MedPAC Publishes Annual March
Report
March 5, 2004 - The Medicare Payment Advisory Commission
(MedPAC) March 1 released its annual
report to Congress containing Medicare payment policy
recommendations. MedPAC is an independent commission that
advises Congress on Medicare payment issues. Unlike in past
years, the Commission did not address indirect medical education
(IME) payments or other issues specific to teaching hospitals
in this report. However, the Commission did make a number
of other recommendations that would affect hospitals and physicians.
Commissioners recommended that hospital base payment rates
under the inpatient prospective payment system (PPS) be raised
in FY 2005 by the full increase in the hospital market basket
(MB). This recommendation is consistent with the FY 2005 update
currently in law, although the Medicare prescription drug
law enacted last fall states that those hospitals that do
not submit quality data would receive an update equal to the
MB minus 0.4 percentage points.
For hospital outpatient payments MedPAC recommended a full
market basket increase update, which is consistent with current
law. However, the Commission also recommended that outlier
payments under the outpatient prospective payment system be
eliminated, citing data indicating that the majority of outlier
payments were associated with low-cost outpatient services,
which do not need outlier payment protection. If Congress
implemented this recommendation, it would have a negative
impact for teaching hospitals because they receive significant
outpatient outlier payments.
The report recommends a payment update of 2.5 percent for
Medicare physician services in calendar year 2005. The 2.5
percent represents the Centers for Medicare and Medicaid Services
(CMS) projected inflation increase of 3.4 percent less 0.9
percentage points to reflect anticipated productivity gains.
MedPAC's March report also includes payment recommendations
for:
- Outpatient dialysis services;
- Skilled nursing facilities;
- Home health agencies;
- Ambulatory surgical centers; and
- The Medicare + Choice program
Information:
Karen Fisher, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
Denise Dodero, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493
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