On April 5, the Medicare Payment Advisory Commission (MedPAC) issued a unanimous recommendation to decrease some urban outpatient hospitals’ Medicare payments, while increasing rural hospital payments to improve emergency department (ED) access in rural areas.

Specifically, MedPAC recommended implementing a 30% payment decrease to off-campus stand-alone EDs within six miles of an on-campus hospital ED. Under current Medicare payment rules, these off-campus stand-alone EDs receive Medicare payments equal to on-campus hospital EDs. The facilities are open 24/7, but MedPAC argues that their relative costs are lower than on-campus hospital EDs because they tend to be in wealthier areas with lower patient severity and lower standby costs. Currently, stand-alone off-campus EDs that are not open 24/7 are paid 30% less than their 24/7 stand-alone ED counterparts. Therefore, MedPAC argues, a 30 percent reduction to rates for 24/7 off-campus stand-alone emergency departments “is more consistent with policy objectives.”

Hospital industry groups voiced concern over MedPAC’s recommendation. In a letter to MedPAC, the American Hospital Association characterized the recommendation as “unfounded and arbitrary” and that the recommendation is based on data that is not representative of the country, and includes “no analysis of Medicare beneficiaries, Medicare costs or Medicare payments.”

The recommendation will be included in the panel’s next Congressional Report in June.