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Rural Hospital Revenue Opportunities

Rural Hospital Revenue Opportunities. Module 1 – Special Payment Provisions for Hospitals. PPS. RRC. MDH. SCH. CAH. Prospective Payment System. Rural Hospital Challenges Smaller population and market area Disproportionately older population Lower income and higher proverty levels

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Rural Hospital Revenue Opportunities

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  1. Rural Hospital Revenue Opportunities Module 1 – Special Payment Provisions for Hospitals PPS RRC MDH SCH CAH

  2. Prospective Payment System • Rural Hospital Challenges • Smaller population and market area • Disproportionately older population • Lower income and higher proverty levels • Higher unemployment • Higher uninsured population

  3. Special Payment Provisions • Medicare has implemented special payment provisions for small or rural hospitals • Rural Referral Centers • Medicare Dependent Hospitals • Sole Community Hospitals • Critical Access Hospitals

  4. Rural Referral Center A Medicare participating acute care hospital is classified as an RRC if it meets ONE of the following criteria. 1) The hospital is located in a rural area AND has the following number of beds available for use: • Has 275 or more beds during its most recently completed cost reporting period. OR

  5. Rural Referral Center 2) The hospital shows the following three elements: • At least 50 percent of the hospital’s Medicare patients are referred from other hospitals or from physicians who are not on the staff of the hospital • At least 60 percent of the hospital’s Medicare patients live more than 25 miles from the hospital and • At least 60 percent of all services the hospital furnishes to Medicare patients are furnished to patients who live more than 25 miles from the hospital.

  6. Rural Referral Center • A hospital that does not meet the criteria discussed previously can alternatively be classified as an RRC if it is located in a rural area and • Meets minimum discharge criteria AND • Meets minimum case mix criteria AND • More than 50% of the hospital’s medical staff are specialists OR • At least 60% of all discharges are for inpatients who reside more than 25 miles from the hospital OR • At least 40% of all inpatients treated at the hospital are referred from other hospitals from physicians not on the hospital’ staff.

  7. Rural Referral Center • Medicare payment enhancements: • Higher Disproportionate Share Payment adjustment than other rural hospitals, • Exemption from two of three criteria for geographic reclassification: • Proximity to MSA area • 106% average wage requirement • Eligibility to participate in Swing Bed program • RRC with fewer than 100 beds

  8. Medicare Dependent Hospital • A Medicare Dependent Hospital (MDH) is a rural hospital that meets the following criteria: • Has 100 or fewer beds; • Is not also classified as a Sole Community Hospital; and • For at least two of the last three settled cost reporting periods at least 60 percent of its inpatient days or discharges during the hospital’s cost reporting period or periods were attributed to Medicare Part A beneficiaries.

  9. Medicare Dependent Hospital • Medicare Dependent Hospital Payments • For inpatient services receive the sum of the PPS payment amount plus 50% of the amount by which the highest of hospital-specific base year costs per Medicare discharge exceeds the PPS rate • Eligible for volume adjustment payments • Additional DRG payment for transfer cases • Eligible for low-volume hospital adjustments • Eligible to participate in swing bed program. • Not eligible for Disproportionate Share Payments

  10. Sole Community Hospital • A hospital is eligible to be classified as a Sole Community Hospital (SCH) if it is located more than 35 miles from other like hospitals or it is located in a rural area AND meets at least ONE of the following three conditions:

  11. Sole Community Hospital 1) The hospital is located between 25 and 35 miles from other like hospitals • AND meets ONE of the following criteria: • No more than 25 percent of residents who become hospital inpatients or no more than 25 percent of the Medicare beneficiaries who become hospital inpatients in the hospital’s service area are admitted to other like hospitals located within a 35-mile radius of the hospital or, if larger, within its service area • The hospital has fewer than 50 beds and would meet the 25 percent criterion above were it not for the fact that some beneficiaries or residents were forced to seek specialized care outside of the service area due to the unavailability of necessary specialty services at the hospital or • Other like hospitals are inaccessible for at least 30 days in each of two out of three years because of local topography or prolonged severe weather conditions OR

  12. Sole Community Hospital 2) The hospital is located between 15 and 25 miles from other like hospitals but because of local topography or periods of prolonged severe weather conditions, the other like hospitals are inaccessible for at least 30 days in each of two out of three years. OR

  13. Sole Community Hospital • 3) Because of distance, posted speed limits, and predictable weather conditions, the travel time between the hospital and the nearest hospital is at least 45 minutes.

  14. Sole Community Hospital • Receive the highest of four amounts for Medicare inpatient services: • The current PPS rate • Base year costs per discharge from 1982* • Base year costs per discharge from 1987* • Base year costs per discharge from 1996* *costs will be updated to the current year

  15. Sole Community Hospital • Receive up to 12% Disproportionate Share Payment adjustments • SCHs that are also an RRC are not subject to the 12% cap on the DSH adjustment • Does not have to meet proximity requirement for Georgraphic Reclassification • May receive a low volume-adjustment payment due to a decrease in discharges beyond its control • If fewer than 100 beds may be eligible to participate in the swing bed program.

  16. Critical Access Hospitals • A hospital must meet the following criteria to be designated a CAH: • Be located in a state that has established a State Flex Program; • Be located in a rural area; • Provide 24-hour emergency care services, using either on-site or on-call staff; • Provide no more than 25 inpatient beds; • Have an average length of stay of 96 hours or less; and • Be either • more than 35 miles from a hospital or another CAH or more than 15 miles in areas with mountainous terrain or only secondary roads • OR be certified by the State as of December 31, 2005 as being a “necessary provider” of health care services to residents in the area.

  17. Critical Access Hospitals • Medicare payments • Most inpatient and outpatient services are based on 101% of reasonable and allowable costs • May be paid based on cost for ambulance services if the only supplier within 35 miles • Not subject to PPS or APC reimbursement

  18. Critical Access Hospitals • Medicare payments • Not subject to lesser or cost or charges • Not subject to reasonable compensation equivalent limits • Not subject to the 1 day or 3 day preadmission testing rules • May receive 115% of the Fee Schedule payment for professional fees if requested • May participate in Anesthesia pass-through

  19. Critical Access Hospitals • Medicare payments • Professional services in CAH are eligible for HPSA physician incentive payments • Physicians affiliated with CAH may be eligible for Physician Scarcity Area bonus payments • Expanded on-call coverage reimbursement is available to a CAH

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