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HEHS-00-174R 1 (2000-09-15)

handle is hein.gao/gaobaallx0001 and id is 1 raw text is: G Accountability * integrity * Reliability United States General Accounting Office Health, Education, and Washington, DC 20548 Human Services Division B-285973 September 15, 2000 The Honorable William B. Thomas Chairman, Subcommittee on Health Committee on Ways and Means House of Representatives Subject: Medicare Hospital Payment: PPS Includes Several Policies Intended to Help Rural Hospitals Dear Mr. Chairman: Since the inception of Medicare's prospective payment system (PPS) for inpatient hospital services in 1983, many special payment provisions have been enacted to adjust Medicare payments to rural hospitals. Despite these provisions, rural hospitals on average have not fared as well under PPS as have their urban counterparts. In 1998, an estimated 40 percent of rural hospitals incurred losses on their Medicare inpatient business. This has raised questions about existing policies for rural hospitals under PPS. This letter responds to your request for information on the scope and efficacy of Medicare's existing rural hospital inpatient payment policies. Specifically, you asked us to inventory the major special payment provisions available to rural hospitals under PPS and to provide information on the inpatient financial performance of these hospitals under PPS.' For this work, we reviewed current and past federal regulations and Health Care Financing Administration (HCFA) program manuals and memorandums on Medicare payment rules. We also interviewed officials from HCFA and the Medicare Geographic Classification Review Board (MGCRB). We estimated the number of rural hospitals using HCFA's fiscal year 2000 PPS Impact File. We performed this work in accordance with generally accepted government auditing standards between June and August 2000. 'We confined our analyses to payment policies for inpatient services under PPS. Hospitals may receive Medicare payments for other services, such as outpatient services, skilled nursing facility care, and home health care. GAO/HEHS-00-174R Medicare's Rural Hospital Payment Policies

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