HHS: Medicare Beneficiaries Paid 47% of Outpatient Costs at Critical Access Hospitals

According to a recent report from the Department of Health and Human Services, in 2012, Medicare beneficiaries paid approximately $1.5 billion of the estimated $3.2 billion cost for critical access hospital outpatient services. According to the report, critical access hospitals provided outpatient services to approximately

2.4 million beneficiaries in 2012. Approximately 681,000 beneficiaries who received outpatient services at critical access hospitals paid an average of more than half of the costs in coinsurance, including 146,000 who paid >75% of the costs in coinsurance.

In addition, the average percentage of costs that beneficiaries paid in coinsurance for these services increased 2 percentage points between 2009 and 201, increasing from 45% in 2009 to 47% in 2012. Also, for 10 frequently provided outpatient services at critical access hospitals, beneficiaries paid between 2 and 6 times the amount in coinsurance that they would have for the same services at acute care hospitals.

The researchers used 2009 and 2012 claims data from the Centers for Medicare & Medicaid Services’ (CMS) National Claims History to calculate the percentages and amounts of coinsurance that Medicare beneficiaries paid toward the costs for outpatient services at critical access hospitals. The researchers also assessed the percentages and amounts of coinsurance that beneficiaries would have paid at acute care hospitals for 10 outpatient services that were frequently provided at critical access hospitals.

Critical access hospitals were created to ensure that rural beneficiaries had access to hospital services. Medicare reimburses critical access hospitals at 101% of their “reasonable costs,” rather than the predetermined rates set by the Outpatient Prospective Payment System.

The report suggested that the CMS seek legislative authority to modify how coinsurance is calculated for outpatient services at critical access hospitals in order to reduce the percentage of costs that Medicare beneficiaries pay in coinsurance. The researchers offered up some remedies for calculating coinsurance, including computing coinsurance so that it is based on interim payment rates rather than charges and processing claims for outpatient services at critical access hospitals as though they were paid under the Outpatient Prospective Payment System in order to calculate an equivalent coinsurance.—Kerri Fitzgerald