MEDPAC Advises Congress on Medicare Cuts 2011

MedPAC is the nonpartisan government research service that provides Congress with policy suggestions to ensure Medicare funds are well spent and the program’s beneficiaries have adequate access to care. Although Congress does not always immediately accept or implement MedPAC’s recommendations, the commission’s annual reports offer healthcare providers a look at future changes in payment policy that are bound to be on the table at some point.

This year’s reports—released in March and June—are no different. They include a number of proposals that could affect payment for inpatient, outpatient, and physician services, and the June report contemplates changes to the Medicare benefit structure. Providers should understand how these proposals will affect them and develop strategies to mitigate their impact.

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MedPAC Advises 1% Update for Physicians

In its annual report to Congress, the Medicare Payment Advisory Commission (MedPAC) recommended a 1-percent payment update for the physican fee schedule services in 2012.

MedPAC also recommended 1 percent updates in 2012 for outpatient dialysis centers, and hospice. For ambulatory surgical centers (ASCs), Congress should implement a 0.5 percent increase in calendar year 2012 while requiring ASCs to submit cost and quality data. Skilled nursing facilities (SNFs) would get no update in fiscal year 2012, according to MedPAC, which also called for Congress to establish a quality incentive payment for SNFs and for SNFs to report more accurate diagnostic and service-use information. MedPAC criticized the amount of fraud that occurs in home health agencies and advised HHS to redesign how it pays for home healthcare. The Commission also recommends that HHS investigate financial relationships and patterns of referrals between nursing homes and hospice and asked Congress to change Medicare’s payment to hospice.

This means that the anesthesia rates will go up slightly in 2012.