US · guidance
CMS Pub. 100-04, ch. 3, § 80
Hospitals That Do Not Charge
A3-3660.5
Participating hospitals that do not charge individuals and also meet the exceptions to the law
that normally exclude payment for expenses paid for directly or indirectly by a governmental
entity, may be reimbursed the reasonable cost of furnishing covered services to Medicare
beneficiaries. The following special procedures apply to their bills.
• Part A Services
Computing Medicare Billing Rate
The Medicare billing rate per day is determined by the following equation:
Total allowable inpatient cost = cost per day per patient
Total inpatient days
Thus, the billing rate that appears is the average inpatient cost per day per inpatient as
calculated from entries on the latest cost settlement report approved by Medicare. Where
this is the provider's first year in the program, the A/B MAC (A) determines this rate based
on the provider's books and records the appropriate billing rate for services rendered to
Medicare beneficiaries.
Computing Medicare Billing Rate (Inpatient)
The Medicare billing rate is determined in the following manner:
Total available inpatient cost = Cost per day per patient
Total inpatient days
The A/B MAC (A) multiplies the cost per day per patient by 93 percent for short-term
hospitals and by 98 percent for long-term hospitals. (See §2208.lE of the Provider
Reimbursement Manual, Part I, for definitions of "short-term" and "long-term" hospitals.)
Then it applies the following fixed percentages. The result is the Medicare billing rate.
Computing Medicare Billing Rate (Outpatient)
The Medicare billing rate is determined by the following equation:
Total allowable outpatient cost = average cost per visit
Total visits (occasions of service)
Thus, the billing rate is the average cost per outpatient visit as calculated from entries on the
latest cost settlement report approved by Medicare. Where this is the provider's first year in
the program, the A/B MAC (A) determines this rate based on the provider's books and
records the appropriate billing rate for services rendered to Medicare beneficiaries.
History
(Rev. 1, 10-01-03)
Provenance
- Source
- cms.gov
- Retrieved
- 2026-08-25
- Edition
- iom-2026-08-25
- Content hash
b75ed77526b08311199f7f9e58b0231e179af8ca9f88c41d805203a3fcec7576
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