Agreement reached on Medicare physician payment fix
AHA News Now
Feb 16, 2012
House and Senate leaders have reached an agreement to provide physicians a 0% Medicare payment update through the end of the year, preventing a 27.4% cut to Medicare physician payments scheduled to take effect March 1. To offset the cost of averting the physician cut, inpatient acute care hospitals would see their Medicare bad debt payments reduced from the current 70% level to 65% beginning in fiscal year 2013; and critical access hospitals would see their payments reduced from 100% to 65%, phased in over three years. The legislation also would extend the current therapy cap and exceptions process to services provided in hospital outpatient departments through Dec. 31, and would reduce Medicaid Disproportionate Share Hospital payments in 2021. Significantly, the agreement does not reduce payments for evaluation and management services provided in hospital outpatient departments, nor does it grant the Centers for Medicare & Medicaid Services new authority to make additional across-the-board cuts to Medicare inpatient hospital rates through the use of retrospective coding adjustments for FYs 2010-2012. The agreement also rejects proposed changes that would significantly weaken the current prohibition on physician self-referral to new physician-owned hospitals and loosen the restrictions for growth on grandfathered facilities. The House and Senate are expected to vote on the agreement before the Presidents Day recess. "While we support ensuring that physicians will not see their Medicare payments reduced, we are extremely disappointed that once again Congress is putting seniors' access to hospital services in jeopardy through arbitrary reductions to hospitals," said AHA President and CEO Rich Umbdenstock. "Today's proposal would add an unnecessary strain to hospitals that care for vulnerable populations. … We need thoughtful approaches to improving health care not indiscriminate cuts that harm patients' access to care."