Will the 2017 CMS payment update mean more independent practices?

Laura Dyrda -  

CMS released the 2017 proposed hospital outpatient payment rule last week, which included alignment in payment policies between physicians in hospitals and independent practices.

There could be less consolidation by large systems. The bigger hospitals and health systems have been growing through merger and acquisition over the past few years at a rapid pace, but there is less incentive for consolidation if payment is the same between the two settings.

 

Medicare would pay the same rates for independent practices as hospital-acquired practices, whether the services are in freestanding independent practices or off-campus hospital-owned practices. However, there would be an exception for emergencies.

 

“Providing similar payments for similar professional services located outside of a hospital campus, regardless of facility ownership, could lead to a more level economic playing field and help preserve independent practice,” said AMA President Dr. Andrew W. Gurman in the AMA’s response to the proposed rule. “The new policy is more equitable for patients, who CMS notes, often pay more for the same service provided in an off-campus department of a hospital.”

 

Physician medical group acquisitions dropped in the first quarter of 2016 according to an Irving Levin report. First quarter acquisitions dropped 18 percent compared to the fourth quarter of 2015 and down 25 percent when compared with the first quarter of last year.

 

However, the dollar volume was up 14 percent over the first quarter in 2015, hitting around $120 million.

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