In a letter to federal lawmakers, teaching hospitals and medical schools emphasized their opposition to payment reductions for evaluation and management services in hospital outpatient departments (HOPD) that were folded into the Middle Class Tax Relief and Job Creation Act of 2011.

The correspondence from the Association of American Medical Colleges (PDF) was sent Friday, one day after the Medicare Payment Advisory Commission made final its recommendation to reduce evaluation/management payment rates for hospital outpatient settings.

"The proposed HOPD cuts are counterproductive, as they are likely to result in the closure of some HOPDs and the reduction of services in others, greatly affecting the vulnerable populations—especially those with complex medical problems—that receive care there and limiting the ability to train the next generation of health professionals in these outpatient settings," the AAMC wrote. The letter was sent to members of the conference committee that will negotiate the middle-class tax bill, which also froze Medicare payments to physicians until Feb. 29. “For these reasons, the AAMC strongly urges you to reject the HOPD cuts and again commits to working with you to address the longstanding problem of replacing Medicare's physician payment system with a sustainable solution."

Meanwhile, the letter noted that although average Medicare margins in hospital outpatient departments in 2010 were -9.6%, the analysis from MedPAC was reported in terms of total Medicare revenue and didn't isolate the effect of outpatient margins that operate at a substantial loss. "When viewed this way," the letter said, "one commissioner noted that the recommendation could reduce outpatient margins at some hospitals to -20%, an amount that is unsustainable without affecting access to care."

The AAMC had petitioned MedPAC Chairman Glenn Hackbarth last week before the commission's final recommendation was issued.