PPI growth in March slower than average

The acute-care hospital Producer Price Index, one federal measure of inflation, increased 0.1% last month, preliminary figures show, slightly slower than the 0.2% average monthly growth during the prior year.

The Producer Price Index, released by the Bureau of Labor Statistics, includes reimbursement rates paid to hospitals. The acute-care hospital index jumped 0.7% in February, the largest one-month increase since October 2011. Last month's more modest growth was identical to the 0.1% increase in March 2011. For the year that ended last month, the acute-care hospital index increased 2.6% compared with a 2.3% gain the prior 12 months.

The one-month change to the physician office Producer Price Index declined for the fourth time in the last year in March. Physician office prices dropped 0.7% last month after a 0.2% increase in February.

For March 2011, the physician Producer Price Index increased 0.1%.

For the year that ended in March, physician prices decelerated sharply. During the 12-month period, the physician office Producer Price Index increased 0.2%. That's the slowest 12-month growth captured by the index since the year that ended with February 2003. By comparison, the Producer Price Index for physician services increased 1.5% for the year that ended in March 2011.

The slower price growth reflects recent changes to CMS physician reimbursement, according to Producer Price staff with the labor bureau.

Last July, the CMS reduced some physician payments by 25% under the multiple procedure payment reduction program, according to the agency's analysts. The cuts affected some diagnostic imaging by doctors at critical-access hospitals. In January, the CMS cut by 25% reimbursement for diagnostic cardiology, ophthalmology and certain interventional radiology physician procedures.

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