Higher Medicare Payments Planned
Tenet Healthcare Corp., California’s largest hospital chain, and other hospital operators would receive $5 billion more in payments in the year starting Oct. 1 for patients enrolled in Medicare under a proposed rate increase announced Tuesday.
Urban hospitals would get an average 4.7% increase and rural hospitals would get an increase of 6%, according to a statement by the U.S. agency that oversees Medicare, the health insurance program for the elderly and disabled.
The proposed change for acute-care hospitals involving inpatient services marks only the third time in 21 years that hospitals would get an increase that fully accounts for inflation as calculated by a government formula, currently estimated at 3.3%.
Total spending for the reimbursements would rise to about $105 billion in 2005 from an estimated $100 billion the agency probably will pay for inpatient care this fiscal year, which ends Sept. 30.
“The bottom line, particularly for rural hospitals, is significant increases in hospital payment rates,” Mark McClellan, administrator of the Centers for Medicare and Medicaid Services, said in the statement. “And the bottom line for Medicare beneficiaries, whether in urban or rural areas, is better access to high-quality inpatient care.”
Shares of Nashville-based HCA Inc., the biggest U.S. hospital chain, rose 35 cents to $39.90, while No. 2 Tenet, based in Santa Barbara, rose 26 cents to $12. Shares of Naples, Fla.-based Health Management Associates Inc., the biggest rural chain, rose 29 cents to $22.55. All three trade on the New York Stock Exchange.
Congress usually enacts legislation requiring Medicare to pay less than the so-called market-basket index that tracks hospital costs. The rate increase to start Oct. 1 includes the inflation update and other payment increases contained in last year’s legislation overhauling Medicare.
The proposal is on display at the office of the Federal Register and will be published in the May 18 Federal Register, the statement said.
