MedPAC Considers Inpatient, Outpatient, Long-Term Care Hospital Pay Changes for 2015

The Medicare Payment Advisory Commission considered draft recommendations to Congress yesterday concerning inpatient, outpatient and long-term care hospital payments in 2015, according to an AHA News report.

The recommendations would reduce or eliminate payment differences between hospital outpatient departments and physician offices for certain procedures and increase hospital inpatient and outpatient prospective payment rates by 3.2 percent in 2015, according to the report. Currently, Medicare reimburses hospital outpatient departments 80 percent more than freestanding physician clinics for routine evaluation and management office visits.

Additionally, the suggested reforms include freezing Medicare payments to physicians in 2015 in place of the sustainable growth rate formula. Lawmakers have been working to repeal and replace the flawed physician payment formula. Every year since 2003, Congress has temporarily bypassed the SGR so physicians would not have to endure double-digit cuts to their Medicare pay. The latest proposed patch would delay a 24 percent pay cut for physicians through March 2014.

The recommendations MedPAC considered would also reduce long-term care hospital reimbursement by making LTCH pay rates equivalent to those for 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, according to the report.

The American Hospital Association praised the proposed inpatient and outpatient pay rate increase. However, Joanna Hiatt Kim, AHA vice president of payment policy, said the group is "deeply disturbed" by the pay cuts for long-term care hospitals, according to the report. She said the discussion surrounding the cuts to 64 percent of long-term care hospital cases focused only on pay rates and didn't touch on potential effects on Medicare beneficiaries' access to high-quality care.

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