AHA Opposes MedPAC's Proposal to Equalize E/M Medicare Payment Rates

The Medicare Payment Advisory Commission recently proposed a policy to equalize Medicare payment rates for evaluation and management services between hospital outpatient departments and freestanding physician offices, and the American Hospital Association argues payment reductions for hospital outpatient services could hurt Medicare and Medicaid beneficiaries, according to an AHA letter to MedPAC (pdf).

MedPAC's proposal would reduce Medicare payment rates for non-emergency department E/M services provided in HOPDs by an average of 75 percent. It would also cap total payment for E/M services at the rate paid to physicians for providing the services in their offices, and hospitals would receive the difference between the physician payment in the office and the physician payment in the hospital.

The AHA, which also opposed the hospital cuts included in the Middle Class Tax Relief and Job Creation Act, said Medicare margins for outpatient services were negative 10.8 percent in 2009, according to MedPAC's June 2011 Databook.

"Hospitals already are underpaid for these services, and recommending that payments for each of these services be reduced by 71% or more…is excessive and harmful," according to the letter.

Related Articles on AHA and MedPAC:

AHA Tells Supercommittee to Reject Proposals That Undermine Medicaid

AHA, AMA Urge MedPAC to Consider Other Issues With SGR

MedPAC Approves Final SGR Repeal, Physician Payment Fix

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