OIG presses CMS to cut hospital payments for surgeries on low-risk outpatients
Skip to main content
MDHC_Logotype_white
Subscribe
  • My Account
  • Login
  • Subscribe
  • News
    • This Week's News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • Intermountain, Trinity, Memorial Hermann behind $300M private equity fund
      CMS finalizes drug transparency, pharmacy quality rules
      More than 4M patients had data exposed in December-reported breaches
      MD Anderson wins appeal over $4.3M HIPAA penalty
    • Biden unveils $1.9T plan to stem virus and steady economy
      Nursing home staff COVID-19 vaccination: A work in progress
      California hospitals prepare ethical protocol to prioritize lifesaving care
      Expanded vaccine rollout in U.S. spawns a new set of problems
    • The Check Up: Trenda Ray
      The Check Up: Trenda Ray of the University of Arkansas for Medical Sciences
      Trenda Ray
      Q&A: Arkansas nursing leader looking for creative staffing solutions as COVID cases surge
      Cook Lydia 4x6_i.jpg
      Northeast Ohio health systems increase community benefit values in 2019
      Vaccine rollout hits snag as health workers balk at shots
    • CMS approves rule forcing insurers to ease prior authorization
      COVID-19 still a big uncertainty for insurers in 2021
      Health insurers' outlook boosted after Dems' Georgia win
      humana_i.jpg
      Humana supports Ohio not-for-profits with $500,000
    • CMS approves rule forcing insurers to ease prior authorization
      Verma: CMS tried to 'infuse' free-market competition across healthcare during Trump era
      CMS axes MFAR rule for good
    • Intermountain, Trinity, Memorial Hermann behind $300M private equity fund
      Operation Warp Speed to bump up McKesson's stock price
      Reporter's notebook: J.P. Morgan's 2021 health conference
      Hospitals, nursing homes get more time to file cost reports
    • 5 things to know about Google's $2.1B Fitbit acquisition
      Providence bets on machine-learning, consolidating data centers
      Mental health treatment was most common telehealth service during COVID
      Broad, Verily take Terra bioinformatics platform to Microsoft Azure cloud
    • Chance of COVID-19 triage care looms over Arizona hospitals
      U.S. ramps up vaccinations to get doses to more Americans
      367146427.jpg
      Should businesses mandate that staff get the COVID vaccine?
      71% of Americans surveyed by the Kaiser Family Foundation in December said they would definitely (41%) or probably (30%) get a vaccine if it were free and deemed safe by scientists. 27% of those surveyed said they would definitely (15%) or probably (12%) not get it.
      Data Points: Concerns linger over vaccines
    • Tower Health's finance chief resigning after years of steep losses
      AHRQ director Gopal Khanna resigns in response to Capitol riot
      Brigham president stepping down after Moderna controversy
      Dr. Kenneth Davis
      Mount Sinai CEO offers lessons from one of the nation's first COVID recovery clinics
    • Midwest
    • Northeast
    • South
    • West
  • Insights
    • ACA 10 Years After
    • Best Practices
    • InDepth Special Reports
    • Innovations
    • The Affordable Care Act after 10 years
    • New care model helps primary-care practices treat obesity
      doctor with patient
      COVID-19 treatment protocol developed in the field helps patients recover
      Rachel Wyatt
      Project to curb pressure injuries in hospitals shows promise
      Yale New Haven's COVID-19 nurse-staffing model has long-term benefits
    • Michellene Davis
      Healthcare leadership lacks the racial diversity needed to reduce health disparities
      Dr. James Hildreth
      How medical education can help fight racism
      Modern Healthcare InDepth: Breaking the bias that impedes better healthcare
      Videos: Healthcare industry executives describe their encounters with racism
      Quotes from rebadged employees
      Outsourcing IT, revenue cycle takes toll on internal culture
    • A woman with a wearable sensor talking to her provider.
      Wearable sensors help diagnose heart rhythm problems in West Virginia
      self service station
      COVID-19 pushes patient expectations toward self-service
      Targeting high-risk cancer patients with genetics
      A nurse holds up a phone with a message to a family member saying surgery has started.
      Texting, tablets help hospitals keep family updated on patient care
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Highmark Health inks six-year cloud, tech deal with Google
      Study: 1 in 5 patients report discrimination when getting healthcare
      HHS proposes changing HIPAA privacy rules
      Android health records app launches at 230 health systems
    • California hospitals prepare ethical protocol to prioritize lifesaving care
