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Medicare Capital Payments to New Hospitals

Hospitals are reimbursed through Medicare Part A for Medicare-related capital costs (e.g., depreciation, interest, rent, and property-related insurance and taxes costs). New hospitals are paid on a cost basis for their first 2 years of operation. Beyond the first 2 years, hospitals' Medicare-related capital costs are paid through the inpatient prospective payments system under which a portion of their payment for each discharge is intended to cover capital costs. We will determine the potential impact for Medicare if capital payments to new hospitals were paid through the prospective payments system for the first 2 years.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
February 2020 Centers for Medicare & Medicaid Services Medicare Capital Payments to New Hospitals Office of Audit Services W-00-20-35843 2021