How a tiny hospital has imperiled Mass. Medicare funds

The Boston Globe reports:

Simple math errors at a tiny Massachusetts hospital have created big problems for other hospitals in the state, contributing to a potential $160 million drop in federal Medicare payments over the next year.

A loss that steep — 10 percent of Medicare funding for the hardest-hit hospitals — could force layoffs of 2,000 staff, with cuts concentrated outside Boston, according to estimates by the Massachusetts Council of Community Hospitals.

The quaint 19-bed Nantucket Cottage Hospital, owned by Partners HealthCare System and considered the state’s only rural hospital, has for years had an outsized impact on hospital finances statewide — but usually for the better.

Under nearly impenetrable hospital payment rules, Medicare must reimburse a state’s urban hospitals for employee wages at least as much as it reimburses its rural hospitals. As a result, Nantucket sets the floor for wage reimbursements at hospitals across the state. And because Nantucket’s wages are high, due to its remote island location and steep cost of living, that has created bonuses for many other Massachusetts hospitals in recent years.

The great moments of socialism!