The GAO examined vertical consolidation trends between hospitals and physicians from 2007 to 2013 due to a recent spike in Medicare hospital outpatient department payments. Between 2007 and 2013, HOPD spending rose more than $14 billion, according to the report.
The number of vertically consolidated hospitals increased from about 1,400 to 1,700, while the number of vertically consolidated physicians nearly doubled from about 96,000 to 182,000.
After consolidation, evaluation and management services performed in physicians’ offices can be classified as being performed in a HOPD setting, which often receive higher reimbursement rates. The Medicare payment rate in 2013 for a evaluation and management HOPD visit was on average $51 higher than the same service performed in a physician office.
“Such a shift [in HOPD] could undermine Medicare’s ability to be an efficient purchaser of healthcare services, given that Medicare often pays providers at a higher rate — sometimes twice as much — when the same service is performed in an HOPD rather than in a physician office,” the GAO stated in the report.
The government agency requested Congress consider directing HHS to equalize payment rates between evaluation and management office settings and return the associated savings to the Medicare program.
More articles on revenue cycle:
CoPatient launches expense management software for consumers, employers
5 ways to ensure success with bundled payment agreements
How to successfully operate with fee-for-service and fee-for-value reimbursement models
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.