MedPAC 2015 Report to Congress

On Friday, Mar. 13, the Medicare Payment Advisory Commission (MedPAC) submitted its annual report to Congress on recommendations to provide high-quality care for Medicare beneficiaries at lower costs to the program. The fact sheet highlights recommendations for several health care providers in Fee-for-Service (FFS) Medicare. They include: skilled nursing facilities, home care and hospice. According to the news release, "MedPAC recommends no update for 2016 for five fee-for-service payment systems: ambulatory surgical centers, outpatient dialysis, long term care hospitals, inpatient rehabilitation facilities, and hospice. For two sectors, skilled nursing facilities and home health agencies, it reiterates previous recommendations calling for an array of reforms including more equitably distributing payments among providers to ensure access for all beneficiaries, rebasing (lowering the base rate), creating incentives to improve quality, and increasing program integrity."

Specifics for each health care providers and other topics can be found in the full March 2015 report:

Chapter 2- Assessing Payment Adequacy and Updating Payments in FFS Medicare;
Chapter 7 - Medicare's Post-Acute Care - Trends and Ways to Rationalize Payment;
Chapter 8 - Skilled Nursing Facility Services;
Chapter 9 - Home Health Care Services;
Chapter 12 - Hospice Services; and
Chapter 13 - The Medicare Advantage Program: Status Report

For home health care, several points were made in Chapter 9 that include access to home heath care, which appears to be adequate, performance on quality measures, which did not change significantly, access to capital, which is a less important indicator of payment adequacy and most concerning was the view that, "for more than a decade, payments have been consistently and substantially exceeded costs in the home health prospective payment system." The article quoted percent margins of 12.7 percent in 2013, 17 percent from 2001-2013 and a projected margin of 10.3 percent for 2015. Again there is the recommendation for copays for episodes not preceding a hospitalization as a way to encourage appropriate use of the service.

In Chapter 12, it noted the number of hospices increased in 2013 by 5 percent, almost entirely by the number of for-profits hospices. Hospices aggregate Medicare margin was 10.1 percent in 2012 and is expected to be 6.6 percent in 2015. Similar recommendations from previous reports include hospice payment tied to the service intensity throughout the hospice episode, a higher rate at the beginning and the end of the episode and a lower amount in the middle of the episode.

Contact:Cheryl Udell, cudell@leadingageny.org, 518-867-8871