Editorial: Fix federal reimbursement rates

If health care reform is going to work, there has got to be reasonable compensation for health care providers. Medicare and Medicaid are going the wrong way in Oregon.

Reimbursement rates for home health providers in Oregon get a 6 percent cut in 2013. If providers were being overcompensated, a cut would be fair. But this cut is due more to the way Medicare calculates reimbursement rates and the diversity in Oregon.

The rates are calculated based on wage data from seven hospitals across the state. Apparently the federal government told Oregon providers that the reason for the reduction was because the hospital in Coos Bay has much lower wage rates. The details of the calculation were not available.

We emailed and called the Center for Medicare and Medicaid Services on Wednesday. We did not get a response by deadline.

Getting reimbursement rates right isn’t necessarily easy. The federal government has changed the payment policy for home health services several times in the last decade. There have been concerns about abuse and incentivizing providers to maximize payments. That’s one of the dangers of paying for services, instead of outcomes. And at least one study of Medicare suggested that home health care providers “are not responding to variances in patient health but to the reimbursement system itself.”

We don’t want to take away anything from the federal government’s struggle to get payments right. But if there is a reimbursement issue that is so clearly wrong, such as this one in Oregon, CMS needs to take steps to make it right.

The entire Oregon Congressional delegation has written Marilyn Tavenner, the administrator for CMS, asking her to do something about this reimbursement problem.

“We do not consider this an issue of increasing or decreasing provider reimbursements, but rather one of ensuring that those reimbursement rates are set using data that are not only accurate, but also relevant to local communities,” the collective news release said.

Fix it CMS.