Under current law, a hospital might purchase a physician group practice located five miles away from its campus. Before the purchase, services to Medicare beneficiaries were billed as physician office visits and paid according to a fee schedule. Now, the hospital labels the same services, in the same office, by the same physicians, as HOPD visits. It bills Medicare for the fee schedule amount the independent physicians used to get. But in addition , it bills Medicare for hospital overhead costs.
Beneficiaries also get bigger bills than before.
And, there is one less independent physician practice to compete with the hospital by offering lower-cost services. They are driving out the healthy competition and profiting by overcharging Medicare and its beneficiaries. Medicare and its beneficiaries should not pay more for the same services just because they are called something different. In order to give hospitals time to prepare for this change, these provisions would not take effect until January 1, 2000. Hospitals are shifting costs for inpatient and emergency care onto outpatient care.