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Efficient hospitals operate on -2% margins in Medicare payments, MedPAC reports

March 15, 2019 / Susan Morse

The Medicare Payment Advisory Commission is recommending that payments in 2020 to acute care hospitals increase by 2 percent instead of the 2.8 percent expected under current law, and that the remaining .8 percent be used as a financial reward under a single quality incentive program. In also recommending that hospitals keep the money assessed in penalties from two quality incentive programs, MedPAC said overall Medicare payments to hospitals will be expected to increase above current law. Eliminating the penalty-only programs will remove about $1 billion in overall penalties that hospitals currently incur each year, MedPAC said. MedPAC is recommending that all four current incentive programs be replaced by the single streamlined hospital value incentive program, or HVIP.