MedPAC Wants to Give Hospitals and Doctors Raises, Flag Offsite ER Claims

January 12, 2017 - The Medicare Payment Advisory Commission wants hospitals and doctors to get raises in 2018. Ambulatory surgery centers, skilled-nursing facilities and inpatient rehabilitation facilities should get no increases because they're already making plenty of money.

MedPAC also unanimously agrees that all services provided at off-site emergency departments should be flagged by a modifier on claims.

MedPAC commissioners Thursday unanimously approved recommendations that Medicare boost payments for hospital inpatient and outpatient services in 2018 as outlined under current law, which is an estimated at 1.85%. Physicians would receive 0.5%.

The panel again said ambulatory surgery centers in 2018 did not need raises, arguing those outpatient facilities appear to be financially healthy. In 2015, those facilities saw 3.4 million Medicare beneficiaries at a cost of $4.1 billion.

MedPAC similarly thought skilled-nursing facilities, hospices and long-term-care hospitals don't need higher rates. The group suggested modest cuts for home-health agencies and inpatient rehabilitation facilities since both groups of providers have profit margins ranging from 18% to 41.5%. MedPAC says inpatient rehabilitation facilities see Medicare payments substantially exceed the costs of care.

In recent years, Congress has oddly rejected MedPAC's recommendations regarding post-acute settings. And on Thursday, MedPAC revealed that Medicare would have saved $11 billion between 2009 and 2016 had Congress implemented its suggestions for home health and SNF settings.

Congress considered the panel non-partisan, unlike its counterpart, the Medicaid and CHIP Payment and Access Commission.

MedPAC's rationale behind the modifier flagging off-site ER claims is to determine whether off-site ERs are unfairly benefiting from an exemption to the site-neutral payment law since Medicare generally pays more for services performed in an ER that in other settings. The site-neutral law exempted stand-alone ERs to ensure access to care.

Claims to the CMS are currently submitted in bulk.

There 363 off-campus ERs affiliated with hospitals and about 200 independent ERs, but those facilities can't bill Medicare unless they are teamed up with providers. MedPAC believes about 400 off-site ERs now are billing Medicare.

Groups like the American Hospital Association and the Association of American Medical Colleges support the idea of a modifier as long as it's not too difficult to implement.

But both industry stakeholders and America's Essential Hospitals, which represents the nation's safety net hospitals, oppose the data being used to repeal the off-site ER exemption.

"Congress statutorily carved out free-standing emergency departments from the payment cuts because lawmakers understood the harm to access that could result in communities across the country," said Erin O'Malley, director of policy at America's Essential Hospitals.

"That potential harm is no less a threat today than when the law passed, and would come on top of the reduced access to care we believe the other outpatient department cuts will cause."

By: Virgil Dickson
Posted on ModernHealthcare

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