MedPAC Payment Recommendations to Congress
On Mar.15th, the Medicare Payment Advisory Commission (MedPAC) released its March 2016 Report to the Congress: Medicare Payment Policy. This report includes thirteen chapters of analyses of payment adequacy in fee-for-service Medicare. Some of the chapters review home care, hospice, skilled nursing facilities, and the Medicare Advantage program. MedPAC is required by law to review Medicare payment policies and make recommendations to Congress.
Home Health Care Services - According to the MedPAC report in 2014, about 3.4 million Medicare beneficiaries received care, and the program spent about $17.7 billion on home health care services. The report sees indicators of payment adequacy for home health care which is discussed in chapter 8, on page 209. Some of the highlights of the home health recommendations include:
Two recommendations from 2011 are continued in 2016. The first recommendation includes establishing a per episode co-pay for home health episodes that are NOT preceded by a hospitalization or post-acute care use. The second recommendation includes a co-pay of $150 per episode (excluding low-use and post hospital episodes) as per MedPAC it would reduce Medicare spending.
MedPAC recommendations also includes eliminating the payment update for 2017 and implementing a two-year rebasing of the payment system beginning in 2018. MedPAC suggests that the payment update should be eliminated again because of high aggregate Medicare margins for freestanding agencies. Their report states that in 2014, aggregate margins for these agencies averaged 10.8 percent.
Their report also recommends ending the use of the number of therapy visits as a payment factor in the prospective payment system when rebasing begins in 2018. It would raise payments for providers that provide therapy less frequently and lowering them for providers that deliver more therapy.
Hospice – MedPAC recommends eliminating the update to the hospice payment rates for fiscal year 2017. As stated in the report, their recommendation to eliminate the payment update in fiscal year 2017 would decrease federal program spending by $250-$750 million over one year.
Skilled Nursing Facility - MedPAC recommends elimination of market basket updates for 2017 and 2018 and suggests that Congress direct CMS to revise the Prospective Payment System (PPS) to more closely align payments with costs.
Medicare Advantage - MedPAC recommends elimination of the cap on benchmark amounts and ending the doubling of quality increases in specified counties. It suggests that Congress direct CMS to develop a risk adjustment model using two years of Fee-for-Service (FFS) and Medicare Advantage diagnostic data with a coding adjustment.
A fact sheet on the recommendations is available here, the full report is here.
Contact: Cheryl Udell, cudell@leadingageny.org, 518-867-8871 or Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841