Hospitals That Do Not Charge

A3-3660.5 

Participating hospitals that do not charge individuals and also meet the exceptions to the law that normally exclude payment for expenses paid for directly or indirectly by a governmental entity, may be reimbursed the reasonable cost of furnishing covered services to Medicare beneficiaries. The following special procedures apply to their bills. 

Computing Medicare Billing Rate 

The Medicare billing rate per day is determined by the following equation:

Total allowable inpatient cost = cost per day per patient

Total inpatient days

Thus, the billing rate that appears is the average inpatient cost per day per inpatient as calculated from entries on the latest cost settlement report approved by Medicare. Where this is the provider's first year in the program, the A/B MAC (A) determines this rate based on the provider's books and records the appropriate billing rate for services rendered to Medicare beneficiaries.

Computing Medicare Billing Rate (Inpatient) 

The Medicare billing rate is determined in the following manner:

Total available inpatient cost = Cost per day per patient

Total inpatient days 

The A/B MAC (A) multiplies the cost per day per patient by 93 percent for short-term hospitals and by 98 percent for long-term hospitals.  Then it applies the following fixed percentages. The result is the Medicare billing rate.  

Computing Medicare Billing Rate (Outpatient) 

The Medicare billing rate is determined by the following equation: 

Total allowable outpatient cost = average cost per visit 

Total visits (occasions of service)

Thus, the billing rate is the average cost per outpatient visit as calculated from entries on the latest cost settlement report approved by Medicare. Where this is the provider's first year in the program, the A/B MAC (A) determines this rate based on the provider's books and records the appropriate billing rate for services rendered to Medicare beneficiaries.