MedPAC seeks reimbursement rate freeze

The Medicare Payment Advisory Commission has voted unanimously to make a series of recommendations to Congress that would either freeze reimbursements or make them site neutral. The goal is to potentially save Medicare several billion dollars.

Also, in an effort to better incentivize primary-care doctors, MedPAC is asking Congress to restructure an initiative created by the Patient Protection and Affordable Care Act known as the Primary Care Incentive Program.

That program provides a 10% bonus payment on top of the fee-schedule payment for select primary-care services. MedPAC is suggesting that the bonus be paid on a per-beneficiary basis, instead of on a per-visit basis as it is now.

After assessing beneficiary access to a variety of services, MedPAC members are suggesting that Congress require Medicare to freeze rates for ambulatory surgical centers, dialysis, hospices and long-term care hospitals in 2016 at current reimbursement rates.

Commission staff members said they expect little to no impact on beneficiaries’ access to those services if rate increases are suspended, and that collectively keeping reimbursement rates the same for those services would save the program more than $1 billion.

Panel members also re-proposed a package of recommendations from MedPAC’s March 2014 report. Those suggestions included increasing payment rates for acute-care hospital inpatient and outpatient prospective-payment systems in 2016 by 3.25%.

Another carryover recommendation from last year suggests creating site-neutral payment for certain services offered both in hospital outpatient departments and physician offices.

The commission noted that such a policy is needed because of a practice that involves hospitals converting physician offices to outpatient departments, resulting in higher reimbursement rates.

For example, in 2013, there was a 7% growth in hospital-based echocardiograms, while at the same time, there was an 8% decline in physician office-based echocardiograms, which are paid roughly half of what hospitals receive for the procedure.

Hospitals could see a $1.44 billion annual drop in reimbursement if Congress approves the proposals. Included would be a $1.2 billion reduction in Medicare program payments and a $240 million drop in coinsurance payments from beneficiaries, because cost sharing is much higher for outpatient department services than for those provided in a doctor’s office.

Similarly, MedPAC is suggesting making pay rates more equivalent for long-term care hospitals and acute-care hospitals when they treat similar patients who spend fewer than eight days in an intensive-care or critical-care unit. The panel suggested a three-year phase-in for this recommendation, ending in 2018.

The recommendations are included in MedPAC’s forthcoming March 2015 report.

See the original article on the Modern Healthcare website.