In a letter to the Medicare Payment Advisory Commission, the American Hospital Association has advocated that the impact of sequestration should be factored into Medicare's inpatient payments to hospitals for fiscal year 2015.
In December, MedPAC officials said it will not consider sequestration for Medicare payment update recommendations until fiscal year 2016, noting that sequestration is a "short-term" impact. Sequestration went into effect last April, resulting in an automatic, annual 2 percent cut to Medicare payments for hospitals for the next decade.
"MedPAC's position that sequestration is 'temporary' is misguided — sequestration is current law and applies to Medicare payments for the next decade," Linda Fishman, AHA's senior vice president of public policy analysis and development, wrote in the letter. "The Commission's failure to include the sequestration payment cuts in formulating its update recommendations and margin projections for FY 2015 results in a misleading and inaccurate picture of hospitals' financial status."
AHA urged MedPAC to increased Medicare's inpatient and outpatient payment rates by at least 5 percent for FY 2015. In addition, the hospital group said Medicare should not eliminate payment rate differences for hospital outpatient departments. HOPDs are paid significantly more than physician offices and ambulatory surgery centers for outpatient services, and MedPAC has advocated for more site-neutral payment policies, which the AHA argues would cost hospitals billions of dollars every year.
MedPAC is likely to vote this week on Medicare payment recommendations for FY 2015, which begins this October.
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