Top hospitals by Medicaid and Medicare payor mix

Revenue sources for U.S. hospitals play an important role in an organization’s financial health and performance. This payor mix, or payer mix, refers to the percentage of hospital revenue from healthcare insurance companies versus government insurance programs like Medicare and Medicaid.

How is payor mix calculated?

In the Definitive Healthcare HospitalView product, payor mix data represents the breakdown of revenues, charges, discharges, and patient days that come from different medical insurance claims payors. The proprietary calculation is based on a facility’s charge and revenue measures in the Medicare Cost Report.

Results in the following analysis are aggregated from the most recent 12-month interval tracked in our database. The most recent full calendar year of data available at the time of publishing is for 2021.

Why is payor mix important in healthcare?

Payor mix is an important metric to track because self-paying patients and healthcare insurance companies compensate hospitals at a higher rate than government programs like Medicare. Government programs may pay hospitals less than the actual cost of patient treatment, impacting hospital revenue.

Facilities that serve primarily Medicare and/or Medicaid beneficiaries, such as safety-net hospitals, rely far more heavily on government reimbursement levels than hospitals with a lower percentage of Medicare and Medicaid patients. Hospitals with greater numbers of Medicaid and Medicare beneficiaries can struggle to draw patients with private insurance to balance the scales.

What is the average payor mix at U.S. hospitals?

On average, payor mix between Medicare, Medicaid and private/self-pay at U.S. hospitals is estimated at:

Average payor mix based on net patient revenue

Fig. 1 Data is from the Definitive Healthcare HospitalView product and derived from the Medicare Cost Report. Accessed June 2023.

How is payor mix changing?

The percentage of the total payor mix from private/self-pay revenue increased from 66.5% in 2018 to 68.9% in 2021. The Medicare percentage decreased from 21.8% to 18.9%.

In addition, the percentage of patient days covered by private/self-payors has increased from 42.7% in 2011 to 56.5% in 2021 while the percentage of Medicare patient days decreased by about 10 percentage points to 35.6%. This trend points towards the increase in Medicare Advantage enrollment, or the Medicare Part C plans offered by private payors approved by Medicare.

The payor mix percentage for Medicaid revenue increased slightly from 12.8% to 13.5% 2018 to 2021. Medicaid enrollment has been increasing with the expansion of the Affordable Care Act (ACA) and during the COVID-19 pandemic.

Which hospitals have the highest and lowest Medicare payor mix?

Below are the top hospitals with the highest and lowest payor mix days for Medicare. For this analysis, only hospitals with more than 50 discharges in the previous year and more than 50 beds are included to minimize outliers.

U.S. hospitals by highest Medicare payor mix

Fig. 2 Data is from the Definitive Healthcare HospitalView product and derived from the Medicare Cost Report. Accessed June 2023.

Whittier Rehabilitation Hospital - Westborough in Massachusetts, a long-term acute care hospital, has the highest Medicare payor mix at 91.3%. Second, Ridgeview Behavioral Hospital, a psychiatric hospital in Middle Point, Ohio has a Medicare payor mix of over 86.1%.

U.S. hospitals by lowest Medicare payor mix

Fig. 3 Data is from the Definitive Healthcare HospitalView product and derived from the Medicare Cost Report. Accessed June 2023.

Seven U.S. hospitals have zero Medicare payor mix days. Four hospitals on the list are children’s hospitals. Since Medicare supports individuals over the age of 65, it is fitting that many children’s hospitals do not receive any Medicare reimbursement.

Which hospitals have the highest and lowest Medicaid payor mix?

Seven U.S. hospitals have zero Medicare payor mix days. Four hospitals on the list are children’s hospitals. Since Medicare supports individuals over the age of 65, it is fitting that many children’s hospitals do not receive any Medicare reimbursement.

U.S. hospitals with highest Medicaid payor mix

Fig. 4 Data is from the Definitive Healthcare HospitalView product and derived from the Medicare Cost Report. Accessed June 2023.

Meadowbrook Rehabilitation Hospital in Gardner, Kansas and Lake Taylor Psychiatric Care Hospital in Norfolk, Virginia have the highest Medicaid payor mix days, each at more than 85%.

U.S. hospitals with lowest Medicaid payor mix

Fig. 5 Data is from the Definitive Healthcare HospitalView product and derived from the Medicare Cost Report. Accessed June 2023.

Eleven hospitals currently have Medicaid payor mix days at 0.0%. The hospitals on the list range from a children’s hospital to psychiatric and rehabilitation hospitals. A number of the short-term acute care hospitals on the list are specialty hospitals for the heart or orthopedics.

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Start a free trial today to start analyzing hospital financial performance, segmenting accounts by revenue figures or payor mix, and reaching the right key contacts.