AHA to Congress: Don't Lower Hospital Outpatient Department Payments

Testifying on behalf of the American Hospital Association at a hearing on Medicare payment reform, Reginald Coopwood, MD, president and CEO of Memphis, Tenn.-based Regional One Health, urged House lawmakers not to enact site-neutral payments for hospital outpatient departments.

Dr. Coopwood told the House Energy and Commerce Health Subcommittee that implementing site-neutral payment policies recommended by the Medicare Payment Advisory Commission would reduce Medicare hospital outpatient department payments by 5.5 percent, causing hospitals' Medicare outpatient margins to drop from negative 11.2 percent in 2011 to negative 17.7 percent.

 He also said hospitals are unique in offering services such as 24-hour care on all days of the year, uncompensated emergency care and treating victims of large-scale accidents like epidemics and natural disasters. "These critical roles, while often taken for granted, represent an essential component of our

Nation's health and public safety infrastructure," Dr. Coopwood said in his testimony. "Medicare beneficiaries and the public consistently express concern that cuts to hospital payments could mean fewer nurses and longer waits in emergency departments."

Medicare reimbursement for HOPDs and ASCs has been hotly contested from different sides of the healthcare industry for years. The Medicare Payment Advisory Commission has consistently called for site-neutral Medicare payments, citing the fact Medicare paid HOPDs 78 percent more on average than ASCs for the same procedure in 2013.

This past April, the HHS Office of Inspector General fueled the debate by recommending that CMS reduce hospital outpatient prospective payment system rates for ASC-approved procedures to ASC levels for low-risk patients. The OIG said such a measure could save Medicare as much as $15 billion from 2012 through 2017 in expenses, and it would also save beneficiaries between $2 billion and $4 billion in copays and coinsurance charges.

However, CMS Administrator Marilyn Tavenner has disagreed with the OIG's recommendation, saying a change of that scope would require legislative approval. Furthermore, she said most ASC payment rates are based on hospital outpatient rates, and paying hospitals based on ASC rates would be challenging.

More Articles on Site-Neutral Outpatient Payments:
OIG: Medicare Should Reduce HOPD Surgery Payments to ASC Rates
HOPD vs. Physician Office: A Case Study in the Payment Gap
MedPAC Report Recommends Site-Neutral Medicare Payments, SGR Repeal 


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