Medicare Announces Increase in Payment Rates

     The Centers for Medicare and Medicaid Services recently announced the increase of payment rates in three areas, Rehabilitation Hospitals, Hospital Inpatient Care and Nursing Home Care.  Rehabilitation Hospitals will receive a three percent increase in payment rates in the fiscal year 2003 for rehabilitation care of Medicare beneficiaries recovering from strokes, joint replacements or other conditions requiring extensive therapy.

      A 2.95% payment increase will be given for Inpatient Hospital Care services for the fiscal year 2003.  The increase will begin October 1, 2002 and is slightly higher than originally projected last May.  Medicare pays for most inpatient stay in acute care hospitals based on the methodology and rates established by the inpatient prospective payments system.  The payment rate is based on a beneficiary's diagnosis and the procedure performed.

     Nursing Home payments will increase 2.6% in the 2003 fiscal year for skilled nursing care.  The increase will result in nearly $400 million more in payments and reflects higher rates under Medicare's nursing home prospective payment systems, which covers certain skilled nursing and rehabilitation care for Medicare beneficiaries recovering from serious health problems.

For more information on these topics visit the CMS website at www.cms.hhs.gov .