      Amazon, JPMorgan Chase, Berkshire Hathaway disband Haven
      Digital pathways poised to reshape healthcare continuum in 2021
      Healthcare was the hardest hit by supply shortages across all U.S. industries
    • A woman with a wearable sensor talking to her provider.
      Wearable sensors help diagnose heart rhythm problems in West Virginia
      New care model helps primary-care practices treat obesity
      How hospitals are building on COVID-19 telehealth momentum
      Researchers: Hospital price variation exacerbates health inequities
    • MedPAC votes to boost hospital payments, freeze or cut other providers
      Most Next Gen ACOs achieved bonuses in 2019
      Congress recalibrates Medicare Physician Fee Schedule after lobbying
      CMS approves rule to encourage value-based drug pricing
  • Data/Lists
    • Rankings/Lists
    • Interactive Databases
    • Data Points
    • Health Systems Financials
      Executive Compensation
      Physician Compensation
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Wellstar CEO calls adapting for the pandemic her bold move
      Howard P. Kern
      Recognizing the value of telehealth in its infancy
      Dr. Stephen Markovich
      A bold move helped take him from family doctor to OhioHealth CEO
      Dr. Bruce Siegel
      Why taking a hospital not-for-profit was Dr. Bruce Siegel’s boldest move
    • Barry Ostrowsky
      Ending racism is a journey taken together; the starting point must be now
      Laura Lee Hall and Gary Puckrein
      Increased flu vaccination has never been more important for communities of color
      John Daniels Jr.
      Health equity: Making the journey from buzzword to reality
      Mark C. Clement and David Cook
      We all need to 'do something' to fight inequities and get healthcare right, for every patient, every time
    • Healing healthcare: some ideas for triage by the new Congress, administration
      Dr. Sachin H. Jain
      Medicare for All? The better route to universal coverage would be Medicare Advantage for All
      Connectivity: a social determinant of health that can exacerbate all the others
      Taking my shot at building trust
    • Letters: Eliminating bias in healthcare needs to be ‘deliberate and organic’
      Letters: Maybe dropping out of ACOs is a good thing for patients
      Letters: White House and Congress share blame for lack of national COVID strategy
      Letters: VA making strides to improve state veterans home inspections
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Award Programs
    • Nominate
    • Previous Award Programs
    • Other Award Programs
    • Best Places to Work in Healthcare Logo for Navigation
      Nominations Open - Best Places to Work in Healthcare
      Nominations Open - Health Care Hall of Fame
      Nominations Open - 50 Most Influential Clinical Executives
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Top 25 Minority Leaders
    • Top 25 Women Leaders
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • COVID-19 Event Tracker
    • Leadership Symposium
    • Healthcare Transformation Summit
    • Women Leaders in Healthcare Conference
    • Workplace of the Future Conference
    • Strategic Marketing Conference
    • Social Determinants of Health Symposium
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Minority Leaders Gala (2022)
    • Top 25 Women Leaders Gala
  • Listen
    • Podcast - Next Up
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
    • Carter Dredge
      Next Up Podcast: Ready, set, innovate! Innovation and disruption in healthcare
      Next Up Podcast: COVID-19, social determinants highlight health inequities — what next?
      Ceci Connolly
      Next Up Podcast: How to navigate the murky post-election waters
      Next Up Podcast: Saving Rural Health
    • An older man wearing a mask receiving a vaccine.
      Beyond the Byline: Verifying information on the chaotic COVID-19 vaccine rollout
      doctor burnout
      Beyond the Byline: How healthcare supply chain struggles contribute to employee burnout
      Beyond the Byline: Covering race and diversity in the healthcare industry
      Beyond the Byline: How telehealth utilization has impacted investor-owned company earnings
    • Leading intention promote diversity and inclusion
      Introducing Healthcare Insider Podcast
    • The Check Up: Trenda Ray
      The Check Up: Trenda Ray of the University of Arkansas for Medical Sciences
      The Check Up: Dr. Kenneth Davis
      The Check Up: Dr. Kenneth Davis of Mount Sinai Health System
      The Check Up: Dr. Thomas McGinn
      The Check Up: Dr. Thomas McGinn of CommonSpirit Health
      The Check Up: Mark Ganz
      The Check Up: Mark Ganz of Cambia Health Solutions
    • Video: Ivana Naeymi Rad of Intelligent Medical Objects
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Providers
March 17, 2015 01:00 AM

