Rural Hospital Systems and Baby Boomers

As A Majority of Baby Boomers Now Qualify for Medicare, the Issue of Being Reimbursed for Medicare Bad Debts Becomes More Significant.  Are You as A Healthcare Provider, Ready to Defend Your Share of Medicare Bad Debt Reimbursement During Audit?

  • Baby Boomers reaching the age of 65 since 2012 are doing so at a rate of 10,000/Day, every day, and 10 years later, statistics show that those Baby Boomers are beginning to significantly impact the Medicare Program Cost Reporting System with improper reimbursement of the Medicare Bad Debt to many Healthcare Providers.

Baby boomers are Americans born between Jan. 1, 1946 and Dec. 31, 1964. Their 65th birthdays mark the beginning of eligibility for Medicare and fall one year before their full qualification for Social Security. May 4, 2011. The roughly 75 million Americans who make up the baby boomer generation are leading the country through yet another sweeping societal change. About 3 million baby boomers will hit retirement age every year for about the next 20 years and will affect how caregivers and policymakers shape the health care system for decades to come.

At ages’ 74 and 62, they are the advance guard of an army of retiring baby boomers who researchers say will leave the cities and suburbs, flooding rural America over the next 10 years. If past migration patterns hold, the population of 55- to 75-year-olds in rural areas will increase to more than 14.2 million by 2020, nearly double what it was in 2000. And, the migration may be even larger than anticipated. Researchers say boomers have an affinity for the country. Their childhoods coincided with the rise of suburbia, but their parents often had rural connections and those “hometown ties” are a strong influence when empty-nest boomers quit work.

Examples of higher utilization of Rural Hospital Systems:

  1. October 2017 AARP Bulletin: “Alcohol Abuse Soars for Older Americans”. New study in JAMA Psychiatry suggests a public health crisis.
  2. AARP in recent studies are noticing that those who are Pre-Baby Boomers, after hitting the age of 75, are not as a majority keeping up with their health, and are getting bigger, as well as using the healthcare inpatient system more.
  3. Are Providers ready for Intermediary audit of both Medicare claim documentation and the Cost Report filed.
  4. Hospital Systems in metropolitan areas have more access to employees and consultants having significant knowledge to defend their share of Medicare reimbursement at the claim as well as cost report level.

Seventy-two million Americans live in rural areas and depend upon the hospital serving their community as an important, and often only, source of care. The nation’s nearly 2,000 rural community hospitals, frequently serve as an anchor for their region’s health-related services, providing the structural and financial backbone for physician practice groups, health clinics and post-acute and long-term care services. In addition, these hospitals often provide essential, related services such as social work and other types of community outreach.

Rural hospitals provide their patients with the highest quality of care while simultaneously tackling challenges due to their often, remote geographic location, small size, limited workforce, and constrained financial resources. About 10 years ago, rural hospitals’ low-patient volumes made it difficult for these organizations to manage the high fixed costs associated with operating a hospital. We have now reached a tipping point where the Baby Boomers and the 4 examples of higher utilization of rural hospital systems, will make it difficult to find empty beds. This in turn makes them particularly vulnerable to policy and market changes, and to Medicare and Medicaid payment cuts.

  • Hospital Systems in rural areas also do not have access to as many qualified employees and consultants with that same knowledge, nor the accounting/finance systems to produce the claim documentation necessary for audit requirements. Those impacted are primarily Critical Access Hospitals (CAH), and Sole Community Hospitals(SCH). There are much fewer Medicare-dependent Hospitals (MDH) and Rural Referral Centers (RRC) in the rural area and are not a significant concern.


Walton Luke

Past President, HFMA Northern California 1999-2000

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