AHA urges MedPAC to increase hospital pay

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As the Medicare Payment Advisory Commission (MedPAC) is scheduled to vote later this week on payment changes for the 2014 fiscal year, the American Hospital Association (AHA) is urging MedPAC to revise its recommended 1 percent pay bump and consider the consequences of sequestration.

By law, MedPAC makes recommendations on inpatient and outpatient payment updates, including documentation and coding changes, post-acute hospital updates and the controversial site-neutral policy.

Last month, much to AHA's dismay, the commission recommended increasing hospital payments a mere 1 percent. The commission said hospital spending barely budged in 2011. Inpatient spending was down 1 percent, while outpatient spending was up 9 percent, and overall spending rose only 2 percent, FierceHealthFinance reported.

AHA's reaction wasn't kind, as expected. The trade organization that represents nearly 5,000 hospitals and health systems said the proposed modest increase doesn't account for growth in patient severity, such as obesity and multiple chronic diseases.

"Plain and simple: Today's hospital patients are sicker," Caroline Steinberg, AHA's vice president of trends analysis, told AHA News Now.

Since MedPAC's draft recommendations last month, the American Taxpayer Relief Act, signed into law last week, calls on the Centers for Medicare & Medicaid Services to cut $11 billion in hospital inpatient payments between fiscal years 2014 and 2017 because of alleged overpayments related to documentation and coding.

AHA estimates hospitals would see negative 0.6 percent before sequestration, in which the Budget Control Act will cut 2 percent of Medicare payments in April. AHA said MedPAC's recommendation doesn't take into consideration the impact of sequestration and that increases to both inpatient and outpatient pay is "absolutely essential."

MedPAC is meeting tomorrow and Friday. Its determination of whether payment is adequate is based on beneficiaries' access to care, quality of care, providers' access to capital, and provider costs and Medicare payments in 2013, according to an agenda brief.

For more information:
- see AHA letter (.pdf) and news brief
- see the MedPAC brief and presentation in December (.pdfs)
- here's the MedPAC agenda brief (.pdf) this month

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