DIve Brief:
- The distribution of Medicare "outlier" payments is distributed unevenly and needs to be monitored better, according to a new report by the HHS Office of the Inspector General.
- The OIG, which reviewed hospital claims processed through the Inpatient Prospective Payment System between 2008 and 2011, found that of 3,186 acute care hospitals, 158 received an average of 12.8% of Medicare reimbursement from outliers, while outliers made up only 2.2% for all other hospitals studied.
- The OIG is now calling for closer scrutiny of this trend, noting that it's not clear why charges and estimated costs for similar patient care cases vary so much from hospital to hospital.
Dive Insight:
Clearly, some patients are going to be outliers, and under the current system, it only makes sense that Medicare reimburse hospitals more for these cases. That being said, the gap between the hospitals averaging over 12% in outlier payments and the 2% the rest of the hospitals in the study got definitely deserves scrutiny. Ultimately, Medicare will doubtless have to move to value-based bundled payments if CMS wants to get payments under control. We're at a turning point in the industry where this can and probably must happen.