Fierce Health Payers August 18, 2021
Medicare has been paying new hospitals three times the amount these facilities would have received if their capital costs were handled through the standard Inpatient Prospective Payment System (IPPS), according to a recent Office of Inspector General audit.
Over a nine-year study period, the program paid 112 new facilities an extra $283 million, about $1.3 million each, to cover their one-time startup cost—despite the fact that more than half were part of chain organizations that could have capital reserves in place to cover those costs, OIG wrote (PDF).
The payments come from an exemption to Medicare’s IPPS established in the early 1990s that allows hospitals in their first two years of operation to be paid 85% of their Medicare-related capital...
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