A draft recommendation by the Medicare Payment Advisory Commission urges Congress to set a full-inflation update for hospital inpatient and outpatient payments in 2005. The new Medicare reform law, however, already establishes inpatient updates through 2007, setting the 2004 update at full inflation and tying updates for the remaining years to participation in a voluntary quality initiative. Hospitals that submit quality data to the CMS will receive a full-inflation inpatient update, while those that don't will receive an increase equal to inflation minus 0.4 percentage points. The Medicare law doesn't set updates for outpatient payments, except in the case of some rural facilities. -- by Tony Fong
MedPAC backs full-inflation update in 2005
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