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Medicare Proposal Pays Hospitals A Fixed Price For Heart Attacks

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Medicare is offering to pay hospitals fixed amounts for heart attacks, following a proposal to pay set compensations for hip and knee replacements instead of letting healthcare providers bill for every service give to senior Americans, the Obama administration announced.

This new proposal is the most noteworthy extension of the Obama administration’s efforts at cutting costs and improving the quality of care Medicare funds, the Wall Street Journal reports.

Under this plan, hospitals that admit patients for cardiac care will be given a fixed price for all of the services provided in the hospital and within 90 days after discharge.

If the hospitals bill for less, they can keep the remaining amounts but if they bill for more, they will have to reimburse Medicare. The proposal also includes prices for hip and femur fractures.

If implemented, the proposal would be mandatory for almost all hospitals accepting Medicare beneficiaries in 90 urban areas. Health authorities said that they would take the proposal under consideration, but are suggesting putting the proposal into phases over a five-year period starting next July 1.

Medicare generally pays hospitals and doctors separately for each service, which has been criticized as a reason for overtreating patients. The White House announced in 2015 that within three years, it would transfer half of Medicare’s expenses from managed care into alternative contracts with new incentives to control hospitals’ and doctors’ spending.

The new proposal on heart attacks would increase the use of those alternative contracts, which accounted for 30% of Medicare spending as of January this year. But Medicare savings are expected to be small, just $170 million until December 2021. Medicare is projected to spend $13.8 billion on bypass surgery, heart attacks, hip and femur fractures during the five-year plan.

The proposal also expands Medicare’s use of the Affordable Care Act to push hesitant doctors and hospitals into new payment contracts. Medicare has begun to pay over 800 hospitals in 67 US markets a single, fixed amount for knee and hip surgery since April, including all care that patients received for the next three months after surgery.

The five-year plan was the first effort by Medicare to oblige hospitals to be paid a lump sum for patient bills incurred inside and outside the hospital, under the Affordable Care Act. Nearly 400 hospitals have volunteered for this proposal, while others have shown reluctance.

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