Published 8/1/2008

Second Look – Reimbursement and Regulation

MedPAC calls for bundled payment pilot
The U.S. Medicare Payment Advisory Commission (MedPAC) has recommended that the Centers for Medicare and Medicaid Service (CMS) conduct a voluntary pilot program to test bundled payment for all hospitalization services for select conditions. MedPAC said that such a pilot program would allow CMS to resolve design and implementation issues, while giving pro­viders who are ready the chance to start receiving a bundled payment.

CMS had previously announced a new demonstration project for hospitals to test the use of a bundled payment for both hospital and physician services for a select set of episodes of care. The newly formed AAOS Health Care Systems Committee will continue to monitor this issue as it develops.

EMTALA proposal would let hospitals share resources
CMS has proposed adjusting its on-call policies under the Emergency Medical Treatment and Labor Act (EMTALA), which was designed to prevent emergency departments (EDs) from “dumping” uninsured or Medicaid patients at public hospitals. The proposal would give a group of hospitals in a particular region the option to designate one of the facilities as the on-call site for a specific time period, a specific service, or both. Individual hospitals with EDs still would be required to screen each emergency patient and have a plan for how to proceed if a needed on-call physician was not available. The AAOS has submitted a comment supporting this proposal.

Report examines effects of reduced NIH grants
The amount of research funding provided by U.S. National Institutes of Health (NIH) has stagnated in recent years and is having a negative effect on state economic activity, according to a report by Families USA, a not-for-profit healthcare advocacy group. The report says the stalled funding is due in part to budget constraints and “misplaced” priorities within the current administration. Although the value of the research awards varies greatly from state to state—from California’s high of $3.5 billion to Wyoming’s low of $7 million—they have a significant effect on state economies. NIH investments in 2007 more than doubled new state business activity: every $1 million invested in research generated approximately $2.21 million of activity.