Bat­tle erupts over MedPAC’s back­ing of cuts

Modern Healthcare - - NEWS - Rich Daly

MEDPAC’S rec­om­men­da­tion to equal­ize rates draws fire

Medi­care’s ad­vi­sory panel rec­om­mended a pay hike for most hos­pi­tal ser­vices in 2013, but a sep­a­rate spend­ing sug­ges­tion re­ceived much more at­ten­tion. The Medi­care Pay­ment Ad­vi­sory Com­mis­sion on Jan. 12 voted 16-1 to sup­port a 1% up­date for in­pa­tient and out­pa­tient hos­pi­tal ser­vices for 2013. The panel also rec­om­mended 14-2 (with one ab­sten­tion) to phase in over three years a lower hos­pi­tal out­pa­tient eval­u­a­tion and man­age­ment rate to the level pro­vided for such care in physi­cians’ of­fices.

The cut was de­scribed by sup­port­ers as the first sig­nif­i­cant step in an on­go­ing ef­fort to equal­ize Medi­care pay­ments for the same ser­vice by dif­fer­ent providers.

Glenn Hack­barth, chair­man of MEDPAC, said health pol­icy ex­perts have long lamented Medi­care’s tra­di­tion of dif­fer­ent pay for the same health­care ser­vices in dif­fer­ent lo­ca­tions, which he blamed on long-stand­ing “si­los” sep­a­rat­ing dif­fer­ent providers. The rec­om­mended pay equal­iza­tion, he said, is a grad­ual way to knock down those si­los.

Hos­pi­tal ad­vo­cates roundly chal­lenged the pay equal­iza­tion as likely to limit care and re­strict provider in­te­gra­tion, among other neg­a­tive ef­fects.

“While a 3% cut may be ten­able for some hos­pi­tals, we note that the im­pact is more

sig­nif­i­cant for teach­ing and in­ner-city pub­lic hos­pi­tals where the hos­pi­tal clin­ics are the main source of pri­mary and spe­cialty care in their com­mu­ni­ties,” Karen Smoler Heller, ex­ec­u­tive vice pres­i­dent of health eco­nomics and fi­nance at the Greater New York Hos­pi­tal As­so­ci­a­tion, wrote in a Jan. 10 anal­y­sis of the change.

The ex­tent of fi­nan­cial im­pacts of the change, ac­cord­ing to sup­port­ers, would be lim­ited by a rec­om­mended study of the cuts and a pro­vi­sion lim­it­ing re­duc­tions dur­ing the phase-in pe­riod to 2% of Medi­care pay­ments for dis­pro­por­tion­ate-share hos­pi­tals at or above the me­dian.

But com­mis­sion mem­ber Peter But­ler, ex­ec­u­tive vice pres­i­dent and chief op­er­at­ing of­fi­cer of Rush Univer­sity Med­i­cal Cen­ter, Chicago, warned that such lim­i­ta­tions to the cuts would ap­ply to hos­pi­tals’ over­all Medi­care re­im­burse­ments, while the fa­cil­i­ties’ out­pa­tient care could un­dergo greater cuts.

The fight over the pro­posed cut is likely to con­tinue once MEDPAC’S rec­om­men­da­tion is de­liv­ered to Congress, where many lead­ers are search­ing for re­duc­tions in Medi­care.

Sep­a­rately, MEDPAC ab­stained from rec­om­mend­ing any up­dates in physi­cian pay rates be­cause it for­mally rec­om­mended that Congress re­place the physi­cian sus­tain­able growth-rate for­mula in Oc­to­ber.

The panel also unan­i­mously rec­om­mended a 0.5% up­date for am­bu­la­tory sur­gi­cal cen­ters; a 1% up­date for out­pa­tient dial­y­sis ser­vices; and a 0.5% up­date for hospice ser­vices. Mean­while, the panel en­dorsed no in­crease in 2013 for in­pa­tient re­ha­bil­i­ta­tion fa­cil­ity ser­vices, long-term-care hos­pi­tal ser­vices, or skilled nurs­ing fa­cil­ity ser­vices.

MEDPAC unan­i­mously rec­om­mended that the CMS launch a value-based pur­chas­ing pro­gram for am­bu­la­tory sur­gi­cal cen­ters by 2016.

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