(Adds American Hospital Association statement)
WASHINGTON Aug 4 The U.S. government said on
Monday that it will increase the operating payments that
acute-care and long-term care hospitals receive from Medicare
for inpatient care for the federal fiscal year that begins on
The Centers for Medicare and Medicaid Services (CMS)
announced a 1.4 percent rate update for 3,400 acute care
hospitals and a 1.1 percent rate update for 435 long-term care
hospitals for fiscal year 2015.
Under a final rule released on Monday, CMS also said it
would distribute $7.65 billion in payments to hospitals for
uncompensated care, a decrease from the $8.56 billion it
The American Hospital Association said it was disappointed
in the higher-than-expected payment cuts.
"Today's rule will make it more difficult for hospitals to
maintain their commitment to their communities," Linda Fishman,
AHA senior vice president, said in a statement. "These payments
provide vital support to hospitals that serve the most
CMS said the decrease in uncompensated care payments for
Medicare Disproportionate Share Hospitals, or DSH, was due to
lower projected hospital inpatient spending and revised
estimates for the percentage of individuals who are uninsured.
CMS also announced a market basket update of 2.9 percent but
said the rate could vary depending on whether a hospital
participates in government efforts to address quality care
issues and automates its information systems to accommodate
electronic health records. The market basket, a fixed index of
goods and services, reflects the influence of inflation and is
used to update payments and cost limits within Medicare.
CMS said the market basket update would decrease by
one-quarter among hospitals that do not successfully participate
in its quality reporting program or use electronic health
records in a meaningful way.
AHA said some hospitals would continue to be penalized
regardless of their improvement in quality. "The program
negatively affects those hospitals caring for older, sicker
patients," Fishman said.
CMS in April had proposed a 1.3 percent rate increase for
acute care hospitals and projected a market basket update of 2.7
Overall, CMS projected that payments to acute-care hospitals
would decrease by $756 million, while payments to long-term
hospitals would rise by $62 million.
(Reporting by David Morgan in Washington; Additional reporting
by Susan Kelly in Chicago; Editing by Lisa Shumaker)