The Office of Inspector General (OIG) of Health & Human Services is recommending that CMS make a major reduction to the amount it pays hospitals for certain kinds of surgery.  Under the recommendation, Medicare would pay a hospital the ambulatory surgery center (ASC) rate rather than the hospital rate for performing a procedure that has been approved for ASCs.

The recommendation is number one of the OIG’s list of 25 recommendations in its recently released “Compendium of Unimplemented Recommendations.”  The reasoning behind the recommendation is straight-forward: if a procedure is so low-risk that it can be safely performed in an ASC, why should Medicare pay more simply because it’s performed in a hospital?

The OIG estimates that the change could save Medicare $15 billion over five years.  And Medicare beneficiaries should welcome the change because it would save them another $2 billion to $4 billion in copayments.