MedPAC: Reduce E/M Rates in HOPDs

Members of the Medicare Payment Advisory Commission (MedPAC) met Nov. 4 to discuss the increasing trend for physicians to leave private practice in exchange for hospital employment. The result being “no change in care” and “significantly higher Medicare payments,” commissioners surmise in their presentation.

This trend may actually increase program spending and cost sharing without necessarily improving health outcomes, commissioners speculate.

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Their solution: “Reduce Medicare payment rates for evaluation and management office/outpatient visits provided in hospital outpatient departments so that total Medicare payment rates for these visits are the same across settings.”

Commissioners base their conclusion on analysis of payment rate differences across ambulatory sectors, which indicates that office/outpatient visits (CPT® 99201-99215) are gradually shifting from offices to hospital outpatient departments (HOPDs). Cardiology services, in particular, have shown a large shift to HOPDs in recent years.

In their presentation, commissioners compare 2011 payment rates between settings. A mid-level office/outpatient visit (CPT® 99213 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least 2 of these 3 key components: An expanded problem focused history; An expanded problem focused examination; Medical decision making of low complexity.) at a physician’s office, for example, would cost $68.97, compared to $124.40 at an outpatient facility.

Leveling the playing field, commissioners say, would discourage expansion of high-cost settings. Expect to see more on this topic in MedPAC’s 2012 Report to Congress.

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2 Responses to “MedPAC: Reduce E/M Rates in HOPDs”

  1. Ken Beilman, M.D. says:

    It is absurd to pay hospitals more than independent practitioners for the same service. This is obviously a driving reason for the the abandonment of independent practice in favor of the physician employment model. Among the many societal disadvantages to the employment model is the loss of referral freedom and Medicare encouraged higher costs. This needs to be changed.

  2. Deborah Harlow says:

    Makes sense to me. It is difficult enough for physicians today to be in private practice, therefore the trend for them to join hospitals and HMO’s.
    I’m in favor of anything which enables physicians to set up private practices, thereby creating new small businesses. This would encourage diversity and competition, and provide more choice for patients, as opposed to the current trend of big-box healthcare which is controlled by corporations.

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