The Medicare Payment Advisory Commission has reiterated its stance and recommendation on Medicare inpatient and outpatient payment updates to hospitals, saying hospitals should only receive a 1 percent increase next year to "maintain pressure on the industry to contain costs," according to MedPAC's annual report to Congress.
In January, MedPAC said hospital inpatient and outpatient Medicare payments should only be increased marginally in fiscal year 2014. The most recent report, which is submitted to Congress every year, detailed the commission's rationale as to why hospitals should receive a 1 percent raise.
MedPAC officials said hospitals must contain costs, and "high overall profit margins may lead hospitals to reduce their focus on cost control," according to the report. In addition, MedPAC said hospitals can bear low Medicare payment updates because access to care, quality of care and access to capital measures are all positive for the industry.
MedPAC also stated that hospitals' documentation and coding changes in 2010 resulted in "excessive payment rates from 2010 through 2013," meaning any rate increase for 2014 should be minimal to offset those overpayments.
Officials acknowledged that most hospitals have a negative overall Medicare margin. In 2011, the average overall Medicare margin for all hospitals was negative 5.8 percent compared with negative 4.7 percent in 2010. MedPAC also projected a negative 6 percent Medicare margin for hospitals in 2013. For that reason, MedPAC acknowledged a modest increase will help offset the costs associated with Medicare patients.
Also within the report, MedPAC officials told Congress there is an "urgent need" to repeal the sustainable growth rate, which dictates Medicare payments to physicians.
As for the industries outside of hospitals and physicians, MedPAC had gloomier news. Officials said they recommend no increases for ambulatory surgery centers, long-term care hospitals and inpatient rehabilitation facilities, and MedPAC suggested reducing rates for skilled nursing facilities and home healthcare agencies.
In January, MedPAC said hospital inpatient and outpatient Medicare payments should only be increased marginally in fiscal year 2014. The most recent report, which is submitted to Congress every year, detailed the commission's rationale as to why hospitals should receive a 1 percent raise.MedPAC officials said hospitals must contain costs, and "high overall profit margins may lead hospitals to reduce their focus on cost control," according to the report. In addition, MedPAC said hospitals can bear low Medicare payment updates because access to care, quality of care and access to capital measures are all positive for the industry.
MedPAC also stated that hospitals' documentation and coding changes in 2010 resulted in "excessive payment rates from 2010 through 2013," meaning any rate increase for 2014 should be minimal to offset those overpayments.
Officials acknowledged that most hospitals have a negative overall Medicare margin. In 2011, the average overall Medicare margin for all hospitals was negative 5.8 percent compared with negative 4.7 percent in 2010. MedPAC also projected a negative 6 percent Medicare margin for hospitals in 2013. For that reason, MedPAC acknowledged a modest increase will help offset the costs associated with Medicare patients.
Also within the report, MedPAC officials told Congress there is an "urgent need" to repeal the sustainable growth rate, which dictates Medicare payments to physicians.
As for the industries outside of hospitals and physicians, MedPAC had gloomier news. Officials said they recommend no increases for ambulatory surgery centers, long-term care hospitals and inpatient rehabilitation facilities, and MedPAC suggested reducing rates for skilled nursing facilities and home healthcare agencies.
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