Medicare Payment Advisory Commission Releases Draft Recommendations on Payment Updates
The Medicare Payment Advisory Commission on Thursday released several draft recommendations related to payment updates for fiscal year 2007, CQ HealthBeat reports.
Under one of the draft recommendations, which must be finalized by the panel and accepted by Congress, MedPAC said Medicare should increase hospital inpatient payments in FY 2007 by about 0.45 percentage points less than the "market basket" increase in the projected costs of hospital inpatient care. For several sectors -- including hospitals, dialysis, home health and skilled nursing facilities -- the draft recommendation is the same as last year's recommendations, according to MedPAC Chair Glenn Hackbarth.
MedPAC also released a draft recommendation to reduce the market basket update in FY 2007 for Medicare hospital outpatient payments by 0.45 percentage points. As a result, the projected overall increase in Medicare hospital outpatient payments would be 3.55%, according to CQ HealthBeat.
MedPAC also released a draft recommendation to increase payments to inpatient rehabilitation facilities in 2007 by half the market basket increase in care costs, or 1.8%. MedPAC also is considering a recommendation to increase payments to skilled nursing facilities in 2007, keep payments to home health agencies stable in 2007 and increase payments to freestanding dialysis centers by the market basket for the sector, or 3.2%, minus 0.45 percentage points to adjust for productivity. In addition, MedPAC adopted several final recommendations for oncology payments to be made to Congress in January.
A spokesperson for the American Hospital Association said the recommendations mean that hospitals would experience payment increases of about 3%, while costs rise 4% to 5% in FY 2007. She asked MedPAC to consider a higher increase.
MedPAC officials said negative Medicare margins for hospitals -- projected to be minus two percentage points in 2007, compared with minus three percentage points in 2004 -- are more than offset by private insurer payments (CQ HealthBeat, 12/9).