Recommendations of the Medicare Payment Advisory Commission (MEDPAC) on the Health Care Delivery System: The Impact on Interventional Pain Management in 2014 and Beyond

  • Manchikanti L
  • Benyamin R
  • Falco F
 et al. 
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Continuing rise in health care costs in the United States, the
Affordable Care Act (ACA), and a multitude of other regulations impact
providers in 2013. Despite federal spending slowing in the past 2 years,
the Board of Medicare Trustees believes that cost savings are only
achievable if health care providers are able to realize productivity
improvements at a quicker pace than experienced historically.
Consequently, the re-engineering of U. S. health care and bridging of
the divide between health and health care have been proposed beyond
affordable care.
Thus, the Medicare Payment Advisory Commission (MedPAC) envisions
alignment of Medicare payment systems to eliminate variable rates for
the same ambulatory services provided to similar patients in different
settings, such as the physician's office, hospital outpatient
departments (HOPDs), and ambulatory surgery centers (ASCs). MedPAC
believes that if the same service can be safely provided in different
settings, a prudent purchaser should not pay more for that service in
one setting than in another. MedPAC is also concerned that payment
variations across settings encourage arrangements among providers that
result in care being provided in high paid settings. MedPAC recommends
that payment rates be based on the resources needed to treat patients in
the most efficient setting, adjusting for differences in patient
severity, to the extent the severity differences affect costs.
MedPAC has analyzed the costs of evaluation and management (E&M)
services and the differences between providing them in a HOPD setting
compared to a physician office setting, echocardiography services, and
multiple services provided in ASCs and HOPDs. MedPAC has shown that for
an established patient office visit (CPT 99213) provided in a
free-standing physician's office, the program pays the physician 70%
less than in HOPD setting with a payment for physician practice of
$72.50 versus $123.38 for HOPD setting. Similarly, for a Level II
echocardiogram, HOPD costs 141% more for the same service than a
free-standing office ($188.31 versus $452.89). For interventional
techniques, Medicare payments vary from physician office to HOPD
setting, with $211.96 in an office setting, $407.28 in ASC setting,
and $655.62 in HOPD for procedures such as epidural injections.
The MedPAC proposal for changing HOPD payment rates for services would
reduce program spending and result in beneficiary cost sharing by $900
million in one year. On average, hospitals' overall Medicare revenue
will decline by 0.6% and HOPD revenue would fall by 2.7%. Further,
MedPAC provided a specific example that aligning payment rates between
HOPDs and freestanding offices only for cardiac imaging services would
reduce program spending and beneficiary cost sharing by $500 million in
one year. In estimating the savings that would be realized by equalizing
payment rates between HOPDs and ASCs for certain ambulatory surgical
procedures, MedPAC have shown potential Medicare program spending and
beneficiary cost savings to be about $590 million per year.
The impact of the proposed policies that are discussed in this
manuscript would result in savings of approximately $1.5 billion per
year for Medicare. MedPAC also has recommended a stop-loss policy that
would limit the loss of Medicare revenue for those hospitals.

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  • SGR: 84884685034
  • SCOPUS: 2-s2.0-84884685034
  • ISSN: 1533-3159
  • ISBN: 1533-3159
  • PMID: 24077189
  • PUI: 369903540


  • Laxmaiah Manchikanti

  • Ramsin M Benyamin

  • Frank J E Falco

  • Joshua A Hirsch

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