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WASHINGTON – The Medicare Payment Advisory Commission (MedPAC) voted Jan. 13 to recommend to Congress a 1 percent increase in Medicare hospital inpatient and hospital outpatient prospective payment system rates for 2012.
In addition, the commission voted to recommend a 1 percent pay rate increase for physicians.
Those recommendations will be part of an official report that MedPAC will deliver to Congress in March.
At a public meeting on the recommendations, MedPAC analyst Cristina Boccuti said the government paid $69 billion in 2009 for Medicare fee-for-service, with 1 million practitioners in Medicare's registry.
Boccuti said physicians and beneficiaries are expressing “mounting frustration” over the current sustainable growth rate formula used to calculate physician reimbursement rates under Medicare. She said they’re also frustrated with the temporary “fixes” that Congress continues to pass and the looming 21 percent Medicare physician pay cut.
According to a 2010 physician access survey conducted by MedPAC, most Medicare beneficiaries age 65 and older report better access to care than those between the ages of 50 and 64 with private insurance.
In a different analysis, MedPAC found the average income across all physician specialties was $273,000 per year.
In 2009, MedPAC analyst Jeff Stensland said, access to hospital inpatient and outpatient care was strong and quality remained steady. That year, he said, government spent $114 billion on inpatient FFS.
According to Stensland, Congress phased in MS-DRGs (Medicare severity-diagnosis related-groups) and cost-based weights in 2007-2009 to create financial incentives. The result was an increase in Medicare hospital reimbursements without any real change in patient care. A 3.9 percent adjustment is needed to stop the overpayments resulting from the coding changes, he said.
Stensland said MedPAC should recommend that Congress recover overpayments made to hospitals since 2007, but adjustments should be made gradually to avoid “a large financial shock” to hospitals.
MedPAC Commissioner Thomas Dean, MD, of Horizon Health Care in Wessington Springs, S.D., said the payment updates are not as important as MedPAC ‘s work on payment reform.
“We really need to look at new payment structures, new models of delivery and all those things if we’re going to make efficient use of Medicare resources,” he said.