Medi- Minutes

New Medicare Payment System Raises 
Outpatient Care Reimbursement

Hospitals will receive better reimbursements from Medicare beginning in July, according to the Health Care Financing Administration. A new payment system for outpatient services designed to encourage more efficient delivery of care will offer a raise of 4.6% this year, when payments had originally been scheduled to decrease by 5.7% under a reimbursement system proposed in September 1998.

The new system will pay hospitals a fixed fee for specific services and procedures, so hospitals that operate more efficiently will make more money. However, according to the American Hospital Association, the payments will still be too low to allow even efficient hospitals to break even.