Outpatient PPS’ design, use concern government
Commission navigates complex situation
A government commission may support the goals and broad outlines of the outpatient prospective payment system (PPS), but it raises concerns about elements of the system’s design and implementation.
The analysis of the outpatient PPS was presented in the Medicare Payment Advisory Commission (MedPAC)’s "Report to Congress: Selected Medicare Issues." MedPAC is an independent federal body that advises Congress on issues that affect Medicare. The commission has 17 members who have a variety of experience in the financing and delivery of health care services. The commission is supported by a full-time executive director and a staff of about 30 analysts.
Here are some of MedPAC’s recommendations to Congress based on its analysis:
• The Secretary [of the Department of Health and Human Services] should monitor changes in practice patterns across ambulatory care settings to ensure that differences in payment do not lead to inappropriate shifts in site of care.
"Changes in technology, practice patterns, and the organization of medical services have led providers to offer the same services in multiple ambulatory settings," the report says. "Ensuring consistency of payment across sites of ambulatory care, therefore, becomes an important issue."
The financial incentives inherent in payment differences could lead to inappropriate decisions about where care is delivered.
• The Secretary should study the accuracy of and changes in coding practices with the implementation of the outpatient PPS.
"Previous research conducted on the inpatient setting indicates that changes in coding practices do significantly contribute to changes in measured case mix," the report says. "Because coding behavior is anticipated to change with the implementation of the outpatient PPS, similar analyses are needed for outpatient services to separate which changes in measured service mix are attributable to true changes in resource use versus change in coding practices."
• Congress should enact legislation to accelerate the rate of beneficiary coinsurance buy down under the outpatient PPS and establish a date certain for achieving a coinsurance rate of 20%. This date should result in a time frame for implementation consistent with other Medicare payment policy changes.
"The [currently mandated] process for achieving a 20% coinsurance rate — referred to as the beneficiary buy down — is gradual and could take decades to achieve," the report says.
• The Secretary should carefully monitor implementation of the outpatient PPS system to ensure that:
— it does not have unintended, adverse consequences on beneficiaries’ access to care;
— it does not compromise the quality of care delivered;
— the annual reductions in beneficiary coinsurance as a share of total payment are realized.
"The commission’s concerns about access arise from structural aspects of the payment system, the financial and administrative impacts of the PPS on individual hospitals, and the relatively complex process for reducing beneficiary financial liability for outpatient services," the report says.
In regards to quality, MedPAC says that expanding the list of services that can be provided in an outpatient setting entails an obligation to ensure adequate quality of care for beneficiaries receiving those services in this setting.
Finally, the commission expressed concern that the process for buying down beneficiaries’ disproportionate share of payments for outpatient services is relatively complex. Give the complexities, it will be important to "monitor where beneficiaries realize the reduction in financial liability over time," the report says.
(Editors note: For a look at the complete report, visit MedPAC’s Web site at www.medpac.gov.)
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