Medicare prepares to boost reimbursement, but not for HMEs

Sunday, February 1, 2004

February 2 , 2004

WASHINGTON - While the HME industry lays plans to combat deep reimbursement cuts imposed by the Medicare Prescription Drug Act, other providers are preparing to pocket the bill’s largesse.

As a result of the drug act, two policies went into effect last month that will boost payments to 863 critical access hospitals by $900 million over the next 10 years. Critical access hospitals are limited-service hospitals located in rural areas that receive cost-based reimbursement.

Also last month CMS issued a proposed rule that would increase the Medicare payment rates for long-term care hospitals by 2.9% starting July 1, 2004. Medicare expects aggregate payments to these hospitals to increase to $2.33 billion during the 2005. Long-term care hospitals, in general, are defined as hospitals that have an average Medicare inpatient length of stay greater than 25 days.

Because of the bill, increased payments to Medicare Advantage, formerly known as Medicare+Choice, will increase by average 10.6% beginning March 1.