95 House Members Urge CMS to Scrap Proposed Outpatient Cuts

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By Michael D. Williamson

Oct. 9 — A bipartisan group of 95 House members recently urged the CMS to reverse a proposed pay cut to outpatient hospitals in 2016.

The lawmakers, in a letter to Andrew M. Slavitt, the acting Centers for Medicare & Medicaid Services administrator, said “Medicare already pays providers less than the cost of care.” Furthermore, implementing a negative payment update would only make it more difficult for hospitals to serve their patients and communities, the Oct. 5 letter said.

In July, the CMS issued a proposed rule (80 Fed. Reg. 39,199) that would cut payments to outpatient hospitals by 0.2 percent, or $43 million in the 2016 calendar year.

Comments (CMS-1633-P) were due Aug. 31. An agency fact sheet on the outpatient proposal said a final rule will be released “on or around” Nov. 1.

Data Problems 

The House members chided the Medicare agency's justification for the cuts.

According to the letter, the payment reduction largely results from a proposed 2 percentage point cut intended to account for the CMS Office of the Actuary's (OACT's) overestimation of the amount of packaged laboratory payments for laboratory tests that were previously paid under the Clinical Laboratory Fee Schedule (CLFS). “Specifically, the agency states that OACT estimates it included about $1 billion in the OPPS payment rates for laboratory tests that were instead paid under the CLFS,” the House members said.

In calculating the $1 billion figure, however, the OACT used data that aren't public, the lawmakers wrote. Moreover, they said, the OACT “used CY 2014 claims, which were paid under CY 2014's laboratory packing policy” to justify its laboratory packing policy for CY 2016. “It is inequitable for the agency to apply a cut calculated under one set of policies to payment rates calculated under a different set of policies,” the letter said.

Given the number of questions regarding this policy, the lawmakers asked the CMS to reconsider its approach and provide better scrutiny and transparency of the data used to justify the OACT's conclusion. “It is not appropriate to apply a negative update for hospitals in any given calendar year and we urge CMS to work with Congress in order to ensure all annual updates remain positive,” they wrote.

Reps. Pat Tiberi (R-Ohio) and Richard Neal (D-Mass.) were the lead signers of the letter.

To contact the reporter on this story: Michael D. Williamson in Washington at mwilliamson@bna.com

To contact the editor responsible for this story: Brent Bierman at bbierman@bna.com

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