Critical access hospitals charge Medicare patients high rates for outpatient care

Critical access hospitals may be a vanishing breed, but it's not because they're charging their patients too little, Kaiser Health News has reported.

A report issued by the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) found Medicare patients treated at critical access facilities are charged anywhere from two to six times more for outpatient care than patients who are treated elsewhere.

Although Medicare patients are required to make a 20 percent copayment for outpatient services rendered in the hospital facility, and the payments are set by Medicare, they tend to be significantly higher at a critical access hospital. Medicare patients receiving an echocardiogram at a critical access facility were charged an average of $33 in 2012--compared to $5 at a hospital that did not have a critical access designation. For an initial vein infusion, patients were charged an average of $56 at a critical access hospital, versus $26 elsewhere.

The patients' financial responsibility is comparatively high because the charges are based on what Medicare pays critical access hospitals. The Medicare program pays those facilities--which are small and geographically isolated--more in order to ensure they remain solvent and operational.

Although the United States has a small number of critical access facilities, they comprise a large majority of the facilities in some rural states, such as Montana, Idaho and North Dakota, according to Kaiser Health News.

Meanwhile, many rural and critical access facilities struggle financially due to low patient volumes. The Centers for Medicare & Medicaid Services (CMS) and the OIG recommended making changes to the critical access designation and funding for the program, but those proposed changes drew heavy criticism.

In the new report, the OIG recommended CMS change the laws governing critical access hospitals so they better reflect the cost of the service being provided.

To learn more:
- read the Kaiser Health News article
- check out the OIG report (.pdf)

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