Medicare to Pay Flat Rate for Clinic Visits

CMS-logo-smallCMS has decided to pay flat rates for Medicare visits to outpatient clinics instead of tiered payments that vary with the nature of the patient’s condition, despite recent criticism from hospitals and doctors. For the time being, however, CMS has decided not to implement a similar policy for emergency-room visits.

This rule, posted the Wednesday before Thanksgiving, announced that the agency is changing its longstanding approach to paying for clinic visits due to widespread concerns that the old system encourages upcoding.

No longer will there be 10 procedure codes for outpatient clinic visits, instead these will all fall under a single code.

“A single code and payment for clinic visits is more administratively simple for hospitals and better reflects hospital resources involved in supporting an outpatient visit,” an agency press release said.

Critics argued that by moving away from the five-level system for Medicare’s severity-based system that this new rule is contradicting the central notion of the current system. CMS officials said the variation in costs due to the complexity of the patient’s issues were not significant enough to justify the payment margins.

CMS did take a step back from its proposal to flatten the payment rates for ER treatments, noting in the rule that more research is needed to make sure the payment structure “would not under-represent resources required to treat the most complex patients, such as trauma patients.”

The American Hospital Association said the move to a flat system of outpatient clinic payments would hurt hospital’s ability to provide outpatient care.

“Hospitals that provide care for large numbers of complex patients will receive payment well below the cost of treating these patients,” the AHA said in a statement.