Data on Rural Hospitals

Payer Mix and Margins at Rural Hospitals

This table shows the proportion of the rural hospital’s total services that are paid for by different payers and the extent to which the payments from those payers cover the hospital’s cost of delivering the services. Averages are shown for the three most recent years for which cost reports were available as of July 2024, excluding 2020 because of the unusual changes in costs and revenues during the initial months of the coronavirus pandemic.

Definitions of the variables are provided below the table.

Information About the Data

The Share of Patient Costs represents the estimated cost of the services to the patients insured by a particular type of payer divided by the total cost of services to all patients.

• Medicare FFS represents the hospital services delivered to patients on Original Medicare. (Services for Medicare Advantage patients are included in “Private and Other.”)
• Medicaid, CHIP, and Indigent represents services to patients enrolled in Medicaid, CHIP (the Children’s Health Insurance Program), and state or local indigent care programs.
• Uninsured Charity Care represents services to patients who do not have insurance and who met the hospital’s eligibility criteria for charity care. (Different hospitals use different criteria for assessing eligibility.)
• Private and Other represents hospital services delivered to insured patients other than those with Original Medicare, Medicaid, CHIP, or other indigent care programs. This primarily represents patients with private insurance (including Medicare Advantage plans), but it will also include some governmental programs such as the Veterans Administration or Workers Compensation.

The Margins for Medicare and Medicaid represent the difference between the payments from those payers and the costs of the services delivered to the patients they insure, divided by the cost. For example, if the margin for Medicare is -3%, it means Medicare paid 3% less than the cost of the services to the patients on Original Medicare.

For private payers, the Allowed Margin is the margin calculated using the “allowed amounts” for services under the hospital’s contract with each payer. The allowed amount includes the cost-sharing portion (i.e., deductibles, co-payments, and co-insurance) that the patients are required to pay. Since not all patients are able to pay the full cost-sharing they owe, Bad Debt shows the percentage of the cost the hospital does not receive due to these non-payments. (This also includes unpaid amounts for patients who have insurance but also qualify for charity care assistance.) The sum of the Allowed Private Margin and Bad Debt represents the hospital’s actual net margin on privately insured patients. For example, if the hospital has an Allowed Margin of +10% on privately insured patients and Bad Debt of -6%, then the actual profit on the patients is only 4%.

Margins are not shown for Indian Health Service hospitals because they do not receive payments based on the number and types of services they deliver or report revenue in the same way as other hospitals do.

Additional details on the methodology are available in the Methodology section.