Gaming the health care system: MA wins big
Begin quote: WASHINGTON (AP) — An obscure provision tucked into the federal health care law has turned into a jackpot for Massachusetts hospitals, but officials in other states are upset because the money will come from their hospitals.
The Medicare windfall for Massachusetts — $275 million a year — could add up quickly, about $1.4 billion over five years.
“If I could think of a better word than outrageous, I would come up with it,” said Steve Brenton, president of the Wisconsin Hospital Association.
The news was buried in a Medicare regulation issued Monday and comes at a time when hospitals face more cuts under the newly signed federal debt deal.
Even Medicare says it is concerned about “manipulation” of its inpatient payment rules to create big rewards for one state at the expense of others.
Hospitals in 41 states will lose money as a result of the change. The biggest loser: New York, which is out $47.5 million. End quote.
The trick? Get a ritzy Nantuckett hospital classified as rural. Then invoke the obscure trick provision [say “Earmark”] that provides that urban hospitals must be deemed to have labor costs at least as high as rural ones.
Result: MA urban hospitals are paid far more by Medicare than similar hospitals with similar actual costs anywhere else.