More urban hospitals dually classifying as rural under Medicare: study

Dive Brief:

A growing number of urban hospitals are benefitting from a nearly decade-old rule change that allows them to dually qualify as rural facilities , boosting their Medicare reimbursement, according to a new study published in Health Affairs.

The number of hospitals with rural classifications for administrative purposes rose from just three in 2017 to 425 in 2023, driven by providers in urban communities that classify in both groups, researchers found. Most of these dually classified facilities were nonprofits, including some large, urban academic medical centers.

The trend is likely to continue without intervention from lawmakers, potentially increasing Medicare spending on geographically urban hospitals — even as many rural facilities struggle financially and are at high ri