The Medicare Payment Advisory Commission recommended increasing payment rates for inpatient and outpatient hospital services at the full rate of inflation in 2010 concurrent with the implementation of a quality incentives program.
MedPACs recommendation didnt provide a specific increase for hospitals, although the projected marketbasket update in 2010 for hospitals is expected to be 2.7%, according to MedPAC staff. All of the commissions payment update recommendations for 2010 are scheduled to appear in MedPACs March report to Congress.
Commission Chairman Glenn Hackbarth clarified that the payment recommendation reflects the full marketbasket update minus what goes into pay-for-performance. In other words, hospitals will have to perform well on quality measures to get the full update, he said.
The commission also made a recommendation to reduce the indirect medical education adjustment by 1 percentage point to help finance the quality incentives program for hospitals. According to MedPAC staff, this adjustment would provide roughly $1 billion for pay-for-performance measures. For other Medicare services, the commission called on Congress to update payments for physician services by 1.1% in 2010, and approved language that would essentially redistribute relative value units for expensive imaging services to other physician services under Medicare.