Medicare proposes hospital outpatient pay rates

WASHINGTON Thu Jul 3, 2008 3:49pm EDT

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WASHINGTON (Reuters) - The U.S. government proposed a 3 percent inflation increase in 2009 Medicare rates for outpatient services at about 4,000 U.S. hospitals, which will also impact medical imaging, diagnostic and other health care services.

The Centers for Medicare and Medicaid Services, which spends billions on Medicare health insurance for 44 million elderly and disabled people, proposed the payment rates on Thursday for services done on an outpatient basis at hospitals, a rapidly growing segment in the industry.

The biggest publicly traded hospitals include Tenet Healthcare Corp, Community Health Systems Inc, Universal Health Services Inc, LifePoint Hospitals Inc and Health Management Associates Inc.

CMS expects to spend $29 billion on outpatient services for Medicare patients in 2009.

It will also set up new billing codes to pay for multiple imaging services, which will impact big imaging companies like General Electric Co, Siemens and Philips. The growth of imaging services such as ultrasound, three-dimensional CT scans and magnetic resonance imaging has been a target for Medicare and private insurance payers seeking to rein in escalating healthcare spending.

The government is also proposing new quality requirements, and will strip 2 percentage points off the inflation increase for hospitals that don't comply with reporting requirements. Such quality measures include such things as screening for fall risk and cancer care.

Comments on the proposal will be taken until September and a final rule will be issued by November.

More information on the Medicare proposal is posted online here and at www.cms.hhs.gov/ASCPayment/

(Editing by Braden Reddall)

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