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Hospitals Fight MedPAC Plan to Reduce Outpatient Rates

Cheryl Clark, for HealthLeaders Media, March 13, 2013

"Frankly I would have extended the application of these principles to these 61 or 66 (categories of care) and then the equalization of payments between the ambulatory/surgery centers and the outpatient departments back in March when we first made the payment policy changes to the E&M codes. So if anything, I think we are too slow and I would go much more quickly than we're talking about."

Armstrong added, "Not only is this a pricing structure that creates behavior that's costing the Medicare program in ways that doesn't create any value for beneficiaries, the cost to health care is far more than just the Medicare program," because private plan payment structures are organized around Medicare. "There's tremendous waste as a result of this payment structure. The sooner we change it, the better."

Hospital officials say they will continue to tear the plan apart because of the damage it could do. "There is cross subsidization going on in hospitals because of their safety net functions, disaster preparedness and additional cost of regulations. It's just a fact of the way hospitals provide services to their communities. And if these subsidies weren't there, these services wouldn't be offered," Schulman says.

"MedPAC says it wants Medicare to be a 'prudent purchaser," Schulman adds. "But despite the lip-service they're providing for making sure they count stand-by costs, and regulations, and packaging, and all the criteria that gets put into place, this will really harm the very hospitals they are purporting to protect.

"And what's going to happen is that the very hospitals they say they want to help are going to be the very ones that are harmed under these proposals."


Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.
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1 comments on "Hospitals Fight MedPAC Rate Plan"


Steve Watkins (3/13/2013 at 12:04 PM)
Bunk! As a 'convincer' to private physicians thinking of selling their practices, many hospitals have been out there bragging to them on how much more cash they can generate by billing the identical E&M codes, in the identical buildings, with the identical staff, to the identical patients by billing M&M as 'outpatients of hospitals' rather than as standard physician offices. Hospitals across the land HAD to know there would be a day of settlement....