MedPAC Recommends Equalizing Many HOPPS and MPFS Charges

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The Medicare Payment Advisory Commission (MedPAC) has voted unanimously to reduce or eliminate discrepancies in what Medicare pays for services done in hospital outpatient departments versus physician offices and ambulatory surgery centers.

Hospital networks have been expanding into outpatient services and the American Hospital Association expressed its concern after the vote in an AHA News Now article.

“We are troubled by the recommendation to reduce or eliminate payment differences between hospital outpatient departments and physician offices for 66 ambulatory payment classifications, which could threaten access to care for Medicare beneficiaries,” said Linda Fishman, AHA senior vice president for public policy analysis and development, in the article.

The idea to equalize payments was proposed in June of last year in a MedPAC report to Congress. In that report, roughly 25% of the more than 800 CPT codes contained by the 66 ambulatory payment classifications pertained to radiology and radiation oncology services, noted the ACR. This included ultrasound, MR, cardiac CT, nerve injections and radiation therapy.

According to the ACR’s analysis published last June, among the impacted codes, 53% were reimbursed by Medicare at a lower rate in physician offices than in hospital outpatient centers and 41% percent were reimbursed at the same rate. (By law, if a service is reimbursed at a lower rate in the Hospitals Outpatient Prospective Payment System or HOPPS, the Medicare Physician Fee Schedule or MPFS reimbursement amount is lowered to match the HOPPS amount.)

Since the Centers for Medicare and Medicaid Services (CMS) lowered even more HOPPS imaging reimbursement amounts by creating separate cost centers for MR and CT in 2013, the number of impacted codes where hospitals are paid more might be even smaller now than it was last June.

On the positive side, MedPAC did listen to the AHA and others who pushed for a payment recommendation that took the across-the-board mandatory spending reductions know as the sequester into account. MedPAC’s final recommendation to Congress advises increasing Medicare payment rates for the hospital inpatient and outpatient prospective payment systems by 3.25% in 2015 if the sequester is eliminated this year and increasing it by 5.25% if the sequester continues in 2015.