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Home E-Weekly January 17, 2017

MedPAC Finalizes 2018 Payment Recommendations

Published: January 17, 2017

FACILITY FEES MedPAC believes surgery centers are financially sound.

The Medicare Payment Advisory Commission apparently believes the nation's surgery centers are making enough money. Last week, the commission finalized its recommendation to Congress that calls for no increase in CMS reimbursements to ASCs in 2018. MedPAC also voted to increase hospital payments for inpatient and outpatient services by 1.85% and bump up physicians' fees by 0.5%.

The suggested payment freeze will come after ASCs enjoy a 1.9% increase in Medicare payments in 2017, slightly more than the 1.65% increase hospital outpatient departments will receive. Medicare paid ASCs $4.1 billion for the care of 3.4 million beneficiaries in 2015; figures that suggest surgery centers are on solid financial ground, according to MedPAC. The commission also wants ASCs to submit cost data in order for CMS to properly assess its reimbursement policies.

"ASCs provide high quality outpatient surgical care to Medicare beneficiaries at nearly half the cost of care provided in hospital outpatient departments," says ASCA Chief Executive Officer William Prentice. "ASCs deserve payment updates that, at a minimum, keep pace with inflation. MedPAC should be looking at ways to support surgery centers and drive more migration of procedures into the ASC setting — doing so could save the Medicare program and beneficiaries billions of dollars."

Michael Romansky, JD, Washington counsel and vice president for corporate development of the Outpatient Ophthalmic Surgery Society, says MedPAC's proposal represents the opening volley in a budget battle that will play out over the next 9 months. Still, Mr. Romansky calls the commission's reasoning "specious" and its conclusions "indefensible."

"The position of OOSS and the ASC community remains constant," says Mr. Romansky. "Surgery centers should receive the same annual update as hospitals, and cost reporting should be rejected as unreasonably burdensome and unnecessary."

In a recent letter to the commission, Ashley Thompson, senior vice president of public policy analysis and development for the American Hospital Association, says the average hospital is projected to have an overall Medicare margin of negative 10% in 2017. She says Medicare payments are inadequate and believes increases for inpatient and outpatient hospital services are "absolutely necessary."

Daniel Cook

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