MedPAC expresses desire for hospitals to receive a payment update

The Medicare Payment Advisory Commission (MedPAC) would like to see hospitals receive a payment update from Congress equivalent to the market basket index's rate of change for inpatient and outpatient payments in the 2011 fiscal year, and voted for such at its January meeting this week. 

To the chagrin of the American Hospital Association, however, MedPAC wants Health and Human Services Secretary Kathleen Sebelius to reduce the inpatient update by up to 2 percent every year from 2011 through 2013. Such a reduction would help to make up for overpayments caused by coding changes in 2008. 

"We're pleased that MedPAC recommended a full market basket update," said Don May, AHA vice president of policy. "However, we are disappointed with the commission's coding offset recommendation, since CMS already has authority to apply an offset and has suggested using a less aggressive transition in its 2010 rule." 

A survey comparison of top performing hospitals from 2005 to 2007 by MedPAC showed that the top 218 hospitals had a 2008 Medicare margin of 0.2 percent, while the other 1,991 hospitals' Medicare margin rate declined by 8.3 percent. Both readmission rates and standardized costs for the top hospitals were lower than the national median (by 5 and 9 percent, respectively); at the other hospitals, readmission rates were 3 percent above the median, while standardized costs were 2 percent above. 

For more information:
- here's MedPAC's presentation