IOM: Medicare needs to revamp hospital payment formulas

Medicare needs to reevaluate the data it uses to determine payments to hospitals and doctors, according to a report from the Institute of Medicine. The IOM recommends that Medicare make "significant" changes to the way it determines the salaries of hospital and other healthcare workers, as well as the cost of real estate. If such changes were implemented, they would impact the bottom lines of hospitals throughout the United States, as they would likely shift the reimbursements hospitals receive from Medicare. For example, the report found that physicians in one out of every eight counties were overpaid by 5 percent or more. Additionally, 40 percent of the nation's hospitals successfully petitioned the Medicare program to be shifted to another geographical area to get higher levels of reimbursement. --Read more at FierceHealthcare

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