The Medicare Payment Advisory Commission has voted unanimously to recommend giving hospitals a full market basket increase in FY08 payments for inpatient and outpatient care. CQ HealthBeat has reported that the projected increase is 3.1%.
The panel also recommended higher payments of 1% to 2% to hospitals that improve their care or meet certain quality standards on widely used performance measures. The commission stated, “Congress should increase payment rates for the acute inpatient and outpatient prospective payment system in 2008 by the projected rate of increase in the hospital market basket index, concurrent with implementation of a quality incentive payment program.”
The quality improvement payments would come from adopting a second MedPAC recommendation to trim the add-on payment made to teaching hospitals, known as the adjustment for “indirect medical education” expenses. The IME add-on would be cut from 5.5% to 4.5%. Resulting savings could fund 1% bonus payments for quality, MedPAC staff said.
