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Advising the Congress on Medicare issues
MedPAC > Recommendations > Updating and reforming prospective payment for hospital inpatient care (C)

Updating and reforming prospective payment for hospital inpatient care (C)

March 1, 1999

For Medicare’s disproportionate share payments: The Congress should require that disproportionate share payments be distributed according to each hospital’s share of low-income patient costs, defined broadly to include all care to the poor. The measure of low-income costs should reflect:
* Medicare patients eligible for Supplemental Security Income, Medicaid patients, patients sponsored by other indigent care programs, and uninsured and underinsured patients as represented by uncompensated care (both charity care and bad debts).
* Services provided in both inpatient and outpatient settings.
As under current policy, disproportionate share payment should be made in the form of an adjustment to the per-case payment rate. In this way, the total payment each hospital receives will reflect its volume of Medicare patients.

Topics: Hospital.