Groups Oppose Changes to Medicare Payment System
Medical device makers, specialty hospitals and some patient groups are urging CMS to delay implementation of a proposed change in reimbursement policies that would reduce payments for drug-eluting stents, implantable defibrillators and other medical devices, CQ HealthBeat reports (Carey, CQ HealthBeat, 6/6).
CMS, which proposed the change in April, said the rule would close loopholes used by specialty hospitals -- such as cardiac, orthopedic and surgical facilities -- and reduce costs. By 2008, the proposed rule would reduce reimbursements by 11.7% for cardiac hospitals, 9.4% for orthopedic hospitals and 7.2% for surgical hospitals (California Healthline, 4/14).
The proposed rule is part of a larger Medicare plan that would replace the current charge-based reimbursement system with a cost-based system. The deadline for public comments on the proposal is June 12. A final plan will be announced in August, and implementation is planned for October (Kamp, Dow Jones, 6/5).
According to Stephen Ubl -- president and CEO of AdvaMed, which represents medical device makers -- the proposed rule would reduce reimbursements for stents by more than 30% and for defibrillators by almost 25%.
Ubl and Dwight Reynolds, president of the Heart Rhythm Society, said implementation of the plan should be postponed for one year to allow interested parties more time to assess the proposal. Ubl said the proposal is based on data that is up to five years old, adding, "The proposed rule in its current form is too much, too soon and too flawed."
Reynolds said, "We recommend that these changes be deferred, so that all stakeholders can better understand the impact and allow CMS to develop an accurate system that will continue to allow patient access to the therapies and services they need" (CQ HealthBeat, 6/6).
Meanwhile, Scott Ward, president of Medtronic's vascular business, sent a letter to doctors urging them to tell CMS and Congress that the proposal is "flawed and should be rejected until the data and methodology are corrected." Ward said that the rule has "technical errors and assumptions that worsen the overall payment cuts to cardiology" and that it could "reduce patient access to interventional procedures."
Daniel Starks, president and CEO of St. Jude Medical, has said that the proposal is "flawed" and that the deadline for public comments is too soon. "We don't expect the current draft proposals to end up defining the level of reimbursement," Starks said (Dow Jones, 6/5).
The American Hospital Association also is opposing part of the CMS proposal that would create a cost-based reimbursement system for diagnosis-related groups, CQ HealthBeat reports (CQ HealthBeat, 6/6). The rule would increase Medicare reimbursements for inpatient services at acute care hospitals by 3.4%, or about $3.3 billion, in fiscal year 2007.
In addition, the rule would base the weights assigned to DRGs on hospital costs rather than charges and would adjust DRGs for patient severity to "eliminate biases in the current DRG system arising from the differential markup hospitals assign for ancillary services among the DRGs." The rule marks the first step in a two-step process for reform of the DRG system.
The second step, scheduled for FY 2008, would replace the system of 526 DRGs with either the proposed 861 consolidated severity-adjusted DRGs or an alternative security-adjusted DRG system developed in response to public comments submitted to CMS on the issue (American Health Line, 4/18).
On Monday, AHA officials sent a letter to its members saying, "Questions remain about the concepts and methodology used to create the changes and about whether the changes will create a better payment system." AHA is pushing CMS to postpone the changes for one year and phase in any payment changes over three years.
Herb Kuhn, director of the Center of Medicare Management at CMS, said the proposals were "designed to more accurately reflect the cost of care" and correct "notable distortions" in the current reimbursement system. He added, "We really want to make sure we pay as accurately as possible for inpatient hospital services" (CQ HealthBeat, 6/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.