Members of Congress should think twice about extending exceptions to the Medicare program's payment rules because they are costly, undermine the integrity of payments systems, and could worsen the incentives in the program's fee-for-service payment systems to drive up volume, according to a former Government Accountability Office analyst who testified Wednesday on Capitol Hill.
Health panel hears pros, cons of extending payment exceptions
Bruce Steinwald, now an independent consultant who serves on committees at the Institute of Medicine and the National Quality Forum, called himself the “skunk at the picnic” at a House Ways and Means Health Subcommittee hearing to examine whether Congress should spend roughly $2.3 billion to reauthorize a host of Medicare provider payments.
Included among those is the hospital inpatient Section 508 wage reclassification, which is set to expire Oct. 1; the geographic work-payment floor for physician fee schedule services and hospital outpatient hold harmless payments, both scheduled to expire on Jan. 1; and hold-harmless payments for clinical laboratory services offered in rural hospitals that will expire on July 1, 2012.
American Hospital Association President Richard Umbdenstock testified before the panel about a number of payments the AHA would like to see extended and underscored three in particular: the section 508 wage reclassifications; the outpatient hold-harmless payments for small rural hospitals and sole community hospitals; and reasonable cost-based payment for outpatient clinical lab tests in small hospitals in rural areas.
“We put forth what we think are the legitimate needs of these extenders and they've been approved year over year and shown even at that, hospitals are still struggling, especially those in the rural areas,” Umbdenstock told Modern Healthcare after the hearing, when asked for his reactions to Steinwald's testimony. “So as far as we're concerned, these are essential elements in the payment system.”
Focusing on these several extended payments ignores the real problem of a broken Medicare physician payment system, according to hearing witness Dr. Robert Wah, chairman of the American Medical Association board of trustees. Wah likened the problem to a leaky boat. “All of the patches we have to maintain because we can't just pull them all off at this point because the boat is too leaky,” Wah said. “What we need is a new boat.”
Subcommittee Chairman Wally Herger (R-Calif.) said the information gleaned from the hearing will be a “good starting point from which to further assess each of these expiring provisions before the end of the year.”
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