Medicare would gain more authority to recoup overpayments from providers under a new outlier policy proposed by the Centers for Medicare and Medicaid Services.
Outlier payments, which compensate hospitals for especially expensive cases, are at the center of a federal investigation of Tenet Healthcare Corp., Santa Barbara, Calif. (Jan. 6, p. 4).
The proposed rule would allow Medicare to use more recent data to calculate outlier payments, but the agency did not provide additional detail on that provision before deadline.
The amount by which the cost of a case must exceed the standard Medicare DRG rate to qualify for an outlier payment would not change. Regulators could still change that threshold after a 30-day public comment period that starts after the regulation is published in the Federal Register, expected early this week.
The possibility that the CMS would impose new limits on outliers without lowering the threshold worried the American Hospital Association. The AHA said the threshold should be lowered to $22,000 to $25,000 from its current $33,560 to prevent the CMS' new scrutiny of the payments from reducing the amount hospitals on the whole receive to treat expensive cases.
House Ways and Means Committee Chairman Bill Thomas (R-Calif.) agreed with the AHA's position last week, arguing in a letter to CMS Administrator Tom Scully that the CMS should lower the threshold in favor of hospitals that genuinely qualify for outlier payments but haven't received a sufficient share of them.
In a written statement last week, Scully said his proposed policy would "achieve a balance between paying hospitals fairly for high-cost cases and limiting outlier payments to the 5% to 6% of total inpatient spending that Congress mandated."