Over the last several years, CMS has worked with the Medicare Payment Advisory Committee to streamline payments for a number of patient services and procedures. Each group has proposed changes to Medicare billing that, if adopted, could streamline and reduce annual healthcare spending for the program.
The current payment system allows for differing payments for the same service depending on where and by whom it was performed. Hospital outpatient departments, for example, receive a higher payment than a physician’s office for the same procedure. However, differentials are also present when measuring payments received by the same physician for the same procedure based on how it was coded.
Several elements contribute to the billing differences that CMS and MedPAC hope to eliminate, including packaged versus separate payments; where providers choose to perform services (and patients choose to receive them); and different methods of weighing payments between different facilities.
Proposed changes include updates to this year’s physician fee schedule and limiting billing to either physician rates or hospital rates. The larger question this creates, however, is which system is the best to determine payment rates at all
A site-neutral payment program is slowly developing: beginning in 2016, long-term care hospital pay rates will shift to align with existing inpatient PPS rates. In the meantime, both CMS and MedPAC continue to identify inconsistencies in payments and potential solutions for them.
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