Hospital margins rose in the first half of fiscal 2002 to a seasonally adjusted average of 4.3% compared with a 3.6% average in the first two quarters of 2001, the Medicare Payment Advisory Commission said. However, MedPAC said, "The increase . . . may not be representative of the increase that will be observed when full fiscal year 2002 data are available." According to a hospital lobbyist, the House Ways and Means Committee requested the margin data to rebut industry arguments that one-third of the nation's hospitals are losing money. Based partially on that claim, the American Hospital Association and other industry groups are pushing for higher Medicare payments. Responding to the MedPAC brief, Federation of American Hospitals President Chip Kahn said, "You can't make policy based on averages." AHA official Carmela Coyle added that the MedPAC brief "is filled with flashing yellow caution lights about the use of quarterly data." Coyle, the AHA's senior vice president of policy, said the association's soon-to-be-released full-year 2001 data indicate hospital margins declined last year from an average of 4.6% in 2000. -- by Jeff Tieman
Hospital margins rise in first half of 2002: MedPAC
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