Should hospitals get paid more than physicians and surgery centers for providing the same services?

There seems to be the use of inexact subsidies without real clarity as to the final goal or aim, leading one to ask: Is the goal of higher rates for hospitals to support hospitals financially? Should this be a goal in and of itself?

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On average, ASCs are paid about 50 percent of what hospitals are paid for the same procedure. Hospitals argue that this extra payment is in exchange for all the other things that hospitals do (e.g., trauma and specialized care, uncompensated care, etc.) and is necessary for hospital financial survival. Physicians and providers assert that these subsidies are unfairly beneficial to hospitals and subsidize hospitals’ ability to employ physicians and move business to hospitals.

This spring, The Office of Inspector General recommended CMS seek legislation to make it possible to reduce hospital outpatient department rates. CMS disagreed with the OIG recommendations, which may be in part due to the financial stress already facing hospitals. Also, CMS may be more subject to politics than the OIG.

In some ways the differences in rates for the same procedure in different settings reflect the bastardization of healthcare policy.

Answered on June 12, 2017.
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