Objectives: We examined the effect of hospital type and medical coverage on the risk of 1-year mortality of very low birth weight (VLBW) infants while adjusting for possible selection bias. Methods: The study population was limited to singleton live birth infants having birth weight between 500 and 1500 g with no congenital anomalies who were born in Arkansas hospitals between 2001 and 2007. Propensity score (PS) matching and PS covariate adjustment were used to mitigate selection bias. In addition, a conventional multivariable logistic regression model was used for comparison purposes. Results: Generally, all 3 analytical approaches provided consistent results in terms of the estimated relative risk, absolute risk reduction, and the number needed to treat. Using the PS matching method, VLBW infants delivered at a hospital with a neonatal intensive care unit (NICU) were associated with a 35% relative decrease (95% bootstrap confidence interval, 18.5%-48.9%) in the risk of 1-year mortality as compared with those infants delivered at non-NICU hospitals. Furthermore, our results showed that on average, 16 VLBW infants (95% bootstrap confidence interval, 11-32), would need to be delivered at a hospital with an NICU to prevent 1 additional death at 1 year. However, there was not a difference in the risk of 1-year mortality between VLBW infants born to Medicaid-insured versus non-Medicaid-insured women. Conclusions: Estimated relative risk of infant mortality was significantly lower for births that occurred in hospitals with an NICU; therefore, greater efforts should be made to deliver VLBW neonates in an NICU hospital. © 2012 Lippincott Williams & Wilkins.