Lawmakers, Industry React to Hospital Payment Proposal
Lawmakers and hospital industry leaders have expressed mixed reactions to CMS proposals that would affect Medicare reimbursements for outpatient services and would require specialty hospitals to provide the government with information about physician investment and compensation, CQ HealthBeat reports (Reichard, CQ HealthBeat, 8/9).
The Bush administration on Tuesday announced a proposed rule that would increase by 3% Medicare reimbursements for outpatient services for hospitals that report quality care measures to the government. In addition, the administration announced a proposal that would require specialty hospitals to provide the government with information about their "investment and compensation relationships with physicians."
Hospitals specializing in cardiac, orthopedic or surgical care would be required to notify patients of any "investment interest" a staff physician has in the hospital. Hospitals that do not comply with the disclosure requirements would face civil penalties of up to $10,000 per day.
CMS officials said physicians who invest in hospitals could be violating federal law if they receive financial returns that are disproportionate to their investments (California Healthline, 8/9).
Thomas Nickels -- senior vice president of the American Hospital Association, which opposes specialty hospitals -- said, "Patients have a right to know whether a conflict of interest may affect their care," but added, "[G]iven the growing evidence that financial interest may be overtaking patient interest, the AHA continues to believe physician self-referral to limited-service hospitals they own should be banned."
Senate Finance Committee Chair Chuck Grassley (R-Iowa) said that the plan "is important" but added that "these steps alone won't unravel the web of conflicts that have been created by these limited-service hospitals, which cherry-pick patients based on dollars rather than diagnosis and put the well-being of both individual patients and the health care delivery system at risk."
Donald May, vice president for policy at AHA, said the proposal that would increase Medicare reimbursements for outpatient services for hospitals that report quality care data on inpatient services is flawed because such incentives should be "linked to the care provided."
Kathy Bryant, president of the Federated Ambulatory Surgery Association, said her organization is "extremely disappointed by the rate CMS is paying" ambulatory surgery centers. Bryant said the CMS proposal that would set reimbursements for outpatient care at ambulatory surgery centers at 62% of the rate of reimbursement for such care at hospitals "seemed excessive," adding that FASA had proposed a 75% rate (CQ HealthBeat, 8/9).
CMS on Tuesday also finalized a plan to end a moratorium on approval of new specialty hospitals, CQ HealthBeat reports (CQ HealthBeat, 8/9).
Grassley and Senate Finance Committee ranking minority member Max Baucus (D-Mont.) in a July 28 press release asked CMS to extend the moratorium until Oct. 8 because of concerns about information in a recent survey. The 2003 Medicare law included an 18-month moratorium that expired in June 2005, but CMS officials determined that the agency had the authority to extend the moratorium until Feb. 15.
In addition, the fiscal year 2006 budget reconciliation bill enacted in February included a six-month moratorium and required CMS to develop a plan on regulation of specialty hospitals.
As part of the effort to develop the plan, CMS in May sent a survey to 130 specialty hospitals and 285 rival facilities to determine the effect of specialty hospitals on community facilities. However, CMS sent the survey to at least five rival hospitals in states that prohibit specialty facilities, and "numerous hospitals that should be considered 'competitor' hospitals were not surveyed," according to the senators (California Healthline, 8/4).
CMS Administrator Mark McClellan on Tuesday sent a letter to the senators "defend[ing]" the survey and "blaming problems in the survey in part on a low response rate by hospitals," according to CQ HealthBeat (CQ HealthBeat, 8/9).
APM's "Marketplace" on Wednesday reported on the Medicare payment cuts to physicians. The segment includes comments from Stuart Altman of the Brandeis University Heller School for Social Policy and Management; Herb Kuhn, director of the Center for Medicare Management at CMS; and Cecil Wilson, chair of the American Medical Association board of trustees (Palmer, "Marketplace," APM, 8/9).
The complete transcript and audio in RealPlayer are available online.