Payment rate propositions & perils

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 - Candace Stuart - Headshot
Candace Stuart, Editor

The panel that advises Congress on Medicare issues recently outlined proposed changes designed to better align hospital outpatient and physician office payment rates. Could this signal a reversal in hospitals acquiring cardiovascular practices?

The Medicare Payment Advisory Commission (MedPAC) and others have followed the trend in physician employment patterns. In its “Report to Congress: Medicare and the Health Care Delivery System” released this month, the panel cited an American College of Cardiology analysis that showed the slice of employed cardiologists grew from 11 percent in 2007 to 35 percent in 2012. It also noted the consequence: Services once offered in physician offices now are done in hospital outpatient departments, where reimbursement is higher.  

That means more money shelled out by Medicare and beneficiaries, MedPAC said, arguing that it was time to equalize the payment rates. In one scenario, it targeted echocardiography and cardiac nuclear tests and calculated aligning hospital outpatient and physician office payment rates would produce cost savings of $500 million. Overall, Medicare revenue would drop by 0.3 percent and hospital outpatient department revenue would fall 1.5 percent.

There are many reasons why cardiologists and hospitals have forged partnerships, with some wins for both hospitals and patients. In a presentation at the Cardiovascular Service Line Symposium, Darryl Elmouchi, MD, medical director of the Frederick Meijer Heart & Vascular Institute in Grand Rapids, Mich., described a post-integration collaboration with emergency department physicians that resulted in a heart failure clinic and better outcomes. Another initiative saved the hospital more than $1 million in 2012.

By some accounts, integration may be slowing down. Some employed physicians also may be nearing a period of renegotiation. Are hospitals looking at MedPAC’s recommendations and anticipating slimmer profits from cardiac services? If so, how does that affect negotiations for practices hoping to integrate, or renegotiations for those already in a partnership? Please share your thoughts.

Candace Stuart

Cardiovascular Business, editor

cstuart@cardiovascularbusiness.com