In the 21st Century Cures Act of 2016, Congress mandated that MedPAC examine the effects of Medicare’s Hospital Readmissions Reduction Program (HRRP). Created by Congress in 2010, the HRRP penalizes hospitals with high rates of readmission for a selected set of conditions (pneumonia, acute myocardial infarction (AMI), heart failure, hip and knee replacement, chronic obstructive… Read more »
In January 2019, the Commission recommended the Congress replace the four current hospital quality payment programs with a single alternative program—the Hospital Value Incentive Program (HVIP). The HVIP encourages the delivery of better-quality hospital care for beneficiaries, catalyzes change in the delivery system, considers differences in providers’ patient populations, and reduces provider burden.
The Hospital Readmissions Reduction Program (HRRP) contributed to declines in readmissions but has not caused material increases in outpatient observation stays or emergency department visits, nor has the HRRP had a net adverse effect on mortality.
At its November public meeting, the Commission held a session to discuss hospital consolidation and its implications for the Medicare program. The Commission has been tracking trends in provider consolidation, Medicare and private insurer payment rates, and provider costs for many years. In this post, we pull together a variety of analyses from MedPAC and others for a comprehensive backgrounder on hospital consolidation and Medicare.
This year, in addition to its traditional margin calculation, the Commission is considering a new aspect of the relationship between Medicare payments and providers’ costs: Medicare payments relative to providers’ marginal costs, i.e. marginal profit.
This post points out some technical caveats when using BLS hospital price data. These technical issues may explain the divergence between BLS data and the pricing data reported by insurers and hospitals for their privately insured patients. We will discuss technical issues with three different BLS measures of hospital price inflation.
The hospital readmission reduction program (HRRP), established under the Patient Protection and Affordable Care Act of 2010, has helped to reduce hospital readmissions. Since the introduction of the HRRP, readmission rates have fallen for Medicare beneficiaries across all types of hospitals, including those seeing higher shares of poor patients.
Each year during its update process (read this post for more on that), the Commission examines Medicare’s payments to hospitals for inpatient and outpatient care. As part of this analysis, MedPAC compares Medicare’s payments to hospitals’ costs to determine a Medicare “margin.” For several years, these margins have been negative, indicating that on average, Medicare’s payments are less than hospitals’ costs. Some would argue that negative margins are an indication that Medicare needs to increase its payments to cover hospital costs. A different way to think about the issue is to ask whether hospitals’ costs have to be as high as they are and whether hospitals have the ability to control costs. Said differently, we wondered, “Are hospital costs immutable?”
At our November meeting, we had a session on beneficiary access to hospital services, which was the first part of MedPAC’s yearly work on payment updates. Here’s an explainer on why we do this work and what it entails…