The Medicare Payment Advisory Commission released its annual report to Congress on March 15th, noting that most indicators of hospital payment adequacy were good but also found that the average Medicare margins were negative and expected to decline. The commission recommended that inpatient and outpatient hospital payments should be increased. It also recommended a controversial proposal to reduce Part B drug reimbursements by 10% to 340B hospitals.
Uncompensated Care Pool
The funds would then be diverted to the Medicare uncompensated care pool, which would be redistributed to hospitals with the highest uncompensated care rates. Hospitals have raised concerns about the recommendation over questions about MedPAC’s involvement on issues related to the 340B program. The 340B program is a non-Medicare program outside of the Commission’s jurisdiction. While the MedPAC recommendations are nonbinding, Congress often gives them serious consideration.1