While Congress may heed an advisory panel's plea to reject HHS' plan for a prospective payment system for Medicare hospital outpatient services, some form of such a plan is likely to be adopted this year.
In March, HHS released its long-awaited outpatient PPS proposal thatMedicare
would have implemented the new system in increments over an unspecified period of time beginning with surgery and radiology services in 1996.
According to HCFA, the proposal would reduce payments to hospitals by more than $20 billion over a seven-year period.
The Congressional Budget Office projects that hospital outpatient payments will total nearly $15 billion this year and that, without any changes, they will rise by about 14% annually through the year 2000.
But a report released late last month by the Prospective Payment Assessment Commission, which advises Congress on Medicare Part A issues, recommends that the "outpatient prospective payment system proposed by (HHS Secretary Donna Shalala) should not be enacted."
ProPAC's primary concern is that implementing the plan over time would unfairly penalize hospitals that would have to bear the cost of moving to a new system without receiving any benefit from it.
The advisory panel also argues that the system proposed by HHS would do little to control the volume of outpatient services.
To alleviate that problem, ProPAC recommends that a system of incentives be implemented under which hospitals would be rewarded for meeting preset volume targets or penalized for overages. Such incentives already exist in the Medicare physician payment system.
Hospital groups, which were opposed to implementing the plan on a piecemeal basis, applauded the ProPAC report.
Members of Congress say some form of prospective payment for outpatient services will be necessary to achieve the $270 billion in spending reductions over seven years called for in the GOP budget.
A leaked draft of the GOP Medicare reform plan called for moving toward use of ambulatory patient groups, which is a publicly available billing and data system.
Hospitals have opposed implementing such a system, which they say adds an unnecessary amount of paperwork.