MedPAC Approves Final 2015 Hospital Payment Recommendations

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The Medicare Payment Advisory Commission has approved a final recommendation that Congress increase Medicare payment rates for hospitals in fiscal year 2015, according to an AHA News report.

MedPAC has recommended upping rates by 3.25 percent for the hospital inpatient and outpatient prospective payment systems in the absence of sequestration cuts and by 5.25 percent if the spending cuts continue, according to the report. Sequestration went into effect last April, enacting automatic 2 percent Medicare payment cuts for the next decade.

MedPAC officials previously said they wouldn't consider sequestration when making Medicare payment update recommendations until fiscal year 2016 on the grounds that sequestration is a "short-term" impact.

The American Hospital Association is pleased with MedPAC's final recommendation of a "substantial update" for hospitals in 2015, according to the report. However, the AHA wasn't as happy with another concurrent recommendation from MedPAC suggesting Congress reduce or eliminate pay differences between hospital outpatient departments and physician offices for selected procedures.

HOPDs are paid significantly more than physician offices and ambulatory surgery centers for outpatient services. However, the AHA has argued against more site-neutral payments, saying the change would cost hospitals billions annually.

Additionally, MedPAC finalized its recommendation that long-term care hospitals should be paid the same amount as general acute-care hospitals for patients who are not deemed "chronically critically ill." The savings from those pay cuts would be used to create a new outlier pool for chronically critically ill people treated in hospitals paid according to the inpatient prospective payment system. The AHA is also troubled by this recommendation on the grounds that MedPAC did not properly analyze and consider the potential effects the payment change would have on Medicare beneficiaries' access to high-quality care. 

More Articles on Medicare Payments:
AHA to MedPAC: Consider Sequestration Effects for 2015 Medicare Payments  
MedPAC Considers Inpatient, Outpatient, Long-Term Care Hospital Pay Changes for 2015  
AHA: Hospital Medicare, Medicaid Payments Cut by $113B Since 2010 

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