Today, the Medicare Payment Advisory Commission (MedPAC) released its June 2015 Report to Congress. These annual reports serve as an invaluable resource for the Congressional committees with jurisdiction over the Medicare program.

Specifically, the report had the following to say about the current status of hospitals in the Medicare program:

“Short inpatient stays have been scrutinized by [Recovery Audit Contractors] RACs because Medicare generally pays more for short inpatient stays than for similar outpatient stays, and these inpatient stays are highly profitable.

“Medicare could develop . . . site-neutral payment—that is, equalize payments across settings—for similar short inpatient and outpatient stays.”

The Ways and Means Committee released a discussion draft that would pursue this suggested site-neutral payment solution and would create a new payment system for hospitals.

MedPAC’s June report said the following about a new payment system for hospitals:

“Site-neutral payment for surgeries could be carved out of the IPPS [inpatient hospital payment system] and OPPS [outpatient hospital payment system] and moved into a separate payment system.”