As physicians are subsumed into hospital systems, they can get paid for
services at the systems’ rates, which are typically more generous than
what insurers pay independent doctors. What’s more, some services that
physicians previously performed at independent facilities, such as
imaging scans, may start to be billed as hospital outpatient procedures,
sometimes more than doubling the cost.

The result is that the same service, even sometimes provided in the
same location, can cost more once a practice signs on with a hospital.

Major health insurers say a growing number of rate increases are tied
to physician-practice acquisitions. The elevated prices also affect
employers, many of which pay for their workers’ coverage. A federal
watchdog agency said doctor tie-ups are likely resulting in higher
Medicare spending as well, because the program pays more for some
services performed in a hospital facility.

Cost curve up.

As discussed last week, the State of Maryland, which is the only remaining state that sets hospital charges, is reevaluating those rates. The State at the suggestion of the hospital association is considering raising rates while shifting costs from Medicare and Medicaid to the private sector. Kaiser Health News explains that if Maryland does not make a change that lowers Medicare costs then CMS may withdraw Maryland’s waiver from Medicare’s DRG rate setting system for hospitals . According to the article, that waiver allows Maryland hospitals to collect $1 billion more that they would if they were participating in the DRG system. CMS is using its leverage to urge Maryland to go big.

Federal officials are urging Maryland and its powerful health
industry to build on the state’s unique hospital rate-setting system to
develop sweeping cost controls – including those on doctors – that could
be used as a model for other states.

The proposals could eventually affect nearly every aspect of the
industry, and include rewarding doctors for cutting unneeded procedures
and pledging the state to keep per-capita Medicare costs rising more
slowly than those of the nation. 

The FEHBlog, who lives in Maryland, thinks that this big change will happen. The FEHBlog also believes that government price fixing doesn’t work.

The FEHBlog finally wants to point out that the Labor Department has improved its ACA web page which is the best place for one stop shopping for ACA related regulations, FAQs, model forms, instructions, etc. The ACA regulators, for example, have issued nine sets of FAQs which they number using Roman numerals like the Super Bowls. The FAQs have always been posted on the website but now the website provides one or two lines with the topics covered in the FAQa. The FEHBlog is grateful for the little things in lfe.