CMS Takes Aim at 'Facility' Fees

Federal officials for more than a decade have let hospitals charge Medicare varying rates for certain emergency department overhead and staffing costs called facility fees-a controversial policy some critics believe invites overcharges.

Federal officials for more than a decade have let hospitals charge Medicare varying rates for certain emergency department overhead and staffing costs called “facility” fees—a controversial policy some critics believe invites overcharges.

Now, in a major turnabout, the CMS has proposed tighter controls over facility fees as part of a plan to redirect billions of dollars Medicare spends annually on outpatient care. Its proposal, though preliminary, is already drawing fire.

CMS officials want to replace five escalating price codes hospitals can choose from in billing facility fees with one flat rate, starting next year. The 2013 rates for ED facility fees start at $51.82 for a Level 1 patient visit and move up to $344.71 at the top range. For 2014, the CMS is proposing a new flat rate of $212.90 for ED visits, regardless of how intensive the treatment is. Doctor fees aren't affected.

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Source: Modern Healthcare