Medical Colleges Urge Congress to Reject Proposal to Cut Payment for E&M Services

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The nation's medical colleges are urging Congress to reject a proposal by House Republicans to reduce payments to hospitals providing evaluation and management (E&M) services to patients.

In a Jan. 13 letter to conferees appointed to draft legislation extending the payroll tax holiday and increasing Medicare reimbursement to physicians, the American Association of Medical Colleges said a proposal in a House bill (H.R. 3630) to help pay for an increase in doctors' pay by reducing reimbursement to hospital outpatient departments (HOPDs) for evaluation and management services should be rejected.

The House bill would have reduced Medicare payments to hospital outpatient departments for E&M services to the level paid for the services delivered in physicians' offices, which would have saved $6.8 billion over 10 years.

The proposal was dropped when the House accepted a Senate payroll tax bill. President Obama Dec. 23 signed payroll tax cut legislation (Pub. L. No. 112-78) that defers until the end of February a scheduled 27 percent Medicare pay cut for physicians that was due to be implemented Jan. 1.

The law also extends for two months expiring Medicare payment provisions for numerous providers, including hospitals, nursing homes, and ambulance service providers.

A 20-member House/Senate conference committee is expected to begin meeting soon on a possible full-year extension of the payroll tax holiday and the physician pay fix (8 HCDR, 1/13/12).

Reduced Access to Care

AAMC said it is “very concerned that proposed HOPD reductions will result in reduced access to patient care and would adversely affect medical resident training in these facilities.”

The group said the proposed HOPD cuts “are counterproductive, as they are likely to result in the closure of some HOPDs and the reduction of services in others, greatly affecting the vulnerable populations—especially those with complex medical problems—that receive care there, and limiting the ability to train the next generation of health professionals in these outpatient settings.”

The Medicare Payment Advisory Commission Jan. 12 recommended outpatient hospital payments for E&M be reduced starting in 2013 (8 HCDR, 1/13/12). To ease the transition, the payment reduction would be phased in over three years.

Hospitals have rejected the recommendation, and AAMC in its letter to lawmakers said that although many aspects of the HOPD payment system “warrant exploration,” further study should be conducted to gauge the possible negative impact on hospital outpatient finances and operations of reducing pay for E&M services.

For More Information

The letter is at

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