Becker's Healthcare August 16, 2021
CMS pays new hospitals three times more for capital costs than it pays established hospitals, according to an Aug. 16 report from HHS’ Office of the Inspector General.
Under current Medicare regulations, established hospitals are reimbursed for capital costs through the Inpatient Prospective Payment System. However, new hospitals are exempt from the payment methodology for capital costs and are instead paid on a cost reimbursement basis for the first two years of operation. The rationale for the exemption is that new hospitals may not have adequate Medicare utilization in the first two years and may have incurred significant startup costs.
For its analysis, the OIG analyzed the capital costs that were paid to 112 new hospitals from fiscal year...
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