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Lawmakers Seek 'PAC' Reform

Cheryl Clark, for HealthLeaders Media, August 30, 2013

Two Congressional committees are exploring the notion of post-acute care reform which may require further development of quality measures and refinement of assessment tools.

The problem with the way Medicare tries to incentivize high quality is that, for the most part, it's mainly providers in acute care who are under a financial guillotine, many hospital organizations complain.

Hospitals are the ones that suffer readmission penalties and relinquish money into a value-based purchasing pool some never get back. And it's hospitals that must anticipate further cuts for higher rates of hospital-acquired conditions starting next year, even if the way for those conditions were paved by inadequate home healthcare or skilled nursing providers.

So to remedy what some see as unfairness, two powerful Congressional committees this summer are looking at "PAC reform," that is, the creation of incentive programs that span the most important post-acute care segments of the industry: skilled nursing facilities, home health agencies, long-term care facilities and inpatient rehabilitation centers.

In 2011, for example, these healthcare segments received $61.6 billion to treat 5.6 million beneficiaries. But there is a wide variation in how many beneficiaries use those services, as well as the margin they earn from Medicare payment, according to statistics from a Medicare Payment Advisory Commission's (MedPAC) March, 2013 report to Congress.

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