MEDICARE REMINDS HOSPITALS OF DEADLINE FOR SPECIAL GEOGRAPHIC CLASSIFICATION APPEALS PROCEDURE
The Centers for Medicare & Medicaid Services today reminded acute care hospitals that the deadline is February 15 for taking advantage of a provision in the new Medicare law giving certain hospitals a one-time-only opportunity to appeal for reclassification to a proximate Metropolitan Statistical Area with a higher wage index. A successful appeal could mean higher payments to the hospital under Medicare’s inpatient prospective payment system (IPPS).
CMS published a notice in the January 6 Federal Register, defining the criteria hospitals must meet to be eligible for the appeals process authorized by the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA). In a notice issued today, CMS is clarifying the criteria and making technical corrections to the January notice.
The MMA allocates up to $900 million over three years for increased payments to hospitals that are reclassified under this provision, but limits CMS’s ability to consider appeals to only those filed on or before February 15, 2004. In light of the short time frame allowed by this notice, and the fact that the statutory deadline falls on a Sunday, CMS has made special arrangements to receive applications from hospitals at its Baltimore headquarters on both Saturday and Sunday.
Medicare pays hospitals for inpatient services provided to Medicare beneficiaries under the inpatient prospective payment system. Payment rates under the IPPS are based on the average cost of treating patients with a similar diagnosis. However, the actual amount received by a hospital for a particular case depends on a number of factors, including the geographic area in which the hospital is located. As a general rule, hospitals in urban areas, as defined by the Census Bureau’s Metropolitan Statistical Areas (MSAs) are paid at a higher rate than rural hospitals.
Since 1990, Medicare regulations have made it possible for hospitals meeting certain criteria to request reclassification to another MSA with a higher wage index, and every year since then, several hundred hospitals have been able to avail themselves of this process. The one-time application process is designed to provide a reclassification opportunity for those hospitals that are not able to meet the current requirements for reclassification.
The Notice will be published in the February 13 Federal Register.