MedPAC Reviews Medicare Provider Data at December Meeting
(Dec. 17, 2024) The Medicare Payment Advisory Commission (MedPAC) is statutorily required to report to Congress each March regarding Medicare fee-for-service (FFS) payments made to various types of Medicare providers. This report usually comes with an evaluation of the adequacy of Medicare FFS payments to providers and recommends how payments should be updated for seven FFS payment systems including skilled nursing facilities (SNFs), home health agencies, and hospice providers (among others). While the recommendations are seldom implemented as presented, MedPAC reports may well influence the tone of funding discussions.
The commission met Dec. 12th-13th to hear staff presentations and discuss draft payment recommendations for 2026 on which the Commission will formally vote in January 2025. As has been the case in recent years, the draft recommendations called for flat or reduced reimbursement for home care, hospice, and SNF services. At the same time, the MedPAC Chair’s draft recommendations call for modest Medicare funding increases for hospital and physician services. Note that in their consideration of payment adequacy, MedPAC reviews data in four domains: beneficiary access to care, quality of care, access to capital, and Medicare payment coverage of costs. This review format is standardized across all of the service lines MedPAC analyzes.
For SNFs, the presentation suggested that while review of the four domains showed positive outcomes, there was a slight decrease in the availability of SNF services. The Chair seemed not troubled by a 2023 all-payer margin of 0.4 percent. The Medicare FFS margin was significantly higher, but the presentation did not explicitly consider the fact that with the advance of Medicare Advantage, Medicare FFS payments represent an ever-shrinking proportion of overall funding. The draft recommendation was for a 3 percent cut to Medicare FFS funding. The SNF presentation is available here.
The home health presentation also reported positive results in all four domains, stressing good access across the nation and suggesting a 2023 all-payer margin of 8 percent with Medicare margins higher than that. Despite recent cuts, the draft recommendation was for a 7 percent cut to Medicare FFS home health base payment rates. The home health presentation is here.
While the draft MedPAC recommendation did not call for hospice cuts, neither did it advocate for increases. Rather, it found that hospice providers were stable in the quality realm and positive in the other three other domains, calling for flat funding for 2026. The hospice presentation is here.
To reiterate, while these are draft recommendations that will not be finalized until January and will not be sent to Congress until March, it may be instructive for providers to be aware of the analyses being presented, especially in the context of a new administration.
Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841