Proposed Medicare changes for fiscal 2003 would have only “marginal effects” on provider reimbursement, although hospitals in large urban areas could be hurt, according to a report by Fitch Ratings. The Medicare Payment Advisory Commission, which advises Congress on issues affecting Medicare, has proposed increasing rates for hospitals in large urban areas by 0.55% less than the hospital inflation rate in order to gradually eliminate rate differences between urban and rural providers. One potential problem, however, is that urban hospitals’ supply and labor costs are growing faster than inflation, Fitch said. In addition, hospitals could suffer if national rates are adopted for pass-through payments for outpatient technology costs, according to the credit-rating agency. Higher proposed rates for hospital-based skilled nursing facilities would have a positive effect, but adequate Medicare funding for long-term care would continue to be a challenge, it said.
Fitch: Medicare reimbursement won't change much
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