MEDICARE: HHS Announces New Hospital Rates
Acute care hospitals will see a 0.5% to 0.8% increase in federal Medicare reimbursements in FY 1999, the Department of Health and Human Services announced in a release yesterday. The changes were contained in last year's Balanced Budget Act, which stipulated that rates would be 1.9 percentage points less than the projected inflation in the "market basket" of goods and services purchased by hospitals. The estimated inflation for this category is 2.4%, and so most of the affected hospitals will receive a rate increase of 0.5%. Approximately 360 hospitals, most of which lost money on Medicare patients in recent years, will receive a higher rate increase of 0.8% under the BBA. HHS Secretary Donna Shalala said, "Because of the Balanced Budget Act, the Medicare Trust Fund is guaranteed a decade of solvency. These increases will help assure the 38 million Medicare beneficiaries that they'll have continued access to high quality care." According to HHS, the increase comes on the heels of data from the Medicare Payment Advisory Commission that showed the 15.9% hospital profit margins in FY 1998 were the highest ever recorded under the current pricing system (HHS release, 8/3). Click here to read 1998 HHS press releases.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.