General Information

Medicare Dependent Hospital

Medicare Dependent Hospital

For cost reporting periods beginning on or after April 1, 1990 and ending before October 1, 1994 or for discharges occurring on or after October 1, 1997 and ending before October 1, 2006, a Medicare Dependent Hospital (MDH) is a rural hospital that meets all of the following criteria:

  1. It has 100 or fewer beds during the cost reporting period;
  2. It is not also classified as a Sole Community Hospital; and
  3. At least 60 percent of its inpatient days or discharges were attributed to Medicare Part A beneficiaries during the hospital’s cost reporting period or periods as follows:
  • For its cost reporting period ending on or after September 30, 1987 and before September 30, 1988;
  • For its cost reporting period begin- ning on or after October 1, 1986 and before October 1, 1987 (only if the hospital does not have a cost report- ing period that meets the preceding requirement); or
  • For at least two of the last three most recent audited cost reporting periods for which there is a settled cost report.
    If the cost reporting periods above are for less than 12 months, the hospital’s most recent 12-month or longer cost reporting period before the short period is used.

Medicare Dependent Hospital Payments

Payment for an MDH’s inpatient operating costs are the sum of the Federal payment rate plus half of the amount that exceeds the Federal payment rate based on the highest hospital specific base year costs per discharge for Medicare beneficiaries from 1982 or 1987, trended forward.

To find additional information about MDHs, see Chapter 3 of the Medicare Claims Processing Manual (Pub. 100-4) at on the Centers for Medicare & Medicaid Services website.