MedPAC calls for reduced payments to inpatient rehab and others. From MedPage Today.
This article first appeared March 15, 2017 on MedPage Today.
By Shannon Firth
WASHINGTON -- Congress should reduce payments to home health agencies and inpatient rehabilitation facilities by 5% in 2018, according to a new report from the Medicare Payment Advisory Commission (MedPAC).
The report released Wednesday also advised that currently mandated payment updates for long-term care hospitals, hospice, and ambulatory surgical centers for 2018, and for skilled nursing facilities in 2018 and 2019, be scratched.
The report justified shrinking payment for agencies because of "chronic overpayment," noting that payments have outpaced costs for more than 10 years.
The commission also recommended that Congress undertake the following to improve payment accuracy:
- Require ambulatory surgical centers to submit costs data
- Freeze payment for skilled nursing facilities for 2 years while the payment system is revamped
- Revise home health payment systems to exclude therapy visits as a factor in payment
- Expand the inpatient rehabilitation facility "outlier pool"
"In this report, we continue to make recommendations aimed at finding ways to provide high-quality care for Medicare beneficiaries while giving providers incentives to constrain their cost growth and thus help control program spending," said the commission chair Francis J. Crosson, MD, of Los Altos, Calif., in a press statement.
For ambulatory surgical centers, MedPAC noted that these entities currently do not submit data on the cost of their services, as other providers do, and this makes determining a Medicare payment margin – a measure that looks at the relationship between payments and costs of providing care for patients – challenging. The commission has suggested that Congress require submission of this data.
The report dedicated a special chapter to post-acute care payments. An accompanying MedPAC fact-sheet noted that enacting its March 2017 recommendations across all four PAC settings "would reduce [fee-for-service] Medicare spending by over $30 billion over the next 10 years."
In its June 2016 report, the commission recommended strategies for implementing a "unified PAC payment system" where payments depend on patient characteristics rather than the site of care.
For skilled nursing facilities and home health agencies, MedPAC has asked to eliminate payment increases for 2 years, and also that the secretary of the U.S. Department of Health and Human Services (HHS) submit a report to Congress detailing the effects of its prospective payment system. The goal is to ensure payments are directed to providers more fairly, potentially reflecting more medically complex cases, while also improving access for beneficiaries.
MedPAC also suggested that Congress expand the "outlier pool," which gives providers protection when serving "exceptionally high-cost patients." These payment also help to ensure beneficiary access to care.
As for Medicare Advantage, the Commission has advised Congress to direct the HHS secretary to estimate Medicare Advantage (MA) benchmarks according to data from beneficiaries who are enrolled in both Part A and Part B.
Current benchmarks for MA spending are based on beneficiaries enrolled in Medicare Part A coverage alone, who are often younger and healthier, and those covered by both Part A and B plans. However, enrollees in MA are required to have coverage for both Part A and Part B, which means the MA spending benchmarks may be inadequate for the beneficiaries the program actually serves.
For three other sectors and settings – physicians and other health professionals; inpatient and outpatient services; and outpatient dialysis – MedPAC suggested preserving the current updates set in current law since indicators across these groups have been mainly positive or adequate.
Indicators for determining payment adequacy include the following:
- Beneficiaries access to care
- Quality of care
- Provider access to capital
- Provider costs and Medicare payments, when available
The next MedPAC report is slated for June.