MedPAC Release Payment Reduction Proposals

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On March 15, 2013 MedPAC issued its Report to Congress recommending for 2014 only a one-percent payment update to hospital inpatient and outpatient prospective payments, and no payment update for skilled nursing facilities, inpatient rehabilitation facilities, hospices, long-term care hospitals and home health agencies.  MedPAC recommends that the one-percent inpatient hospital payment increase be a net increase after making all necessary documentation and coding adjustments. 

The report also repeats MedPAC’s 2012 recommendation to equalize payment for physician evaluation and management services across all practice sites (including provider-based outpatient departments) at the physician office rate.  The report notes a continued shift in furnishing these services in hospital sites instead of in physician offices.  Congressional adoption of this policy would result in significant reductions in reimbursement for hospitals that furnish such services in provider-based sites.

MedPAC reiterates its call to repeal and replace the Sustainable Growth Rate payment formula for physician services, and notes some general industry trends including an improvement in hospital quality performance in areas such as the frequency of inpatient mortalities and hospital readmissions.

Reporter, Christopher Kenny, Washington, D.C., + 1 202 626 9253, ckenny@kslaw.com.

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