1. Acute Care: Trends in Hospital and ASC Payment Policy and Their Impact on the Device Industry
Parashar Patel
Health Economics & Reimbursement
Boston Scientific
Medical Device Congress
March 29, 2007 MD

2. IPPS OPPS ASCs The Road Ahead
Inpatient payments: the journey continues
Outpatient payments: the road already traveled?
Ambulatory surgical centers: rest break over?
OPPS
ASCs

3. Inpatient: the journey continues
Major Policy Issues
From costs to charges to costs
Transition to cost-based weights, starting FY 2007
How much variation is too much?
“traditional standardized charges”…HSRV…HSRVcc…???
Severity versus complexity
CMS-DRGs…APR-DRGs…CSA-DRGs…???
How well do they recognize current technology?
How well will they recognize future technology?
From IME to P4P
Don’t forget the big (literally!) picture: ….how much is the update…and what should it pay for?
So What?
Manufacturer
Will our customers have ability to provide new treatments?
Hospital
I can use redistribution to squeeze price from my vendors!

4. Outpatient: the road already traveled?
Major Policy Issues
Cost-based weights since inception (2000)
Spending out of control, again!
Lower growth in services but complexity increases
Cost-based rates not accurate enough?
So What?
Manufacturer
If not inpatient and if not outpatient, then where?
Hospital
I’m getting squeezed on both sides, so what can you do for me?
Do I look elsewhere…maybe ASCs?

5. ASCs: rest break over? Major Policy Issues
Costs or equal payments across sites of service?
OPPS=ASC=MD Office?
Should reflect costs…but what is cost?
GAO…MedPAC…FASA…CMS…???
How well does system recognize current technology?
How will system recognize new technology?
What about quality and P4P?
So What?
Manufacturer
If not in the hospital, then the ASC?
Hospital
Will new ASC system drive services to ASCs?
“Great!!” OR “Why are we left holding the bag??”

6. ANSWERS?