Proposed Medicare Payment Update Won’t Hurt Devicemakers: Analysts

Devicemakers aren’t likely to see their bottom lines hurt by hospital payment updates proposed by Medicare, an investment analyst says.

The Centers for Medicare & Medicaid Services issued a fact sheet April 17 discussing major provisions of the proposed rule, which would affect some 3,400 acute care and 435 long-term care hospitals.

Reimbursement for devices such as implantable cardioverter defibrillators, pacemakers and drug-eluting coronary stents are all up by low single-digits, says Leerink Partners, an investment bank specializing in healthcare.

Among the companies listed in a Leerink report are Advanced Biomedical Technologies (heart assist systems), Boston Scientific (coronary stents, pacemakers), Medtronic (coronary stents, pacemakers) and Abbott Laboratories (coronary stents).

The proposal sets goals and a timeline to move Medicare toward paying providers based on quality rather than volume of care they give patients.

The CMS fact sheet discusses proposed fiscal year 2016 payment updates for inpatient stays at general acute care hospitals under the inpatient prospective payment system and long-term care hospitals under the long-term care hospital prospective payment system.

Total Medicare spending on inpatient hospital services will increase by about $120 million in fiscal 2016, CMS predicts.

The proposed rule would provide a 1.1 percent payment rate increase for general acute care hospitals that successfully participate in the Hospital Inpatient Quality Reporting Program and use electronic health records.

That rate increase and other proposed changes to IPPS payment policies will increase IPPS operating payments by 0.3 percent, CMS says.

Other payment adjustments include penalties for readmissions and for hospitals in the worst-performing quartile under the Hospital Acquired Condition Reduction Program.

The proposed rule also updates payments to hospitals for inpatient services based on performance of an announced set of measures.

CMS is proposing to add a care-coordination measure to the FY 2018 program year and a chronic pulmonary disease mortality measure.

For long-term care hospitals, CMS projects that PPS payments would decrease by 4.6 percent or about $250 million, based on proposed fiscal 2016 payment rates.

Cases meeting certain clinical criteria will see a 1.9 percent payment rate increase, the agency says.

The proposal will be published in the April 30 Federal Register, with a public comment period running through June 16. — Charlotte Astor