Study: Medicare's additional $3B to rural hospitals unnecessary

The $3 billion a year in special payments Medicare pays to rural healthcare providers might not be necessary, concludes a Health Affairs study

The findings come after researchers debunked the assumption that rural beneficiaries receive less care than urban beneficiaries. Rather, researchers found that the region the Medicare beneficiary lives in--not whether he or she lives in an urban or rural area--has more of an effect on the use of services, according to a Health Affairs blog post

Jeffrey Stensland, principal policy analyst at the Medicare Payment Advisory Commission in Washington, D.C., and colleagues looked at claims data from all Medicare fee-for-service beneficiaries to compare the use of medical services by urban and rural areas. They found that there was no significant difference in either the amount of healthcare or the satisfaction with access to care between rural and urban patients, Health Affairs reported. In addition, rates of use of service were almost identical.  

"The key policy implication of this article is that Medicare should not use rural location as a proxy for low service use or access to care," the authors concluded. "Policies that implicitly assume all rural areas are homogeneous and all rural beneficiaries are underserved are not supported by the data."

Earlier this year, the Centers for Medicare & Medicaid Services 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. These low-volume hospitals, which are more than 15 miles from another comparable hospital and have fewer than 1,600 Medicare discharges a year, could receive about $326 million in additional payments, FierceHealthcare previously reported.

To learn more:
- read the Health Affairs blog post
- here's the study

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