Provision of Uncompensated Care by Rural Hospitals: A Preliminary Look at Medicare Cost Report Worksheet S-10


Hospitals report that they provide a lot of care for which they receive no reimbursement. This may result from reimbursement rates that are below the cost of providing care to patients covered by certain government programs such as Medicaid, S-CHIP and state or local indigent care programs. Alternatively, the care may be truly uncompensated charity and/or bad debt care. For rural hospitals, distinguishing between unreimbursed costs, charity care and bad debt is particularly important because they receive a relatively greater proportion of total revenue from government payers. Despite the importance of uncompensated care information, reporting practices have been inconsistent and have contributed to confusion about the amount of charity care provided by hospitals and the amount of bad debt actually incurred by hospitals.

This brief conducts a preliminary assessment of the quality of uncompensated care data included in Medicare Cost Report Worksheet S-10 for critical access hospitals (CAHs) and other rural hospitals and to identify the implications of data quality issues for research and policy decisions. Worksheet S-10 data for all rural hospitals were collected from the Healthcare Cost Reporting Information System.

Several data quality issues in Worksheet S-10 were identified: 1) large numbers of zero values, particularly among Medicaid and S-CHIP programs; 2) possible incomplete capture of the total initial obligation of patients approved for charity care, and; 3) zero and negative values for charity care, bad debt, total uncompensated cost and the grand total. We found several implications of the study: the use of these data for policy making and research at this point in time could be imprecise; consistency with other data sources could improve the quality of data in Worksheet S-10; and that revisions to Worksheet S-10 may be needed.

North Carolina Rural Health Research and Policy Analysis Center
Caroline Crews, Kristin Reiter, Randy Randolph, G. Mark Holmes, George Pink