March 2016 MedPAC Report and Recommendations Released to Congress, Eliminates Payment Updates Across All PAC Providers

This past week the Medicare Payment Advisory Commission (MedPAC) released its report to Congress which highlights a number of fee-for-service payment recommendations.  Key MedPAC recommendations specific to post-acute care providers include:

• Eliminate market basket update for skilled nursing facilities (SNFs).  This recommendation is for both 2017 and 2018 and directs the Secretary to revise the prospective payment system (PPS) for SNFs.
• Eliminate payment update for home health agencies (HHAs) in 2017 with implementation of two-year rebasing of payment beginning 2018.
• Eliminate payment rate update for inpatient rehabilitation facilities (IRFs) in 2017.  The Secretary should also conduct audits of IRFs with unusual patterns of case mix and coding as well as expand the outlier pool to redistribute payments more equitably across cases and providers.
• Eliminate payment rate update for long-term care hospitals in 2017.
• Eliminate the update to hospice payment rates in 2017.

An update was also provided on the status of a unified payment system for post-acute care and will be presented to Congress in June.  MedPAC and HHS would develop the new payment system to replace the current post-acute care prospective payment systems. These recommendations support site neutral payment policy with a goal that payment to post-acute providers be based on patient clinical characteristics rather than care setting based.