WASHINGTON -- In an effort to discourage unnecessary health services and control costs, the Bush administration plans to require hospitals to play a central role in arranging and billing for Medicare services, even when the services are performed outside a hospital.
A confidential memorandum summarizing new rules to be issued soon by the government was circulated this weekend at the Department of Health and Human Services.
It says the rules will require hospitals to "assume financial responsibility" for many of the medical goods and services that elderly people receive as outpatients after leaving the hospital.
The new requirement would apply to laboratory work, X-rays, CAT scans, magnetic resonance imaging, diagnostic tests and the rental or purchase of all sorts of medical equipment, such as wheelchairs and prosthetic devices.
Federal health officials say the changes will result in better-coordinated care for the elderly at lower cost.
But for the 34 million Medicare beneficiaries, the new rules could mean less freedom in choosing where to go for outpatient services.
Hospital executives express alarm at the change, viewing it as a costly administrative burden imposed by the government.
The new rules reflect the policy of the administration, supported by Congress, to bundle Medicare services together and pay for them as a package whenever possible.
Medicare officials say that will help control health costs because hospitals will negotiate discounts in return for agreeing to send their patients to particular suppliers and clinics. Hospital officials are concerned that such arrangements could be deemed anti-competitive or seen as kickbacks.
Federal health officials say the policy change can be made by regulation without any new laws. They have already revised the Medicare manual for hospitals to reflect the new policy.