Medicare will pay ambulatory surgery centers at 65% of the hospital outpatient department ratewith some exceptionsunder a final rule issued by the CMS. The move follows through on its original plan unveiled in July (July 23, p. 6). While some centers may benefit under the rule, othersparticularly single-specialty ASCs that specialize in gastroenterologyare expected to experience drastic cuts in payments, according to Kathy Bryant, president of ASC trade association FASA. For certain procedures, however, the 65% rate wont apply. Bryant said that ASCs would actually be getting paid more than the 65% rate for 45 device-intensive procedures, but less for 365 procedures frequently performed in physicians offices. In addition, 3,390 procedures will be payable in the ASC setting in 2008, an increase of 819 over the number currently payable in ASCs. In general, the final rule updates the hospital outpatient prospective payment system in 2008. Under the rule, hospitals would receive an overall increase in Medicare payments in 2008 to $36 billion from $32.7 billion this year.
As expected, the CMS unveiled a plan to cut physician reimbursements by close to 10% in 2008, prompting a sharp reaction from the American Medical Association. The AMA urged Congress to provide payment increases for physicians instead. The cut is bad news for Americas seniors, as 60% of physicians say the cut will force them to limit the number of new Medicare patients they can treat, according to a written statement from Edward Langston, the AMAs board chairman. Congress must step in to replace the cut with payment increases that keeps up with medical practice costs. It is widely expected that lawmakers will again step in and reverse the cut. The Medicare payments would total approximately $58.9 billion, going to 900,000 physicians and other healthcare professionals. The sustainable growth rate formula, or SGR, which is tied to the health of the economy and is used to calculate physician payments under the Medicare program, is the force driving the projected cut. It has been estimated that payments will drop by more than 40% by 2015 under the SGR. (See related story, p. 34.)
The American Hospital Association called on President Bush to sign newly revised legislation the Senate approved to reauthorize the State Childrens Health Insurance Program. The Senate voted 64-30 to approve the bill, nearly a week after its passage in the House. Bush vetoed a slightly different version of the bill in early October, and he said he would veto this version as well. There were not enough votes in the House to override a presidential veto. The bill would fund the program at $35 billion above the current baseline of $25 billion over five years using tobacco tax money as a funding source, but would phase childless adults out of the program within one year instead of two and take more steps to prevent substitution of SCHIP coverage for private coverage. The bill also would set income eligibility at up to 300% of the federal poverty level, just over $60,000 for a family of four based on 2007 guidelines.
Prime Healthcare Services, Victorville, Calif., announced a Los Angeles-area hospital deal as one of its former purchase targets, 224-bed Anaheim (Calif.) Memorial Medical Center, announced a new suitor. Prime, owned by physician Prem Reddy, said it has acquired 369-bed Centinela Freeman Regional Medical Center, Inglewood, Calif., from for-profit Centinela Freeman HealthSystem. Centinela Freeman was formed to buy three hospitals in the area from Tenet Healthcare Corp. in 2004. The system will continue to operate its campus in Marina del Rey, Calif., and also will retain ownership of the Memorial campus in Inglewood, which is in the process of shifting acute-care services to the Centinela campus, said Centinela Freeman spokeswoman Deborah Ettinger. Meanwhile, Anaheim Memorials parent, Memorial Health Services, announced that it has agreed to sell the hospital to Integrated Healthcare Holdings, Costa Mesa, Calif., for $68 million and a capital commitment of nearly $28.8 million. Primes $55 million bid to buy the hospital ended in July after the California attorney generals office denied approval for the sale and conversion of the hospital into a for-profit. Privately held Integrated will need to secure the approval of the attorney general.
Fiserv said it signed a definitive agreement to sell substantially all of its healthcare businesses, including several managed-care and prescription benefits management companies to Minnetonka, Minn.-based UnitedHealthcare, a subsidiary of UnitedHealth Group, for $775 million in cash. The Brookfield, Wis.-based information technology company said in a news release that the sale will allow it to focus on its products in the financial services industry, including healthcare banking and payment. The sale is expected to close late this year or in the first three months of 2008.
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