The Medicare Payment Advisory Commission recommended increases in hospital and physician payments in 2009, but once again voted to reduce the adjustment for indirect medical education payments.
On hospital payments, MedPAC said Congress should increase payment rates for inpatient and outpatient services at the full rate of inflation in fiscal 2009. Commission staff did not provide a specific rate, although a marketbasket update of 3% is currently forecast for the coming fiscal year, according to MedPAC senior analyst Craig Lisk.
This recommended increase is significant, considering that Medicare hospital margins are the lowest theyve been in decades, said Carmela Coyle, senior vice president for policy with the American Hospital Association.
The commission also recommended reducing the indirect medical education adjustment by 1 percentage point in fiscal 2009, the same recommendation as last year. Coyle said teaching hospitals could potentially lose $900 million next year under this measure. MedPACs rationale is hospitals are getting overpaid for this adjustment, but the reality is teaching hospitals have the lowest financial performance of all hospitals in the U.S., Coyle told the commission.
Commissioners in the meantime voted to increase Medicare payments to physicians by 1.1% in 2009. While this would ward off a projected 5% cut under Medicares physician fee schedule formula next year, some physicians on the panel thought the proposed update would not be sufficient to protect businesses in the medical community. Although plus 1% is much better than negative 5%, it doesnt keep up with our costs, said commission member Ron Castellanos, a Florida urologist. -- by Jennifer Lubell
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