CMS adopted a proposed clarification in its fiscal year 2011 final inpatient prospective payment system rule that gave Medicare contractors the ability to determine the allowability of CAH provider taxes in cost calculations on a case-by-case basis. Specifically, the contractors will determine if a reduction of the allowable tax expenses is necessary to account for payments providers receive that are associated with the assessed tax. CAHs are reimbursed by Medicare for their costs.
The Rural Hospital Protection Act would continue to allow CAHs to include the full cost of the provider tax in their allowable costs.
The American Hospital Association supports the bill, which it contends would protect the financial sustainability of CAHs, according to the report.
Rep. Graves introduced a similar bill in Oct. 2010, which was not passed before the new 2011 Congress took power.
Read the AHA News Now report on critical access hospitals.
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