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MedPAC Calls for Pay Raise for Doctors, Hospitals

Cheryl Clark, for HealthLeaders Media, March 16, 2011

It also recommends that CMS improve quality measurement for SNFs by adding risk-adjusted rates of potentially avoidable re-hospitalizations and community discharge and report more accurate diagnostic and service-use information. Additionally,

  • Home health services should be reviewed with more quality measures that focus on specific conditions to assess home health quality. Also, HHS and the Office of Inspector General should review home health utilization in counties that have "aberrant home health utilization." MedPAC said, "fraud has become a significant concern in the home health benefit."

The commission says the payment system for home health agencies is "flawed and creates incentives for patient selection." Also, "the current case-mix system may, in effect, overvalue therapy services and undervalue non-therapy services," flaws HHS should address.

Beneficiaries, the recommendations say, should be required to share in the cost of home health care, "which would make the beneficiary more apt to consider the value of the benefit and share in decision-making about when to use home health services," that "should be applied to home health episodes not preceded by hospitalization or post-acute care."

The 2012 market basket pay update for home health care should be eliminated for 2012 because the number of facilities has increased "to an all-time high and Medicare's payments have exceeded their costs by 18% – the 10th consecutive year they have been in this range."

Other MedPAC recommendations are:

  • Inpatient rehabilitation facilities would not get a pay update because they "will be able to absorb cost increases and continue to provide care to clinically appropriate Medicare cases." Medicare beneficiaries now have sufficient access to IRF facilities.

  • Long term care facilities would not receive an update; their numbers have increased 6.6% from 2008 to 2009 despite a limited moratorium on new facilities and new beds in existing ones extending to Dec. 28, 2012, and access is not a problem.

  • Hospice facilities would receive a 1% payment update, however the OIG should "investigate the prevalence of financial relationships between hospices and long-term care facilities, differences in patterns of nursing home referrals to hospice, enrollment practices at hospices with aberrant utilization patterns and hospice marketing and admissions practices and their relation to length of stay."
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