The CMS said it expects to refine DRGs to recognize differences in patient severity between general acute-care and specialty hospitals and will review specific DRGs, in cardiac and orthopedic care, for example, that may be overpaid. In its special report to Congress, the agency did not explicitly recommend extending a temporary ban on physician self-referral to new specialty hospitals but said the changes it hoped to make could take six months. That, in effect, will extend the moratorium, now set to expire June 8. The CMS also said it found patient satisfaction was better at specialty hospitals overall and that heart hospitals had lower rates of complications and mortality than general hospitals. There was not enough data to evaluate complication and mortality rates at orthopedic and surgical hospitals, the agency said.
Meanwhile, several lawmakers at a House subcommittee hearing said they opposed extending the moratorium, and Energy and Commerce Committee Chairman Rep. Joe Barton (R-Texas) said he would not allow his committee to approve any bill that would do so. Legislation introduced in the Senate on Wednesday would make the moratorium permanent by excluding specialty hospitals from the whole-hospital exemption in physician self-referral law. A companion bill has not been introduced in the House.
The CMS also promised to bring Medicare payments to ambulatory surgical centers closer to the level of payments to hospital outpatient centers by January 2008, saying some orthopedic and surgical facilities may be designating themselves as specialty hospitals to obtain higher rates. The agency said it will review existing specialty hospitals and terminate Medicare provider agreements with those that do not meet the statutory definition of a hospital because they perform so high a percentage of outpatient procedures. Read the report. -- by Tony Fong