At its January meeting, the Medicare Payment Advisory Commission (MedPAC) voted unanimously to approve a recommendation to Congress that the differences in payments between outpatient departments and physician offices for 66 Ambulatory Payment Classifications (APCs) be reduced or eliminated. The services include imaging, procedures such as small-intestine endoscopy, tests including bone density tests and other kinds of care.  The change would mean a 0.6% drop in Medicare revenue for hospitals.

MedPAC Commissioners have previously stated that if the same service can be safely provided in different settings, Medicare should “safeguard taxpayers’ money and refuse to pay more for the service in one setting than in another.” The goal of the MedPAC recommendation is to reduce the incentive for providers to use the highest-cost settings.

The recommendation will officially appear in the Commission’s Report to Congress scheduled to be delivered in March.  If the MedPAC recommendation were to be approved, Medicare and Medicare beneficiaries could save as much as $1.1 billion per year according to the Commission’s analysis.

MedPAC is an independent Congressional agency established to advise the Congress on issues affecting the Medicare program.

Thanks to Bill Finerfrock, Matt Reiter, Zhaneta Mansaku for their contribution.