Hospitals didn’t get all they wanted in last week’s Medicare Payment Advisory Commission proposal, but they could see a reimbursement increase next year for inpatient and outpatient services if Congress approves the suggestions.
MedPAC votes for 1% update
Hospitals question adjustment for overpayments
MedPAC Chairman Glenn Hackbarth began the commission’s two-day public meeting in Washington by saying that last year’s Patient Protection and Affordable Care Act did not change the advisory body’s mandate.
“It provides a formula for 10 years,” Hackbarth said of the Affordable Care Act. “But it in no way alters MedPAC’s charge. Our responsibility is to make recommendations for the next fiscal year.”
MedPAC is proposing that Congress increase payment rates for both the hospital inpatient and outpatient prospective payment systems by 1% in fiscal 2012. It also recommends that Congress require HHS to adjust inpatient payment rates in future years to fully recover all overpayments resulting from documentation and coding changes.
The latter issue has been a contentious one for the nation’s hospitals, which have faulted the methodology that both the CMS and MedPAC used to calculate the documentation and coding adjustment.
The adjustment occurred after the CMS phased in Medicare-severity diagnosis-related groups between 2007 and 2009. MedPAC accounted for this adjustment in recommending the 1% update, rather than recommending the full marketbasket update, which is forecast to be 2.5% without the adjustment for documentation and coding. Hospital groups had advocated adopting the full marketbasket adjustment.
“We continue to disagree with MedPAC and CMS about the size of the coding cut,” said Joanna Kim, senior associate director for policy at the American Hospital Association. “But we are pleased that the productivity cuts are not warranted at the time,” she said, referring to MedPAC’s recommendation that there be no productivity and budget adjustments in determining the update for hospitals. Similar to the AHA, the Federation of American Hospitals would like to see MedPAC and the CMS use a different method to adjust for improvements in documentation and coding.
“The industry has done a lot of technical work on this MS-DRG issue, and we think an adjustment should not be made for it,” said Chip Kahn, president and CEO of the FAH. “And if there is one, it should be a lot lower than the one calculated by CMS.”
In assessing payment for physicians and other health professional services, MedPAC is proposing a 1% update for 2012 to the physician fee schedule.
Cristina Boccuti, a principal policy analyst at MedPAC, presented this draft recommendation and acknowledged the “mounting frustration” from
providers and their patients about the temporary fixes and looming cuts as a result of the sustainable growth-rate payment system.
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