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Washington Highlights

MedPAC Issues June 2018 Report to Congress, Including Two Emergency Department Recommendations

June 22, 2018—The Medicare Payment Advisory Commission (MedPAC) June 15 released its June 2018 Report to the Congress, which considers 10 issues affecting the Medicare program, including the effects of the Hospital Readmission Reductions Program (HRRP), rebalancing Medicare’s physician fee schedule toward ambulatory evaluation and management (E&M) services, and hospital emergency department (ED) services.

However, the report makes only two recommendations — both on using payment to ensure appropriate access to and use of ED services. MedPAC recommends that Medicare allow isolated rural stand-alone EDs to bill standard outpatient prospective payment system facility fees and provide annual payments to such EDs to assist with fixed costs.

The commission reasons that outpatient payments to EDs in small, isolated communities, in which ED services are undersupplied, would allow community hospitals to convert from inpatient to outpatient-only, which would offer lower costs to the hospital and reduced cost-sharing for beneficiaries. Moreover, MedPAC recommends reducing Type A emergency department payment rates by 30% for off-campus stand-alone emergency departments that are within six miles of an on-campus hospital emergency department.

With respect to HRRP, the commission concluded that it has contributed to a significant decline in readmission rates without material increases in observation stays or ED visits or negative effects on mortality rates. The commission also explored ways to apply its principle for measuring quality more effectively, including replacing the four existing hospital inpatient quality reporting program into a single quality and value incentive program. MedPAC plans to continue working on this concept. In its review of the need for rebalancing Medicare’s physician fee schedule toward ambulatory E&M services, MedPAC’s main concern is that E&M services have become undervalued relative to other services, which may result in limiting beneficiary access.

The MedPAC report also discussed the following topics:

  • Paying for sequential stays in a unified prospective payment system for post-acute care;
  • Encouraging Medicare beneficiaries to use higher-quality post-acute care providers;
  • Issues in Medicare’s medical device payment policies;
  • Recent performance and long-term issues of Medicare accountable care organization models;
  • Managed care plans for dual-eligible beneficiaries; and
  • Medicare coverage policy and use of low-value care.


Mary Mullaney
Director, Hospital Payment Policies
Telephone: 202-909-2084

Andrew Amari
Hospital Policy and Regulatory Specialist
Telephone: 202-828-0554


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Senior Legislative Analyst, Govt. Relations
Telephone: 202-903-0806