The Medicare Payment Advisory Commission today released its June report to Congress that recommended the adoption of additional site-neutral payment policies for certain outpatient services. The MedPAC recommendation, which was discussed as being budget-neutral, would redistribute $7.5 billion in Medicare spending for certain services performed in outpatient departments and ambulatory surgical centers. The impact would be most pronounced on rural hospitals, which would face Medicare cuts of 2.5%, reducing rural hospitals’ average total Medicare margin (already -17.8%) to an even more alarming -21%. As most of rural hospital revenue comes from government payers, of which Medicare comprises nearly half, such additional site-neutral cuts would lead to devastating financial hardship, even more closures and drastically impact the communities rural hospitals serve. Moreover, a current legislative proposal modeled after MedPAC’s recommendation but not budget-neutral would lead to a $180.6 billion cut to hospitals over 10 years.

In addition, MedPAC's June report includes recommendations related to Medicare Part B drugs, including a proposal to change the Average Sales Price plus 6% methodology. That is, MedPAC proposes that the add-on to the ASP be revised to be the lesser of: 6%; 3% plus $24; or $220 per drug per day. AHA believes the proposal would harm hospitals and is premature given that the Inflation Reduction Act’s impact on prices, reimbursement and access to Part B drugs is not fully understood at this time.

Related News Articles

Headline
The AHA and American Society of Health-System Pharmacists Nov. 14 urged House and Senate leaders to oppose any policies that fail to take into account the…
Headline
The AHA Sept. 27 will launch a new TV ad urging Congress to protect patient access to care by rejecting billions of dollars in reductions to hospital care. “So…
Perspective
As we’ve seen from recent media reports, Congress — and especially the House right now — continues to struggle to put together a plan to keep the government…
Headline
The Senate Health, Education, Labor and Pensions Committee today voted 14-7 to advance as amended to the full Senate the Bipartisan Primary Care and Health…
News
A number of legislative proposals being considered by Congress would impose billions of dollars in additional Medicare payment cuts for services provided by…
Headline
AHA today voiced support for a provision in the Lower Costs, More Transparency Act (H.R. 5378) that would suspend for two years the Medicaid disproportionate…