Full article reprinted from "The Gray Sheet" - May 11, 2009
Find out how medical device manufacturers are not expected to take a direct hit from Medicare inpatient hospital payment cuts next year, but possible cuts through 2012 could start to add pressure on manufacturers.
2010 Device DRGs Stable, But Longer-Term Hospital Cuts Could Make A Mark
Full article reprinted from "The Gray Sheet" - May 11, 2009
Medical device manufacturers are not expected to take a direct hit from Medicare inpatient hospital payment cuts next year, but possible cuts through 2012 could start to add pressure on manufacturers.
Under CMS' fiscal year 2010 inpatient payment proposal, released May 1, payments for device-related inpatient procedure categories would, for the most part, remain relatively flat, with some groups seeing single-digit increases.
Orthopedic firms "appear to be the biggest winners," J.P. Morgan device analyst Michael Weinstein states, citing reconstructive implant procedure payments set to increase by 3% and spinal procedure rates due for a 4%-5% boost.
Cardiovascular procedure payment adjustments would be smaller under the rule and unlikely to impact pricing dynamics, analysts say.
But the CMS proposal includes signals for future policy that give pause to device industry watchers and leave already struggling hospitals more acutely worried.
The proposed rule includes plans to update, for inflation, acute care hospital rates by an average of 2.1%. This falls below typical 3%-plus market basket updates and reflects the slowed economy.
On top of that, the update will be offset by 1.9% to correct for what CMS says were Medicare overpayments in 2008 that occurred in response to reforms to the hospital inpatient diagnosis-related group system that year.
With other adjustments contained in the rule, hospitals say they would expect a net payment cut of half of a percent, on average, in 2010. And CMS says there is likely more to come in the next several years.
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