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The report issued by the Government Accountability Office (GAO) to the Congress turns out to be in favor of neutral payments. The report addressed the increasing trend of consolidation within the healthcare industry. There is growing number of instances where physician practices merge with other entities or hospitals purchasing physician practices.

According to the report, there has been significant increase in the consolidation practices of the aforementioned types from 2007 to 2013. This was observed throughout the country. During this period, consolidations in the form of purchasing physician practices increased from 1,400 to 1,700. By the end of 2013, the total number of physician practice consolidations reported in the country was 182,000, almost a double of 96,000 in 2003.

GAO’s report also speaks about the expenditure for HOPD (Hospital Outpatient Department). It observes that there has been a steady rise in the expenditure over the last few years. As long as the policy makers are concerned, they tend to question whether the hikes have any links with the services that are held in physician offices. GAO is now investigating about the effect of the consolidations on Medicare schemes.

To arrive at the conclusions, GAO has used a number of variables and methods. This includes regression analysis, data collected by American Hospital Association, data from CMS, etc. These data have helped the office to figure out the type of agreements the hospitals held with hired physicians.

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According to GAO, the growing trend of consolidations is a result of financial incentives. As of now, the hospitals that consolidate physician practices are able to bill at higher reimbursement rates. After the merging, the hospitals will bill their services as a hospital outpatient department.

The report further observed that merged hospitals billed their services $51 higher than a physician’s office. But the GAO report does not surprise anyone who has a general idea about common billing rate at a physician practices.

Meanwhile, healthcare departments are working now on a number of policies and healthcare payment and coverage options. These policies are designed to help hospitals to keep the number of patients out to the minimum via coordinated and preventive care. It is believed that the implementation of these policies would reduce unnecessary department visits and inpatient admissions. This would in turn will mean that the funds are used for physician/community based care rather than hospital-based care.

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