Medicare Advisory Group Recommends 1% Increase In Hospital Rates

The head of the group that advises Congress on Medicare issued the draft recommendation, which will be voted on by the full board in January.

Modern Healthcare: MedPAC Mulls 1% Bump In Hospital Rates
Hospitals should receive a 1% increase in their inpatient and outpatient Medicare payment rates, according to draft recommendations released Thursday by the head of Congress' primary Medicare advisory group. Glenn Hackbarth, chairman of the Medicare Payment Advisory Commission, issued the draft increase based on his staff's conclusion that patients' access to care and the quality of care have generally improved, while the number of hospitals has continued to increase and costs have slowed. The rate increases, on which the full commission will vote in January, are based on current rates and do not account for the effect of a looming 2% cut to all Medicare providers from a separate deficit-reduction deal that is scheduled to begin in February (Daly, 12/6).

CQ HealthBeat: MedPAC Considers 1 Percent Payment Increase For Hospitals
The Medicare Payment Advisory Commission on Thursday in a draft recommendation called for a modest 1 percent increase in inpatient and outpatient hospital payments in 2014, at a time when providers are dreading the impact of possible Medicare cuts under sequestration or as a result of budget negotiations. A staff analysis used for the draft recommendation found that Medicare paid two percent more to hospitals in 2011 compared to 2010, as well as a continued shift to services provided in an outpatient setting rather than in hospital beds. The quality of care is generally improving as well, the analysis said. But commissioners continued to chafe at a fee-for-service system that they say too often rewards volume over quality and efficiency. "I believe $117 billion in spending on acute care is too much," said Scott Armstrong, president of Group Health Cooperative in Seattle, Wash., referring to total inpatient Medicare costs in 2011 (Norman, 12/6).

Also in Medicare news, senators are seeking more payments for rural hospitals.

CQ HealthBeat: Senators Want To Revive Medicare Programs For Rural Hospitals
Thirty-one senators are pushing to reinstate expired programs that increased Medicare payment for some rural hospitals as part of legislation that would block scheduled year-end cuts to Medicare physicians. The bipartisan group asked leaders of the Senate Finance Committee to continue the programs, which expired Sept. 30, through the end of fiscal 2013. “Rural hospitals face a wide array of financial difficulties and operational challenges under the current Medicare Prospective Payment System,” the group wrote in a letter to Senate Finance Chairman Max Baucus, D-Mont., and ranking Republican Orrin G. Hatch of Utah. “The network of health providers that serves rural Americans is fragile and more dependent on Medicare revenue because of the high percentage of Medicare beneficiaries who live in rural areas” (Ethridge, 12/6).

Meanwhile, MedPAC also urged Congress to repeal the rate formula used to figure doctors' payments.

Medpage Today: MedPAC To Congress: Repeal SGR
The Medicare Payment Advisory Commission (MedPAC) said once again that it supports repealing the sustainable growth rate formula that establishes physician pay under Medicare. Congress should also rebalance payment across specialties so that primary care providers are on equal footing with specialists, the commissioners said in their meeting Thursday. The body, which advises Congress on issues affecting Medicare, made the same proposal last year in an October letter to lawmakers. … The recommendation to repeal the SGR came in the form of a "chairman's proposal" presented during the meeting. A final vote on the recommendation will come during the commission's next scheduled meeting on Jan. 17-18 (Pittman, 12/6).