Profit margins on Medicare inpatient payments vary widely, regardless of whether indirect medical education and disproportionate share payments are taken into account, the Medicare Payment Advisory Commission said in a new report. Major teaching hospitals, which receive indirect medical education payments to offset teaching costs, had an aggregate Medicare inpatient margin of 23.3% in 1999, compared with a 6.5% margin at nonteaching facilities. Hospitals that receive disproportionate share payments for treating large numbers of uninsured and underinsured patients had a 19.6% aggregate inpatient margin, compared with a 6.7% margin among hospitals that don't receive such payments. Margins still varied substantially when disproportionate share and indirect medical education payments were eliminated from the analysis, MedPAC said. Medicare inpatient margins ranged from a low of -18.5% to a high of 20.1% in 1999 without the supplemental payments, a finding that may "suggest the need for payment system changes," MedPAC said in its report. The report will be discussed at MedPAC's meeting tomorrow and Friday in Washington. -- by Jeff Tieman
Medicare inpatient margins vary widely: MedPAC
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