The Medicare Payment Advisory Commission (MedPAC)
has released recommendations to Congress regarding how Medicare
fee-for-service payment system rates should be adjusted in 2018.
One of the focus areas for MedPAC is post-acute care (PAC), which
includes skilled nursing facility (SNF), home health agency (HHA),
inpatient rehabilitation facility (IRF), and long-term care
hospital (LTCH) services. According to MedPAC, the
"unnecessarily high level of spending and the inequity of
payments across different types of patients" necessitate
changes to both payment levels and overall system design. MedPAC
therefore reiterates its
previous recommendation for a uniform Medicare PAC prospective
payment system (PPS) that bases payments on patient
characteristics; MedPAC believes that transition to the PAC PPS
could begin as early as 2021. In the meantime, MedPAC recommends
Eliminate SNF PPS
increases for fiscal years (FY) 2018 and 2019 and implement
previous SNF PPS reform recommendations intended to increase equity
in payments for different types of stays. Congress should revisit
the reforms in 2020 to determine if additional adjustments are
needed to more closely align payments with the costs of efficient
Reduce home health
payment rates by 5% in 2018, rebase payments beginning in
2019, and eliminate the use of the number of HHA therapy visits as
a factor in payment determinations.
Reduce Medicare IRF
PPS rates by 5% for FY 2018.
Eliminate the LTCHPPS update for FY 2018.
The Commission estimates that its PAC recommendations would
reduce Medicare spending for these four payment systems by more
than $30 million over the next 10 years. In other areas, MedPAC
recommends that Congress:
Direct the Secretary of the
Department of Health and Human Services to increase
inpatient and outpatient hospital payments by the
amount specified in current law (MedPAC projects a 1.85% hospital
update, subject to change). MedPAC also endorses requiring
hospitals to add a modifier on claims for all services provided at
off-campus stand-alone emergency department facilities.
Increase payment rates for
physicians and other health professionals by the
amount specified in current law (0.5% for calendar year 2018).
Eliminate the ambulatory
surgical center (ASC) and hospice payment
update for 2018 and require ASCs to submit cost data.
Increase the outpatient
dialysis base payment rate by the update specified in
current law for 2018 (market basket, net of a productivity
adjustment, minus 1 percentage point).
Finally, the MedPAC report includes data-rich chapters on the
status of the Medicare Advantage and Medicare Part D prescription
drug programs. MedPAC recommends that the Secretary calculate
Medicare Advantage benchmarks using fee-for-service spending data
only for beneficiaries enrolled in both Part A and Part B. MedPAC
also reiterated its June 2016, recommendations to address Part D
MedPAC's recommendations are not binding, but Congress and
CMS consider these options when updating Medicare payment
This article is presented for informational purposes only
and is not intended to constitute legal advice.
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