Medicare patients pay far more for outpatient care at critical access hospitals: 7 things to know

Medicare patients' out-of-pocket costs for outpatient care are significantly higher at critical access hospitals than at other acute care hospitals, and the reason for the difference in cost is buried in a 1997 law.

Here are seven things to know about Medicare patients' out-of-pocket costs for outpatient care.

1. According to a Wall Street Journal analysis of Medicare billing records, the copays for Medicare patients who had colonoscopies at critical access hospitals in 2013 averaged $840.22. That's more than three times the average copay of $270.53 at other acute care hospitals.

2. The copays for outpatient hernia surgery at critical access hospitals averaged $1,926.60 in 2013, while copays at other hospitals averaged $562.52.

3. The copays Medicare patients paid for bunion surgery at critical access hospitals averaged $2,272.56 in 2013, while the copays for the same procedure at other hospitals averaged $780.79, according to the Wall Street Journal analysis.

4. The reason Medicare patients' out-of-pocket costs for outpatient care are higher at critical access hospitals is due to the formula used to calculate copays.

5. Under the 1997 law that created the critical access designation, the Medicare copay for outpatient care at critical access hospitals is 20 percent of hospital "charges," according to The Wall Street Journal. At other hospitals, patients only pay 20 percent of the rates Medicare sets for outpatient services, and those rates are typically lower than a critical access hospital's list prices.

6. Although patients pay higher copays for outpatient care at critical access hospitals, those facilities are not getting more money for those services. Instead, patients are picking up a greater portion of the reimbursement the critical access hospitals get from Medicare.

7. Sara Freeman, a research economist at RTI International, told The Wall Street Journal the higher copays for outpatient care at critical access hospitals was an "unintended consequence of the law designed to help rural hospitals." She said it was not an issue initially, but soaring hospital charges have caused the copays to increase over time.

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