Medicare

Pursuant to a congressional request, GAO determined the: (1) number of rural hospitals which ceased Medicare participation before or after implementation of its inpatient hospital prospective payment system (PPS); and (2) availability of other hospitals to Medicare beneficiaries in the areas the closed hospitals formerly served.

GAO found that, as of December 1986: (1) 2,918 rural hospitals participated in Medicare; (2) 446 rural hospitals had terminated Medicare participation since its inception in 1966; (3) 48 of the hospitals that terminated their Medicare participation were in counties that did not have another participating hospital; and (4) 41 rural hospitals ceased participation after PPS implementation, 14 of which were in counties with no other participating hospitals. GAO also found that: (1) 25 rural hospitals ceased Medicare participation during the 3 years immediately before PPS implementation; and (2) 3 of those hospitals were in counties with no other participating hospitals. GAO noted that: (1) most hospitals ceased participation due to closure; and (2) the effect on beneficiary access of hospital termination of Medicare participation depended on factors such as county size, terrain, road quality, and proximity of other participating hospitals.