Scully To Announce Medicare Outlier Payment Revisions As Early As Today
CMS Administrator Tom Scully as early as today is expected to announce plans to revise the way Medicare administers hospital outlier payments, which reimburse for unusually costly care, the Los Angeles Times reports. Scully said the change will close loopholes that allowed hospitals to "game the system" by "manipulating" a payment formula using hospital cost reports, the Times reports. The plan is expected to take effect immediately upon its announcement and could "eliminate about $2 billion in payments this year to scores of hospitals around the country," according to the Times. The Times reports that the cuts could be especially painful for large academic medical centers that rely on outlier payments to boost revenues (Lee/Gellene, Los Angeles Times, 2/4). The anticipated revision comes after the HHS Office of Inspector General in November began auditing Tenet Healthcare's Medicare outlier reimbursements. Last month, the Justice Department began an investigation of Tenet hospitals in an attempt to determine whether the company properly billed Medicare; government officials say Tenet has been receiving an "extraordinarily high share" of outlier payments (California Healthline, 1/3). Scully said of the new rules, "We are going to remove the incentive up front. We're closing the door." Joshua Nemzoff, a hospital consultant in New Hope, Pa., predicted that the change is "going to take a significant number of these hospitals from being financially solvent to financially insolvent. And it's going to do it instantly" (Los Angeles Times, 2/4).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.