MedPAC Supports Full Market Basket Increase with Value-Based Purchasing - January 26, 2010

At a January 14 meeting, commissioners of the Medicare Payment Advisory Commission (“MedPAC”) unanimously passed a recommendation that hospitals receive the full inpatient and outpatient market basket update for fiscal year 2011. However, MedPAC only supports a full market basket increase in combination with implementation of a quality incentive payment program (i.e., value-based purchasing). In addition, MedPAC adopted a recommendation that the Secretary reduce payment rates in the inpatient prospective payment system by the same percentage, not to exceed two percentage points, each year in 2011, 2012, and 2013. This reduction would recover overpayments related to documentation and coding improvements following the switch to the MS-DRG system in FY 2008. MedPAC’s recommendations can be accessed here.