Seniors Needn’t Drive into the City to Get Overcharged!

Remember when you had to drive into the city to get overcharged?  Those days are over.  According to a report issued Wednesday by the Office of Inspector General of Health & Human Services, Medicare patients pay two to six times as much for outpatient care at rural critical access hospitals as for the same care at other hospitals.

The report (OEI-05-12-00085) looked at the out-of-pocket costs paid by seniors for the ten most frequent outpatient treatments in 2012.

There are two ironies here.  First, hospitals qualify for “critical access” status by being the only hospital in a rural area.  In other words, a critical access hospital is the only game in town.  It has a captive market.  Second, Medicare pays critical access hospitals more than other hospitals.  They get 101% of their costs for outpatient services.

So why do seniors pay two to six times as much at critical access hospitals?  The answer is that patients are required to pay 20% of the charges for outpatient services, and these hospitals charge more than other hospitals—a lot more.