A bipartisan group of 189 members of Congress this week sent two letters to CMS Administrator Mark McClellan urging his agency to delay until fiscal year 2008 proposed changes in Medicare payments for inpatient hospital procedures, Dow Jones reports (Kamp, Dow Jones, 7/13). CMS in April proposed the changes, which include the closure of loopholes used by specialty hospitals and a plan to replace the current charge-based reimbursement system with a cost-based system. Under the proposal, the cost-based reimbursement system would take effect in October, and severity-adjusted payments -- which would pay hospitals more for treating sicker patients -- would take effect in October 2007. Senate Finance Committee Chair Chuck Grassley (R-Iowa) and ranking member Max Baucus (D-Mont.) last week also sent a letter to McClellan urging a one-year delay in the changes (Kaiser Daily Health Policy Report, 7/11). The changes would affect Medicare reimbursement rates for several inpatient procedures, including those that involve the implantation of medical devices such as stents and defibrillators. The letters -- one signed by senators on Wednesday and one signed by House members on Thursday -- both state, "We urge you to delay these changes until [FY 2008] in order to work with stakeholders in addressing any underlying methodological issues and to allow hospitals time to adjust their planning and business operations accordingly."

Response
According to Dow Jones, the letters "back complaints from within the [medical device] industry, where companies have noted problems with the methodology behind the CMS proposal and have urged a slower pace." Analysts said the changes likely will not directly affect medical device pricing, "but there is still broad investor concern that a squeeze on hospitals could send negative shockwaves back up the supply chain" to the manufacturers, Dow Jones reports (Dow Jones, 7/13). CMS spokesperson Peter Ashkenaz said the agency has received the letters and will respond to the lawmakers. He declined further comment because of the ongoing rule-making process (Carey, CQ HealthBeat, 7/13).