MedPAC considering increase in hospital reimbursement, decrease in ASC reimbursement

The Medicare Payment Advisory Commission (MedPAC) reviewed two proposals to recommend an increase in hospital reimbursement in 2021, according to documents from its December 5 meeting. At the same meeting, MedPAC also heard proposals to curb reimbursement for ambulatory surgery centers (ASC).

According to the American Hospital Association, one of the proposals to increase hospital reimbursement recommends a 2% increase in 2021 and an additional 0.8% increase for MedPAC’s proposed Hospital Value Incentive Program (HVIP). The other proposal recommends a 2.8% increase for all hospitals in 2021 with an additional increase for hospitals that meet HVIP requirements or other efficiency measures.

Analysts also presented a proposal to remove the ACS conversion factor update for 2020 as well as a proposal to require ASCs to report cost data. Currently, because ASCs are not required to report cost data, Medicare has no way to measure margins or develop cost-dependent measures for these facilities. ASCs are primarily physician owned, raising concerns that the model could incentivize higher volumes of procedures. These factors prompted the analysts to recommend that the 2.6% ASC payment update slated for 2020 be reconsidered and that ASCs be required to report cost data.