Small rural hospitals gain reasonable-cost payments for lab tests

Many provisions in the Patient Protection and Affordable Care Act (PPACA) take money away from hospitals rather than boosting funding. However, section 3122 of the PPACA extends reasonable-cost payments for clinical lab tests performed by hospitals with fewer than 50 beds in qualified rural areas as part of their outpatient services for cost reporting periods beginning on or after July 1, 2010, through June 30, 2011, according to Transmittal 1940 (change request 6873) from the Centers for Medicare and Medicaid Services.

This could impact services performed as late as June 30, 2012, for some hospitals. Hospitals that qualify for reimbursement under section 3122 don't need to take action. "You will receive reasonable cost reimbursement for an entire year, starting with your cost reporting period beginning on or after July 1, 2010," said CMS in a recent email to providers.

In other positive news, section 3121 of the PPACA extended the Outpatient Hold Harmless provision for rural hospitals with 100 or fewer beds, and to all sole community hospitals and Essential Access Community Hospitals regardless of bed size. The extension is effective for dates of service on and after Jan. 1, 2010, through Dec. 31, 2010. CMS urged providers to "be on the alert" for implementation information related to this and other provisions in the PPACA.

To learn more about the reasonable-cost extension:
- read Transmittal 1940
- monitor pending PPACA changes at the CMS Hospital Center

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