US wants to revise setup for medicare payments
Washington — With medicare's hospital costs expected to soar 32 percent in the next two years, the Reagan administration says it wants to encourage states to adopt a new payment system that rewards thriftiness.
Under the government's payment proposal, hospitals would be paid a fixed fee based on a patient's diagnosis, keeping whatever money they did not spend. Medicare now reimburses hospitals for each service they render, such as X-rays, operations, and tests. Critics say the current system encourages hospitals to order needless treatment.