Centers for Medicare and Medicaid Proposes Flat Payment

Historically provider payments differ between the setting in which the services are delivered. For example, the same procedure done in a hospital-based clinic will be reimbursed at a higher rate than the one done any medical office. The justification made by the American Hospital Association that because of the higher fixed costs there should be a higher reimbursement rate.  Thus, even though the services were similar patients were required to pay higher co-pay in some cases for the care given hospital-based system versus an office setting. Taxpayers were the one footing the bill for this difference in payments which had little or nothing to do outcomes of care.

Many physician groups particularly specialists are complaining that this change in a flat payment system will impact their revenue. Some physicians are hypothesizing that the reduction in payments will decrease their income. The Center for Medicare & Medicaid is proposing a change in the paperwork requirement for submission of billing information. It will move from a four-step process to a single form that needs to be submitted. If the provider can justify that additional time is needed to care for complex care patients an additional payment can be requested. The government proposes that the flat payment will improve efficiency and outcomes of care.

While the government does not indicate that the proposal will reduce the cost of care, it does seem at least in my reading of the proposed regulations that there is some intent to level the payment across multiple settings for the same procedures. Traditional taxpayers have been told by many provided groups their cost of doing business is unique and higher in certain geographical areas, therefore, they should not be forced to become more cost-efficient and simply receive higher compensation from the Centers for Medicare and Medicaid. The new payment is scheduled for implementation on January 1, 2019. For more information about this particular proposal, please view NPR Story Regarding Flat Payment

Dr. Bob