The Financial Importance of Medicare Post-Acute and Hospice Care to Rural Hospitals


The provision of post-acute (PAC) and hospice care by rural hospitals allows patients to receive such care locally, avoiding unnecessary travel and staying close to family and friends. Typically, rural residents discharged from an acute care facility receive PAC either locally or in the urban center where acute care was provided. Policy makers are considering changes in how these services are reimbursed. These changes will increasingly affect Medicare reimbursement of rural hospitals if the number of rural PAC and hospice care providers included in ACO and bundled payment contracts drops, or if more rural residents choose to receive PAC and hospice care in urban centers rather than closer to home. The purpose of this brief is to describe Medicare post-acute and hospice care provided by rural hospitals (or in rural areas) by characterizing 1) the variation in the number of rural hospitals that provide PAC and hospice care, 2) the average amount of Medicare revenue rural hospitals receive for these services, and 3) the financial importance of PAC and hospice care services to rural hospitals. The description of PAC and hospice care provided in this brief is meant to help highlight the potential impact a change in reimbursement might have on rural hospitals and their communities.

North Carolina Rural Health Research and Policy Analysis Center
Alex Schulte, H. Ann Howard, George Pink