Urban hospitals are exploiting government programs for rural ones

The rapid growth of urban hospitals claiming “administratively rural” status within Medicare is yet another example of how well-intentioned policies unintentionally create loopholes for private players to exploit. As a consequence, healthcare markets are being distorted, prices are rising, and American patients and taxpayers are being compromised.

Following two federal court rulings, the Centers for Medicare & Medicaid Services changed its rules in 2016 to allow urban hospitals to pair Section 401 reclassification with a subsequent Geographic Classification Review Board reclassification. Suddenly, many urban hospitals, especially the large ones, could dual-classify as “urban” and “rural.”