Citing the growing consolidation of hospitals and physician practices and the higher rates Medicare pays for care delivered in hospital outpatient departments, the U.S. Government Accountability Office (GAO) has recommended that Congress

…consider directing the Secretary of the Department of Health and Human Services to equalize payment rates between settings for E/M [evaluation and management] office visits…

gaoThe recommendation comes after a GAO study that documented the increase in “vertical consolidation” between hospitals and physician practices in recent years and the increased costs for outpatient services this leads to for the Medicare program. The GAO report notes that “Such excess payments are inconsistent with Medicare’s role as an efficient purchaser of health care services.” It also notes that Medicare lacks the statutory authority to make such changes on its own.

For a closer look at this issue and why it is commanding the attention of the GAO and others, go here to see the GAO report Increasing Hospital-Physician Consolidation Highlights Need for Payment Reform.