The CMS issued notifications equalizing the base payment for rural and urban hospitals, establishing new thresholds for outlier reimbursement and disproportionate share payments, and estimating the increase in Medicare Advantage capitation rates for 2005. The notifications carry out provisions of the Medicare Modernization Act. As of April 1, a case must cost $30,150 more than the standard DRG payment to qualify for outlier reimbursement, down slightly from the $31,000 in effect before April 1. Also as of April 1, rural and urban hospitals with fewer than 100 beds will be eligible for disproportionate share payments if 15% of their patients are poor. The disproportionate share formula for larger hospitals doesn't change. The CMS estimated that capitation rates to health plans in Medicare Advantage, which replaces the Medicare+Choice program, would increase 6.6% in 2005. The agency also said it is phasing in a new risk-adjustment methodology to increase payments to plans caring for the sickest beneficiaries. The process will be complete in 2007. -- by Jeff Tieman
CMS carries out elements of Medicare reform bill
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