Outpatient prospective payment

In September of this year, the Health Care Financing Administration (HCFA) will present Congress with its recommendations for developing a prospective payment system for all Medicare outpatient services. Whichever plan is ultimately adopted, this system of payment will greatly impact the structure and management of outpatient services and, in particular, reimbursement for radiology services and use of technologies. While a system is perhaps at least two years away from full-scale implementation, providers are already witnessing diminishing reimbursement as a result of incremental payment changes since the early 1980's. With the across-the-board cuts of six percent for all hospital outpatient services, authorized for the first time last year by Congress, some providers are experiencing an escalation of payment short-falls. Further, if current experience with implementation of the inpatient prospective payment system is replicated in the outpatient arena, payments will not only be less but they will be dramatically different for various providers. Since implementation of DRGs, Medicare has achieved savings of $18 billion for inpatient care. While some hospitals have reported their best years financially, others are consolidating or closing. A prospective payment system for outpatients will also have such "winners and losers," but as a single policy initiative it will probably have a greater impact than both DRGs and the resource-based relative value scale (RBRVS) combined. Because fixed payments for inpatients have proliferated the push to outpatient care, a DRG-like system for outpatients will result in capping payments for the entire continuum of services provided in hospitals.(ABSTRACT TRUNCATED AT 250 WORDS)