The Agency for Healthcare Research & Quality figures in the reform formula quite predominantly. The organization and its rankings are a proxy of sorts for the shifting of funds for acute hospital reimbursements under Medicare. A point of contention in the entire reform debate involved lowered rates of reimbursement for hospital services delivered by high-quality ranked acute care hospitals in favor of those whose overheads were higher, patient populations were greater, and needs were ripe with the potential for waste — namely urban, inner city acute facilities. Needless to say, the addition of debt incurred by so-called charity care and unreimbursable costs at the hands of Medicare beneficiaries were enough to tip the operating costs of some precariously perched hospitals sufficiently in the red to effect closure.

A by-product of reform in Washington intended to subvert this payment inequity among high quality (suburban, community, and semi-rural) and high waste (predominantly urban, inner city) hospitals under the new Medicare reform formula could be creating perverse incentives for hospitals in more favorable geographic locations to garner higher rates of reimbursements, simply because the patient populations served may not require as much cost to deliver that care. This would, in turn, affect hospitals which serve a more medically heterogeneous population and also happen to provide highly ranked quality care

Consequently, systems like Mayo expect to reap millions more under new Medicare reform rules, unlike hospitals of all sizes in major urban cores. | LINK

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