FOR IMMEDIATE RELEASE
May 08, 2006
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MEDICARE INPATIENT PROPOSAL THREATENS INNOVATIVE PATIENT CARE
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WASHINGTON, D.C. - The Executive Committee of AdvaMed met today and issued the following statements regarding the pending Medicare hospital inpatient rule:
"AdvaMed supports a more accurate payment system, and we are committed to working with CMS and all interested parties to achieve one. CMS has made a good faith effort to improve the current system," stated AdvaMed Chairman Edward J. Ludwig, Chairman, President and CEO of BD.
"Unfortunately, our preliminary analysis indicates that the proposed inpatient rule released by CMS threatens to reduce rather than increase payment accuracy, and it will in many instances impede access to innovative medical technologies that improve patient lives. Moreover, some critical procedures are cut as much as 20 to 30 percent. Small companies in particular rely on payment policies that are predictable and not subject to wide swings.
"The proposed inpatient rule represents the biggest change in the hospital payment system in the last twenty years. Therefore, it is critical that we get it right - and that patient access to the world's most innovative medical technologies is not jeopardized in the process. The proposed rule is unacceptable in its current form.
"No one at this point can identify with certainty all the impacts of the proposed rule. Medicare payment models are extremely complex, and the proposed changes contained in the rule are perhaps the most complicated to be attempted since the prospective payment system was initiated. The 60-day comment period, which ends on June 12, 2006, is not enough time to assess the full impact of the proposed rule. It will be difficult for CMS to explore potential remedies with interested parties and to consider corrective measures that will achieve the objectives of the rule."
AdvaMed President and CEO Stephen J. Ubl highlighted several specific areas of concern with the proposed rule:
"First, the proposed diagnosis-related group (DRG) calculations are based on data so old - three to five years - that it cannot reflect the rapid pace of medical device innovation. The data would not reflect, for example, drug-eluting stents that have only been in widespread use since 2004.
"Second, the accuracy of the proposed payment system depends on the reliability of current hospital cost reports. The current cost reporting system was developed for a cost-based reimbursement system by which hospitals were paid prior to the mid-1980s. Since the move to a prospective payment system was put in place, there have been few incentives for hospitals to assure that the cost reports are timely or that the internal allocations of costs are accurate. If CMS is to use hospital cost reports going forward, there needs to be a broad-based effort to enhance the accuracy and timeliness of the hospital-based data.
"Third, the rule has a number of technical errors and questionable technical assumptions that distort the estimated impact on payments. For example, CMS excluded data from a number of large hospitals from its analysis. If these data had been included, the very large swing in payments for some DRGs would be reduced by nearly 50 percent.
"Fourth, in too many cases, the proposed rule would reduce payments for the care provided to patients using advanced medical technologies. People from all over the world come to the United States for medical treatment because our advanced technology provides help and hope. It makes no sense to reduce incentives for the development and use of the treatments that have made us the world leader in medicine," Ubl concluded.
"The stakes are too high to rush through the most important and broad-sweeping proposed changes to Medicare payment policy in nearly twenty years," stressed Ludwig. "We urge CMS to work with all interested parties to fully assess the impact of its proposal and to make much needed changes before any proposal is considered as final. We would also urge CMS to re-evaluate the practicality of implementing such complex changes in payment policy, affecting millions of patients, in less than one-year."
AdvaMed member companies produce the medical devices, diagnostic products and health information systems that are transforming health care through earlier disease detection, less invasive procedures and more effective treatments. Our members produce nearly 90 percent of the health care technology purchased annually in the United States and more than 50 percent purchased annually around the world. AdvaMed members range from the largest to the smallest medical technology innovators and companies.
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