MedPAC Recommends Big Pay Cuts for Freestanding ERs

John Commins, April 6, 2018

The American Hospital Association says the recommendation comes as hospitals are already grappling with record-low negative Medicare margins for services.

The Medicare Payment Advisory Commission (MedPAC) is calling for a big payment rate cut for some freestanding emergency departments.

The panel on Thursday unanimously recommended that "Congress should reduce Type A emergency department payment rates by 30% for off-campus stand-alone emergency departments that are within six miles of an on-campus hospital emergency department."

Like everything else with the nonpartisan MedPAC, recommendations are non-binding, and Congress is free to adopt the recommendations or ignore them.

The American Hospital Association (AHA) has come out as strongly opposed to the cuts in comments submitted to MedPAC. AHA said the recommendation "is not based on any analysis of Medicare beneficiaries, Medicare costs or Medicare payments and would make Medicare’s record underpayment of outpatient departments and hospitals even worse."

AHA said that Medicare margins were a record-low negative 14.8% for hospital outpatient departments and negative 9.6% for hospitals overall in 2016, with the latter expected to reach negative 11% this year.

At the same time, AHA said it supports a recommendation to allow isolated rural hospitals to convert to stand-alone EDs, and urged MedPAC to include EDs in vulnerable urban communities as well.

MedPAC held a public meeting Thursday and Friday in Washington.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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