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MedPAC considers update, site-neutral payment recommendations for 2015

December 12, 2013

The Medicare Payment Advisory Commission today considered a package of draft recommendations to Congress that would affect the inpatient, outpatient and long-term care hospital prospective payment systems. These draft recommendations would increase payment rates for the hospital inpatient and outpatient prospective payment systems by 3.2% in 2015, reduce or eliminate payment differences between hospital outpatient departments and physician offices for selected procedures, and pay LTCHs the same rates as general acute-care hospitals for cases involving patients who are not deemed “chronically critically ill” by having an intensive care unit stay of at least eight days. The savings realized by cutting payments to LTCHs would be redistributed to create a new outlier pool for CCI cases treated in inpatient PPS hospitals. The commission also considered a draft recommendation that would freeze Medicare payments to physicians in 2015 in place of the sustainable growth rate formula. “The AHA appreciates MedPAC’s recognition that Medicare payments to general acute-care hospitals are well below the costs of care, warranting a sizeable update to inpatient and outpatient payment rates,” said Joanna Hiatt Kim, AHA vice president of payment policy. “However, we are deeply disturbed by the Commission’s draft recommendation to cut payments to 64% of LTCH cases; the discussion focused solely on payment rates, lacking any dialogue about the financial impact on LTCHs or, most importantly, potential consequences on beneficiary access to the high-quality, specialized care that LTCHs provide.”