MedPAC Holds Meeting on Provider Consolidation

On November 3, the Medicare Payment Advisory Committee (MedPAC) hosted a meeting on provider consolidation and its effect on the Medicare system.

The discussion primarily focused on the trends towards horizontal and vertical integration among providers – essentially hospitals buying physician practices and then billing the services through their hospital outpatient departments. This leads to higher payment rates from both Medicare and commercial insurers for the exact same care services. According to the MedPAC presentation, most markets are already highly consolidated, which leads to higher payment rates with no clear evidence of quality improvement.

To fix this, MedPAC has recommended equalizing payment rates across all sites of service. Under this proposal, which is an expansion of existing rules that require site neutral payments for all new HOPDs, providers are reimbursed at the same rate whether the service is rendered in a physician’s practice or HOPD.

To view slides from the MedPAC meeting, CLICK HERE.