icon
Facebook icon
LinkedIn icon
e-mail icon
Google icon

Beginning today, the Centers for Medicare & Medicaid Services (CMS) will implement several provisions of a new Medicare law that increases payment rates for rural and urban hospitals in areas with less than 1 million people.

Provisions within the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) will increase payments to the qualified facilities approximately $12 billion over the next 10 years. In addition, the outlier threshold for all hospitals to be eligible for extra payments for unusually costly cases will decrease from $31,000 to $30,150.

The CMS says rural hospitals and urban hospitals with less than 100 beds, in addition to other hospital types, that serve a disproportionate share of low-income Medicare and Medicaid patients will receive a boost in their disproportionate share hospital (DSH) payments beginning with discharges on or after April 1.

As provided in the new Medicare law, the cap on DSH payment adjustments will increase from 5.25 percent to 12 percent for urban hospitals fewer than 100 beds, sole community hospitals, and rural hospitals with fewer than 500 beds. There is no cap on rural referral centers, large urban hospitals over 100 beds, or rural hospitals over 500 beds.