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April 14, 2015
Jill Rathbun
From the April 2015 issue of HealthCare Business News magazine
On the first Monday in February of any given year, it is a ritual in Washington, D.C. for the President of the United States to release the budget for the next fiscal year. This is the “official” start to the budget process that provides funding to both the mandatory and discretionary sides of the Federal budget. Coming in early April, both the House and the Senate traditionally come up with their own budget resolutions for the next fiscal year’s federal budget – and the grand debate begins.

For those that work in health care policy, the day corresponding to the release of the president’s budget is the day that we set aside time to scour the pages of this document to see what programs at the Department of Health and Human Services (HHS) are being proposed for reductions and what policy changes under Medicare are included that could lead to cuts in reimbursements to providers for the provision of various types of services. For imaging services, there are a couple of proposals that are of concern.

This first, and possibly the most problematic, is the concept of “site-neutral” payments. There are many different ways to analyze or “slice” this issue regarding what sites and services to compare. In general, policy of this type, comparing payments by site of service, is very complicated, and a little like comparing an orange to a tree, as the payment systems have different rules of construction and different sources from which the payments are developed. The president’s proposal in the 2016 budget would compare the reimbursement amounts for “off-campus” hospital outpatient departments to those of a physician office or an ambulatory surgical center, and cap the payment to the hospital at the lower amount. This type of comparison will potentially not work with regard to paying for the cost of the care actually provided to the patient.

In a hearing before the Energy and Commerce Committee on January 21, 2015, the American Hospital Association (AHA) rightly pointed out that the hospital outpatient payment system is moving away from a fee-for-single-service approach and instead is moving toward a prospective payment system that is larger payment bundles. So comparing the payment amounts of these bundles, that are meant to cover several services, with the payment amount under the physician fee schedule that is for a single service just does not make fiscal sense. There is also the extra obligation of these off-campus hospital outpatient departments to cover the costs of emergency room triage and care, as well as a set of patients that may have a higher acuity.

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