OIG presses CMS to cut hospital payments for surgeries on low-risk outpatients

Lisa Schencker
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    Story updated at 11:35 a.m. EDT

    HHS' Office of Inspector General is using a congressionally mandated report to repeat its call for Medicare to pay hospitals the same as it pays ambulatory surgery centers for procedures on low-risk patients.

    But the CMS and hospital trade groups think the OIG is on the wrong track. Even the national association representing ASCs is wary.

    The policy change could save $15 billion over six years, the OIG estimates, but would require legislation allowing the CMS to cut the rates for low-risk surgeries without having to increase other payment rates to make the policy change budget-neutral as required by law.

    The recommendation is by far the biggest-ticket item in the OIG's annual list of the top 25 recommendations that HHS has not carried out. Medicare beneficiaries would save between $2 billion and $4 billion in reduced copayments if Medicare changed the policy, the OIG said. The agency's Compendium of Unimplemented Recommendations (PDF) was published Tuesday.

    The OIG first made the recommendation regarding payment rates for low-risk surgeries in April 2014. The CMS, however, declined to take the idea to Congress, noting in a written response to the OIG that President Barack Obama did not seek such legislation in his budget request.

    The CMS also said the idea "may raise circularity concerns" because ASC rates are based on a conversion factor from the outpatient prospective payment system for hospitals.

    Lowering those outpatient rates, that is, could affect the surgical center rates and create a kind of downward spiral.

    Finally, the CMS said, the inspector general's report failed to offer clinical criteria to distinguish which patients could be treated in ASCs rather than hospital outpatient settings.

    The proposal has drawn the ire of hospitals.

    Community hospitals have argued that smaller surgical facilities that specialize in same-day surgeries are “cherry-picking” the easiest, most profitable procedures that larger hospitals depend on to balance out the money they lose operating emergency departments and other expensive programs and staying open 24/7.

    “If we want the clinical capabilities of hospitals in this country you can't pay an ASC or doctor's office rate,” said Erik Rasmussen, the American Hospital Association's vice president for legislative affairs. “You can't expect to have hospital-level care and pay two-thirds or one-third of what those payments are.”

    Hospitals already have, on average, a negative 12.4% margin for outpatient surgeries, Rasmussen said, citing the most recent figures from the Medicare Payment Advisory Commission.

    Steven Speil, executive vice president for health finance and policy with the Federation of American Hospitals, called the recommendation a “short-sighted” proposal that would have “devastating” consequences for hospitals and their patients.

    “The proposal ignores fundamental functional and cost structure differences between hospitals and ASCs and could undermine the ability of hospitals to provide essential community services,” Speil said.

    Ambulatory Surgery Center Association CEO William Prentice didn't exactly praise the proposal.

    “Clearly, ASCs can save the Medicare program billions of dollars through better payment policies,” Prentice said in a statement. “With regard to the OIG site-neutral recommendation, the devil is in the details. Determining the correct reimbursement across settings that can assure both quality and access will require time and attention.”

    Prentice said the CMS should focus on ending the disparity between the rates that is caused by the CMS using different measures of inflation to update payment rates each year, an issue he said would be addressed in legislation that will be introduced in Congress soon.

    Now, on average, Medicare reimburses ASCs at 55% of the amount paid to hospital outpatient departments, according to the ambulatory association.

    In 2008, Congress expanded the number of services covered by Medicare at ambulatory centers.

    The OIG acknowledges that not all procedures can be performed in an ambulatory setting because of risks to certain patients. But the report cites federal data indicating that 68% of hospital patients age 65 and older in 2010 were considered to either have no-risk medical profiles or to be at low-risk for procedures performed in an ambulatory setting.

    The OIG said the CMS is in the best position to resolve the barriers the agency described in its response. The CMS also has the authority to develop legislative proposals and has done so in the past with regard to OIG recommendations.

    “Considering the potential savings identified in our report, we maintain that CMS should take the necessary steps to implement our recommendations,” the April OIG report concluded.

    Among other recommendations in the report, OIG urges the CMS to review the claims of clinicians whose Medicare payments exceed a certain amount to help identify possible improper payments. About 2% of clinicians, the report notes, were responsible for nearly 25% of all Part B payments between 2008 and 2011.

    Follow Lisa Schencker on Twitter: @lschencker

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    The Check Up: Trenda Ray of the University of Arkansas for Medical Sciences
    The Check Up: Trenda Ray of the University of Arkansas for Medical Sciences
    Q&A: Arkansas nursing leader looking for creative staffing solutions as COVID cases surge
    Q&A: Arkansas nursing leader looking for creative staffing solutions as COVID cases surge
    Sponsored Content
    Get Free Newsletters

    Sign up for free enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today

    The weekly magazine, websites, research and databases provide a powerful and all-encompassing industry presence. We help you make informed business decisions and lead your organizations to success.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Stay Connected

    Join the conversation with Modern Healthcare through our social media pages

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Insights
      • ACA 10 Years After
      • Best Practices
      • InDepth Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Interactive Databases
      • Data Points
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Top 25 Minority Leaders
        • Top 25 Women Leaders
      • Nominate
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Leadership Symposium
        • Healthcare Transformation Summit
        • Women Leaders in Healthcare Conference
        • Workplace of the Future Conference
        • Strategic Marketing Conference
        • Social Determinants of Health Symposium
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Minority Leaders Gala (2022)
        • Top 25 Women Leaders Gala
      • Webinars
      • COVID-19 Event Tracker
    • Listen
      • Podcast - Next Up
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing