Teaching hospitals fight Medicare cuts

The letter comes after the Medicare Payment Advisory Commission (MedPAC), which advises Congress on Medicare payments, voted last week to recommend cuts to hospital outpatient departments that could save the government between $1 billion and $5 billion over the next five years. The proposal is seen as a possible offset for the so-called "doc fix," which costs about $30 billion for every year that scheduled cuts to physician Medicare rates are delayed.

MedPAC voted 15-2 last week to recommend that Medicare reimburse doctors' visits at the same rate, whether they take place in a hospital or a physician's office. The panel says Medicare currently pays 80 percent more for the same routine visit if it takes place in a hospital setting.

The AAMC in its letter says the impact of any cuts to outpatient departments should be studied before they are implemented, rather than after the fact, as proposed by MedPAC. The letter goes on to say that outpatient departments operated at a negative 9.6 percent average Medicare margin in 2010.

The hospitals, the letter argues, offer unique services not offered in physicians' offices, including coordinated care for patients with chronic or complex conditions, including cancer.

"Reducing support for [hospital outpatient departments] would create strains," the letter says, "and could impose barriers to continuing these important patient care coordination activities."