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MedPAC Looks at Outpatient Payments

The question of whether Medicare should pay different rates for outpatient services delivered in different types of settings was very much on the minds of Medicare Payment Advisory Commission members during their public meetings last week.

The issue has been around for a while:  are there valid reasons for some facilities to be paid more for certain outpatient services than other facilities?  Or should the payment rate for a given service be the same regardless of where that service is delivered?  Does the site of the service matter – or should it?

At issue are Medicare payments made to private physician offices, hospital outpatient departments, and ambulatory surgical centers and whether they should be adjusted based on some of the underlying costs associated with those facilities or the matter of who owns them – or whether a service is a service that should be reimbursed at the same rate regardless of where it is delivered.  Underlying this issue is whether providers should be compensated for such services through Medicare’s outpatient prospective payment system or its physician fee schedule.

It matters where MedPAC ultimately comes down on this issue.  While the agency’s primary role is to advise Congress on Medicare payment issues, its views are highly respected in health policy circles and often find their way into new public policies.

Learn more about the issues involved and what MedPAC commissioners think about them in the MedPage Today article “Should Medicare Pay the Same Amount Regardless of Where a Service Is Provided?

Court Halts Medicare Site-Neutral Payment Changes

The Centers for Medicare & Medicaid Services did not have the authority to implement the site-neutral payment system for Medicare-covered outpatient services that it introduced last year, a federal court has concluded.

According to the court, CMS exceeded its authority because it

…was not authorized to ignore the statutory process for setting payment rates in the Outpatient Prospective Payment System and to lower payment rates only for certain services provided by certain providers.

In general, hospitals oppose the movement toward site-neutral payments and independent physician groups support it.

The court did not order CMS to reimburse affected physician practices for lost revenue.  Instead, it directed CMS to develop an appropriate remedy.

CMS is likely to appeal the ruling.

Meanwhile, CMS has proposed continuing its phase-in of the site-neutral payment policy in its proposed 2020 outpatient prospective payment system regulation that will take effect on January 1, 2020.  It is not clear how or if – the court ruling might affect CMS’s decision to move ahead with this proposal.

NASH opposed the 2019 change in a formal regulatory comment letter to CMS last year (see pages 2 and 3) on behalf of private safety-net hospitals and next week will submit another comment letter expressing the same view about year two of the proposed changes in Medicare outpatient payment policy.

Learn more about the case, the court decision, and what might happen next in the Healthcare Dive article “Hospitals score victory as judge tosses CMS site neutral rule.”