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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?

MedPAC Issues 2018 Report to Congress

The non-partisan legislative branch agency that advises Congress and the administration on Medicare payment policies has submitted its mandatory annual report to Congress.

Among the findings included in the report by the Medicare Payment Advisory Commission are:

  • Medicare’s hospital readmissions reduction program has not resulted in increases in emergency room visits or hospital observation stays.
  • Many Medicare accountable care organizations, while maintaining or improving quality, are producing more modest savings than predicted.
  • MedPAC approves of Medicare’s proposals to redesign the case-mix classification system for skilled nursing facilities.
  • MedPAC supports changes Medicare has proposed for patient assessment and therapy requirements for skilled nursing facilities.

MedPAC’s recommendations include:

  • Authorizing outpatient-only hospitals in isolated rural communities to ensure access to emergency care.
  • Reducing payments to off-campus emergency departments in certain urban areas.
  • Rebalancing Medicare’s physician fee schedule to increase payments for ambulatory evaluation and management services while reducing payments for procedures, imaging, and tests.
  • Paying for sequential stays in a unified prospective payment system for post-acute care.
  • Establishing new ways to help patients, families, and hospitals identify higher-quality post-acute care providers for their patients.
  • Establishing new principles for measuring quality that address both population-based measures and quality incentives.
  • Encouraging the development of managed care plans that better meet the needs of the dually eligible (Medicare and Medicaid) population.
  • Eliminating Medicare payment increases for skilled nursing facilities in FY 2019 and FY 2020 because of the healthy financial condition of those facilities.
  • Urging Medicare to use a uniform set of population-based measures for different health care settings and different populations.
  • Moving forward with a unified post-acute-care payment system as quickly as possible.

Learn more about MedPAC’s thinking, research, conclusions, and recommendations by consulting the following materials:   the news release that accompanied MedPAC’s transmission of its report to Congress; a fact sheet that accompanied the report’s release; and the 407-page report itself.