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MedPAC backs higher rates for certain hospitals, physicians

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The Medicare Payment Advisory Commission has recommended that acute-care hospitals and physicians get higher payments in 2018 but not ambulatory surgery centers, skilled-nursing facilities and inpatient rehabilitation facilities.

MedPAC commissioners recommended that the government boost Medicare payments for hospital inpatient and outpatient services by 1.85 percent and 0.5 percent for physicians.  Acute-care hospitals and physicians both had slight increases in their Medicare volumes in 2015.

In recommending against raises for nonhospital-linked ambulatory surgery centers, the commissioners noted that those outpatient facilities seem to be very financially healthy at current reimbursement rates.

MedPAC also argued that   skilled-nursing facilities, hospices and long-term-care hospitals don’t need higher rates and suggested modest cuts for home-health agencies and inpatient rehabilitation facilities because both groups  have profit margins ranging from 18 percent to 41.5 percent. The average profit margin for companies in the S&P 500 is about 8 percent.

For inpatient rehabilitation facilities specifically, MedPAC says that Medicare payments substantially exceed the costs of care.

Now expect an avalanche of lobbying of politicians and regulators in Washington so that these groups can maintain their very high profit margins.

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