Ownership Status of Inpatient Prospective Payment System Hospitals That Qualify for Payment Adjustments

GAO-13-667R: Published: Jun 27, 2013. Publicly Released: Jul 29, 2013.

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What GAO Found

GAO previously reported that, in 2012, upward payment adjustments affected the vast majority of hospitals paid under Medicare's inpatient prospective system (IPPS). (See GAO-13-334). For this report, GAO found that, of the 3,455 IPPS hospitals in the prior review, the proportion of hospitals qualifying for at least one of four categories of payment adjustments was higher among nonprofit and government hospitals than among for-profit hospitals. On average, 97 percent of government-owned hospitals and 90 percent of nonprofit hospitals received at least one form of increased payment in 2012. In contrast, 80 percent of for-profit hospitals qualified for at least one category of payment adjustment that year. In addition, for-profit hospitals were more likely to receive no, or only one form of, additional payment, whereas government-owned and nonprofit hospitals were more likely to receive two or three forms of additional payment.

Why GAO Did This Study

Under the IPPS, Medicare pays hospitals a flat fee per stay, set in advance, with different amounts for each type of health care condition. Yet, Congress can enhance Medicare payments to certain hospitals by changing the qualifying criteria for IPPS payment categories, creating and extending exceptions to IPPS rules, or by exempting certain types of hospitals from the IPPS. In April 2013, GAO reported on the extent to which hospitals qualified for adjustments to, or exemptions from, the IPPS in 2012. This report provides information about the ownership status of the IPPS hospitals included in our April review, particularly those hospitals qualifying for payment adjustments in 2012. The Department of Health and Human Services reviewed a draft of this report and provided technical comments, which we incorporated as appropriate.

For more information, contact James Cosgrove at (202) 512-7114 or

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