Hospitals are livid about the Obama administration's plans to eliminate their Medicare payments for services at new off-campus outpatient departments, saying it ignores the intent of Congress and will limit access to care.
Under an outpatient payment rule proposed last week for 2017, Medicare would not pay hospitals for most services provided at off-campus departments that started billing Medicare after Nov. 2, 2015. Instead, physicians would be paid for services there at an enhanced rate. And off-campus departments that were already billing Medicare as of that date would not be paid for any services they add. They also would be cut off from all payments if the facility is relocated or expanded.
Joanna Hiatt Kim, vice president of payment policy at the American Hospital Association, said the proposal is not sustainable for hospitals and would have a “hugely negative impact on access to care.”
Beth Feldpush, senior vice president for policy and advocacy at America's Essential Hospitals, which represents safety net hospitals, said outpatient departments in rural areas may not be able to open under the new payment arrangement. Underserved communities often receive primary care from community health centers but rely on hospitals for specialists, she said.
Also, hospitals building in these areas need to be able to relocate or change their services to continue meeting the needs of the community, Feldpush added. CMS officials, she said, “are ignoring the reality that nothing in healthcare is static and hospitals need to be able to evolve.”
CMS officials had no immediate response to requests for comment.
Congress called for the so-called site-neutral payments in the Bipartisan Budget Act of 2015. But the hospital organizations say the way the CMS plans to carry out the provision violates what the law actually says. The legislation states that new off-campus departments should be paid “under the applicable payment system.” While some analysts thought it was possible the CMS might interpret that to mean the physician fee schedule, they also thought the agency might choose the fee schedule Medicare uses for ambulatory surgery centers.