Rural hospital draws $1.8 million in annual Medicare reimbursements through status change

Client background 

A hospital that provides inpatient and outpatient care to a rural community of 41,000 people. It employs 400 individuals and has 42 inpatient beds with more than 9,500 emergency room visits annually. 

The business challenge 

The hospital was only receiving the base inpatient Medicare payment and did not qualify for Medicare disproportionate share hospital (DSH) reimbursements. In addition, although the hospital provides services to a rural community, it did not appear to qualify for a special rural designation status. This included being classified as a Sole Community Hospital, Medicare Dependent Hospital, Rural Referral Hospital or Critical Access Hospital.  

The Baker Tilly approach 

Baker Tilly found that the hospital was underreporting Medicare shadow bills due to a billing system conversion error. Furthermore, the hospital was not receiving Medicare DSH reimbursements or indirect medical education (IME)/graduate medical education (GME) payments. Because of this, Baker Tilly identified that the hospital could include eligible Medicare patient days in meeting the 60% Medicare utilization that qualifies a provider as a Medicare Dependent Hospital. 

The business impact 

Once Baker Tilly discovered that the hospital could include additional eligible Medicare patient days to its Medicare utilization rate, the company was approved to be a Medicare Dependent Hospital. This special designation status provided the hospital with an additional $1.8 million in annual Medicare inpatient reimbursements. 

For more information on this topic, or to learn how Baker Tilly’s Value Architects™ can help with special hospital designations, contact us now.