MedPAC's 2017 Report to Congress

The Medicare Payment Advisory Commission (MedPAC) has posted its annual report to Congress and is once again asking to reduce home health payment rates by 5 percent in 2018. It is also requesting that a two-year rebasing be implemented starting in 2019. Additionally, MedPAC is recommending that the prospective payment system (PPS) be revised to eliminate the use of the number of therapy visits as a factor in payment determinations, concurrent with rebasing. For the last five years, MedPAC has recommended eliminating the use of the number of therapy visits as a payment factor. It is also recommending that Congress eliminate the increase in hospice payment rates for fiscal year 2018.

In Chapter 9 of the report (Home Health Care Services), MedPAC cites that in 2015, about 3.5 million Medicare beneficiaries received care at a cost of $18.1 billion, and the volume of services increased by 0.3 percent. In its review, MedPAC found that between 2014 and 2015, Medicare spending increased by 2.3 percent. The Commission also found that for over 10 years, Medicare payments have exceeded costs in the home health PPS. Per the report, this is due to two factors: (1) agencies have reduced episode costs by lowering the number of visits provided; and (2) cost growth has been lower than the annual payment updates for home health care. MedPAC stated that there has been chronic Medicare overpayment and suggests that its two recommendations will help to better align payments with actual costs without impeding access to home health care services.

LeadingAge NY has several concerns with MedPAC's recommendations, including not continuing the 3 percent rural add-on. It explains that the rural add-on should not be extended because it is poorly targeted and most of the funds are paid to rural areas with high utilization levels. Once again, rather than addressing the problem in those areas, MedPAC puts the entire add-on in jeopardy.

The impact of what is being proposed by MedPAC is lowering payments by $750 million to $2 billion in 2018.

LeadingAge NY remains concerned with MedPAC’s recommendations and will work with LeadingAge National on advocating against the suggested changes.

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