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Rural hospitals would get paid more under Medicare and chimeric antigen receptor T-cell (CAR-T) therapies would receive higher reimbursement under proposed payment changes announced by the Centers for Medicare & Medicaid Services (CMS).
Under Medicare’s current hospital reimbursement system, hospitals located in areas with wages less than the national average — which are often those in rural areas — receive a lower Medicare payment rate than hospitals located in areas with wages higher than the national average, the agency noted in a press release issued late Tuesday afternoon. For example, a hospital in a rural community could receive a Medicare payment of about $4,000 for treating a beneficiary admitted for pneumonia, while a hospital in a high-wage area (like many urban communities) could receive a Medicare payment of nearly $6,000 for the same case, due to differences in their wage index.
“That’s a large spread and creates serious challenges for rural and low-wage hospitals, and their viability,” CMS administrator Seema Verma said on a phone call with reporters early Tuesday evening. She noted that nearly 40% of hospitals are currently operating with negative margins, and that many rural communities have higher poverty rates and a higher prevalence of chronic conditions than their urban counterparts. In addition, “people are having to travel a lot further to see a doctor and often face a fragmented healthcare delivery system with an overworked and shrinking workforce.”