With Medicare beneficiaries' copayments for outpatient services rapidly rising, the Prospective Payment Assessment Commission last week recommended that the government fix flaws in the outpatient reimbursement scheme.
The recommendation was made public during a ProPAC meeting in Washington. The panel advises Congress on Medicare payment issues affecting hospitals and outpatient facilities.
Beneficiaries are supposed to be limited to a 20% copayment for all services. Under the existing outpatient reimbursement system, beneficiaries pay their share on the basis of hospitals' charges.
Medicare, however, pays its share on the basis of the lesser of hospitals' costs, charges or a blended fee. That reimbursement formula usually yields a lower total dollar figure, on which Medicare pays 80%.
ment for services, Medicare beneficiaries in 1993 ended up paying 48% of the total, said ProPAC analyst Julian Pettengill. And their share is expected to climb to 68% in 2000 if the reimbursement system isn't changed.
The overpayment problem is more pronounced in radiology, surgery and other diagnostic services, said Kathleen Buto, HCFA's associate administrator for policy. Charges for hospital office visits, in contrast, are closer to costs and are rising more slowly, so overpayment isn't as severe, Ms. Buto said.
Although a long-awaited outpatient prospective payment system could solve the problem, Mr. Pettengill said it won't be implemented soon enough to keep the overpayments from escalating. ProPAC therefore recommended that the federal government fix the reimbursement system.
In the past, ProPAC has called for beneficiaries' share to be limited to 20%. Last week it didn't make a specific suggestion, although it may do so when it makes a final recommendation in December.
One senior citizens advocate said she welcomed ProPAC's scrutiny of the outpatient reimbursement system.
Martha McSteen, president of the National Committee to Preserve Social Security and Medicare, cited a 1992 study that indicated beneficiary overpayments may have equaled as much as $1 billion in 1991. "It can only be worse (now), not better," she said.
In addition, ProPAC analysts presented reports indicating that when Medicare inpatient spending figures are adjusted for differences in wages and regional population factors affecting hospital costs, states that had the greatest number of hospital discharges per employee also had the highest costs per Medicare enrollee.
Those data were compiled as part of an analysis of Medicare spending patterns in hospitals, outpatient and long-term-care facilities, and other settings. The analysis should be presented to the commission in December.