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Medicare Hospital Payment Formula.—
The Social Security Administration decided that the nation's hospitals must separate the costs of caring for aged medicare beneficiaries from those of other age groups in receiving payments from the government.The American Hospital Association had urged that the "per diem" hospital costs for all patients be the basis for reimbursement under medicare.Social Security Commissioner Robert Ball told a news conference that the per diem system "would have increased the overall cost of the program by nearly 10%." He said that average daily costs for aged patients—who have longer hospital stays—are less than the average daily costs for younger patients whose daily costs reflect a higher percentage of lab tests, etc.Under the law, Commissioner Ball said, the government is directed to pay the reasonable cost in full of care furnished beneficiaries, so that no part of their cost need be borne by other patients.
WASHINGTON NEWS. JAMA. 1966;196(7):25-27. doi:10.1001/jama.1966.03100200011003