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MedPAC considers documentation and coding cut for FY 2014

December 6, 2012

The Medicare Payment Advisory Commission today considered a draft recommendation to Congress that would increase 2014 inpatient and outpatient hospital payments by 1%. The recommendation is below the update in current law and includes a 0.8% documentation and coding cut for inpatient services. The Centers for Medicare & Medicaid Services has already cut hospital payments many times to offset changes stemming from the introduction of a better coding system in 2008. "We fundamentally disagree with the assertion that hospitals have continued to benefit from documentation and coding cuts years after the switch to MS-DRGs," said Caroline Steinberg, AHA vice president of trends analysis. "There are real increases in patient severity linked to trends in obesity, growing shares of patients with multiple chronic diseases, and more patients dually eligible for Medicare and Medicaid. These trends need to be recognized in reimbursements. Plain and simple:  today's hospital patients are sicker." MedPAC indicated that hospital margins fell considerably in 2011 - to negative 4.0% for inpatient services, negative 11.0% for outpatient services, and negative 5.8% for overall Medicare services. The commission also considered a draft recommendation that would increase Medicare payments to ambulatory surgical centers by 0.5% in 2014. The recommendations may be revised before the commission votes on them in January.