The 0.7% increase for hospital Medicare inpatient payments in 1999 called for by the balanced-budget law is probably too generous, according to the Medicare Payment Advisory Commission, which met Friday. The congressional advisory panel said that primarily because of changes in hospital discharge patterns, the 0.7% increase could be significantly overstated. According to MedPAC estimates, hospital Medicare inpatient margins will average about 13% in 1999 even after payments were frozen in 1998. The congressional advisory panel also recommended that Medicare capital rates either be frozen or increase no more than 0.7% next year. The capital rate is determined by the HHS secretary, not by Congress.
Wholesale prices for acute-care hospital services rose 0.1% last month and were up just 0.3% for the 12-month period ended in November, according to the U.S. Labor Department's Producer Price Index released Friday. The PPI measures changes in net revenues per episode of care. Wholesale prices for physician services, meanwhile, jumped 0.3% last month and were up 1.5% for the 12-month period ended in November.
The Medicare Payment Advisory Commission may recommend a new baseline for reimbursing hospitals' direct costs for operating teaching programs, the panel indicated at its meeting Friday. Hospitals are reimbursed for such costs as salaries for residents and faculty based on 1984 per-resident costs, updated for inflation. In 1995 some hospitals received less than $10,000 per resident while others got more than $245,000. Medicare was projected to spend $2.5 billion on direct graduate medical education costs in fiscal 1997, which ended Sept. 30.
House Democrats last week named Reps. John Dingell (D-Mich.) and Jim McDermott (D-Wash.) to the bipartisan commission on the future of Medicare, leaving only the chair of the 17-member panel unnamed. President Clinton and GOP leaders have yet to agree on a chair, GOP sources said, but Sen. John Breaux (D-La.) remains the leading choice. McDermott, a psychiatrist, is the third physician legislator named to the commission. Nine members of Congress have been named to the panel.
Federal healthcare investigations resulted in repayment and fines of $1.2 billion for improper Medicare reimbursements in fiscal 1997, which ended Sept. 30, according to a semi-annual report released late last week by HHS' inspector general's office. In addition to the reimbursements, investigators stopped payment on $125 million in questionable costs. More than 2,700 providers were excluded from the Medicare program during the fiscal year, nearly double the previous year, the report said. No breakdown of providers was given. HHS Inspector General June Gibbs Brown attributed the increase in reimbursements and program exclusions to increased funding of the agency's fraud-fighting efforts. The inspector general's office had a total budget of $75 million in fiscal 1996 and $95 million in 1997.
Thirty-one hospitals in California had significantly worse than average mortality rates treating heart attack patients, says a study to be released Dec. 15 by the California Office of Statewide Health Planning and Development. OSHPD, the state agency that collects hospital data, studied the mortality of heart attack patients within 30 days of being admitted to 418 hospitals between 1991 and 1993. During that period, 5,272 patients died out of 116,174 treated.
A California government task force was set to vote Friday on a plan to create a new state agency to regulate managed-care plans. One proposal called for a five-member appointed board headed by "a person of stature in the health services field, " while another called for an agency led by a single appointed individual. Currently, HMOs are regulated by the California Department of Corporations. Another alternative was for the new agency to regulate not only health plans but also medical groups and indemnity insurers. The task force's final recommendations are due next month.
The most important criteria for being selected to be a member of a not-for-profit hospital's governing board is having values consistent with the hospital, according to a report on hospital governance released late last week by the American Hospital Association and Ernst & Young. The report, based on a survey of nearly 2,100 hospitals, said the least important criteria for being on the board was knowledge of the insurance industry.