CMS extends rural, low-volume hospital payment programs

The Centers for Medicare & Medicaid Services delivered good news to rural hospitals today, announcing it has implemented a one-year extension to a program that pays potentially millions of dollars to rural hospitals with fewer than 100 beds and a large Medicare patient population.

Low-volume hospitals (LVH) also have reason to celebrate, as CMS is extending a payment policy change through fiscal year 2013, as required by the fiscal cliff deal, AHA News Now noted.

Both provisions are retroactive to Oct. 1, 2012.

The LVH payment adjustment ranges from an additional 25 percent for hospitals with 200 or fewer Medicare discharges to no additional payment for hospitals with 1,600 or more Medicare discharges.

CMS projects roughly 600 hospitals will qualify this year as a low-volume hospital, meaning they are more than 15 miles from another comparable hospital and have fewer than 1,600 Medicare discharges a year, according to the notice.

Moreover, under the one-year extension, LVHs should receive about $326 million in additional payments.

Meanwhile, the Medicare Dependent Hospital (MHD) payment extension will increase overall payments 0.2 percent, according to CMS. The industry has about 200 MDHs; the 98 MHDs that will now receive a blended payment will see payments boosted $183 million overall for fiscal 2013.

Thanks to these extensions, New York's Chenango Memorial Hospital will receive $1 million from the MDH program and $800,000 from the LVH program, Sen. Charles E. Schumer (D-N.Y.) announced last month.

However, the funding relief is only temporary: The extended payments expire in one year, meaning rural and low-volume hospitals will struggle with the same budget issues before long, FierceHealthcare previously reported.

For more:
- here's the CMS notice (.pdf)
- read the AHA News Now brief
- check out Schumer's announcement