Health Management (HMA) Reviews Medicare IPPS Rule, Says MDH Elimination Will Impact on FY13 Inpatient Rates

August 3, 2012 9:06 AM EDT
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Health Management Associates, Inc. (NYSE: HMA) has reviewed the Centers for Medicare and Medicaid Services’ Final Fiscal Year 2013 rule for Medicare Inpatient Prospective Payment System (IPPS) issued August 1, 2012.

Health Management owns or operates four hospitals that qualify as Medicare Dependent Hospitals (MDHs). Under the 2013 Medicare IPPS rule, Medicare will eliminate MDH payments, and MDHs will revert to a blended reimbursement rate.

Health Management believes that the elimination of the MDH designation from Health Management’s four MDH hospitals will have an insignificant impact on Health Management’s earnings for 2012.

Based on the fiscal year 2013 Medicare IPPS rule, Health Management believes that its Medicare inpatient rates will increase between 2.2% and 2.4% for the twelve month period beginning on October 1, 2012. These inpatient payments rates are prior to any sequestration reductions. On a net basis, after giving effect to anticipated sequestration reductions, Health Management believes its Medicare inpatient rates for its hospitals will increase between 0.2% and 0.4% for the twelve month period beginning on October 1, 2012.

Health Management is also affirming its diluted EPS from continuing operations objective range for the year ending December 31, 2012 to be between $0.80 and $0.90. This diluted EPS range for 2012 does not include approximately $98 million, or $0.25 per diluted share, of impact expected from interest rate swap accounting and mark-to-market adjustments nor does it include approximately $90 to $120 million of anticipated Medicare and Medicaid Healthcare Information Technology reimbursement.

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