MedPAC’s comment letter asks for reduced ‘behavioral offset’ rates

The formal comment letter that the Medicare Payment Advisory Commission (MedPAC) submitted to CMS recommended the following reduction in the proposed “behavioral offset” rates:

“For fiscal year 2008, we recommend that [CMS] adopt an adjustment that is between -1.6 and -1.8 percent per year (for at least the two years following adoption of MS-DRGs) to the standardized amounts to offset the expected impact of improvements in documentation and reporting of diagnosis.”

MedPAC is an independent federal body established to advise the U.S. Congress on issues affecting the Medicare program.

The MedPAC recommendations are substantially less than the 2.4 percent rate reduction that CMS asked for in its proposed rule. CMS’ proposed behavioral offset cuts have raised the ire of the several hospital associations and members of the U.S. Congress.

Other highlights from the MedPAC comment letter include discussions about:

• Alternative ways that CMS can compute DRG payment rates
• Terminating the transition to cost-based weights – adopting 100 percent cost-based weights, or adopting a two-year transition period for MS-DRGs that coincides with the remainder of the current transition period for implementing cost-based weights
• Reporting of hospital quality data and value-based purchasing
• Disclosure of physician ownership in hospitals and patient safety measures
• Payment for capital-related costs

The full version of the MedPAC comment letter can be accessed by clicking here .