Hospitals Basics of Cost-Based Reimbursement

Hospitals Basics of Cost-Based Reimbursement

Objective of the discussion: To gain a high-levelunderstanding of cost-based reimbursement forCAHs and it’s impact on financial reportingDiscussion agenda:• Provide understanding of differences in Medicarehospital reimbursement methods• Understand how CAHs get paid - (Interim ratesvs. final settlement)• Understand the impact of cost-basedreimbursement on financial statement reporting Basics of Cost-Based Reimbursement for CriticalAccess Hospitals (CAHs)

Medicare reimbursement depends on the servicesprovided:Inpatient and swing bed services:• Based on 101% of average cost per day forinpatient services (as computed in the Medicarecost report):◦ Paid on an interim basis using a per diem rate for routine and ancillary costs◦ Final settlement for each fiscal year is based on the filed Medicare costreport after the intermediarycompletes their audit