Becker's Hospital Review

42 Financial Management the growing Bottom Line: 16 statistics on Profits by Hospital Bed Count By Bob Herman C ommunity hospitals amassed sizable profits in 2012 despite the variable healthcare environment, and the bottom lines at the largest hospitals were in the tens of millions of dollars. According to the American Hospital Associa- tion's 2014 edition of AHA Hospital Statistics, the 4,999 U.S. community hospitals posted $64.4 billion in cumulative profits in 2012 — a 21 percent increase from 2011. The largest community hospitals, or those with 500 or more beds, had an average profit of $67.8 million in 2012. Hospitals with more than 300 beds collected more than $30 million in earnings, on average. Critical access hos- pitals and small rural hospitals posted more modest profit figures, ranging from $1.3 mil- lion to $5.3 million. Here are 16 statistics on hospital profits, sorted by hospital bed count. Note: Average profit per hospital figures are means, not medians. Cumulative profit in 2012 Hospitals with 6 to 24 beds: $587.6 million Hospitals with 25 to 49 beds: $2.8 billion Hospitals with 50 to 99 beds: $5.1 billion Hospitals with 100 to 199 beds: $11.1 billion Hospitals with 200 to 299 beds: $9.7 billion Hospitals with 300 to 399 beds: $10.5 billion Hospitals with 400 to 499 beds: $6.2 billion Hospitals with 500 or more beds: $18.4 billion Average profit per hospital in 2012 Hospitals with 6 to 24 beds: $1.3 million Hospitals with 25 to 49 beds: $2.3 million Hospitals with 50 to 99 beds: $5.3 million Hospitals with 100 to 199 beds: $11 million Hospitals with 200 to 299 beds: $17 million Hospitals with 300 to 399 beds: $30.2 million Hospitals with 400 to 499 beds: $32.8 million Hospitals with 500 or more beds: $67.8 mil- lion n CMS Extends Transparency Movement to Physician Payment By Bob Herman H HS and CMS will evaluate Freedom of Information Act, or FOIA, requests on a case-by-case basis for individual Medicare payments made to physicians. In a 1980 policy decision, HHS previously said that "considering the two competing interests of public transparency and privacy," Medicare physician data could not be provided through FOIA requests. The judgment was based on two court rulings that said physician privacy trumped the public release of their Medicare data. Last year, one of the district courts involved in the issue vacated its ruling. HHS and CMS then asked for public comment last August, receiving letters from more than 300 healthcare organizations and individuals. Ultimately, the federal government said providing Medicare physician reimbursement data to the public in certain situations could benefit the healthcare system. For example, providers could look at the data to find areas to root out waste, while patients and journalists could identify areas of high quality or poor performance. "As CMS makes a determination about how and when to disclose any information on a physician's Medicare payment, we intend to consider the importance of protecting physicians' privacy and ensur- ing the accuracy of any data released as well as appropriate protections to limit potential misuse of the information," CMS Principal Deputy Administrator Jonathan Blum wrote in a blog post. "And as always, we are committed to protecting the privacy of Medicare beneficiaries." The decision comes after HHS and CMS released troves of hospital charge data last year on the 100 most common inpatient services and the 30 most common outpatient services. n AHA: Hospital Medicare, Medicaid Payments Cut by $113B Since 2010 By Helen Adamopoulos T he 10-year impact of regulatory actions on hospital payments since 2010 will involve an es- timated $113 billion reduction in Medicare and Medicaid reimbursement, according to the American Hospital Association. The AHA assessment — which excludes payment reductions included in the Patient Protection and Affordable Care Act — shows sequestration will lead to $53.8 billion in cuts, factoring in the two-year extension of sequestration cuts enacted by the Bipartisan Budget Act of 2013. Additionally, according to the AHA graphic, hospitals will lose $2.1 billion to bad debt as a result of the Middle Class Tax Relief and Job Creation Act of 2012 and $12.2 billion to Medicaid disproportionate share hospital payment cuts included in the Middle Class Tax Relief and Job Creation Act of 2012, the American Taxpayer Relief Act of 2012 and the Bipartisan Budget Act of 2013. The three-day window provision in the Preservation of Access to Care for Medicare Beneficiaries and Pen- sion Relief Act of 2010 will lead to a $4.2 billion payment reduction for hospitals. The three-day Medicare payment window applies to outpatient services that hospitals and hospitals' wholly owned or wholly operated Medicare Part B entities provide to Medicare beneficiaries. It requires providers to bundle the technical component of all outpatient diagnostic and related non-diagnostic services with the claim for an inpatient stay when they are administered in the three days preceding an inpatient admission. Furthermore, according to the AHA, hospitals will lose $35.3 billion to Medicare severity diagnosis- related group coding cuts in the American Taxpayer Relief Act of 2012 and CMS regulations. Another $2.4 billion in cuts will come from an offset for the two-midnight rule, under which inpatient admissions are considered reasonable and necessary for Medicare beneficiaries who require more than a one-day hospital stay or who need inpatient-only treatment. Finally, in accordance with the Bipartisan Budget Act, long-term acute care hospital payments will be reduced by $3 billion. n

• Cover