The Medicare Payment Advisory Commission recommended last week that hospitals receive an inpatient payment update 0.4% less than inflation, a move that would save Medicare $1 billion to $5 billion over five years but frustrated hospitals wanting a full inflationary update.
MedPAC, which advises Congress on Medicare issues, recommended an outpatient update 0.9% less than the overall inflation rate.MedPAC also recommended expanding HHS' post-acute transfer policy to 13 additional DRGs in 2004, from the 10 DRGs subject to that policy now. The American Hospital Association is "totally opposed" to expanding the transfer provision, said Don May, the AHA's vice president of policy, because it undermines DRGs as the accepted reimbursement mechanism by paying hospitals less than the true cost of providing care before a patient is transferred from the acute-care setting to the post-acute setting.
For indirect medical education payments, MedPAC recommended no change in rates until they can study the issue more closely. MedPAC also recommended last week that Congress eliminate the annual inflation adjustment that skilled-nursing facilities receive. With those facilities posting losses of 2%, the additional cuts could have a negative impact on quality, according to the American Health Care Association, which primarily represents for-profit long-term-care providers.