- The Medicare Payment Advisory Commission (MedPAC) voted unanimously this week to recommend reducing reimbursement rates by 30% for off-campus, stand-alone emergency departments that are within six miles of an on-campus ED, potentially saving Medicare up to $250 million annually.
- The American Hospital Association called the proposal "unfounded," and said would exacerbate Medicare's "record underpayment of outpatient departments."
- ED visits under Medicare have grown in recent years, and a MedPAC report from 2017 attributes that growth to, among other things, rising numbers of off-campus EDs.
Off-campus EDs, while paid the same rates as on-campus hospital EDs, may serve lower acuity patients and have lower operating costs than those on hospitals campuses, according to MedPAC.
A 2017 study from the Annals of Emergency Medicine found that free-standing ED patients are paid as much as 10 times more than patients who visit urgent care with similar diagnoses, although that study has been disputed by some clinicians.
MedPAC has discussed the proposed rate cut in previous reports to Congress, and AHA has consistently pushed back. The organization said in a statement the proposal is "not based on any analysis of Medicare beneficiaries, Medicare costs or Medicare payments."
AHA also emphasized its support for allowing hospitals in isolated rural areas and vulnerable urban communities to convert to stand-alone EDs as a way to improve access to care.
The hospital group stressed that the potential for payment reductions would make the "already-record Medicare underpayment of outpatient departments and hospitals even worse."
According to AHA, outpatient Medicare margins hit a record low of 14.8% in 2016, with overall Medicare margins reaching a record low of negative 9.6%, projected to reach a new low of 11% for 2018.
The MedPAC vote is nonbinding, but Congress has accepted the committee's proposals before, including adoption of a site-neutral policy for hospital outpatient departments that are off campus.