MedPAC Continues Discussion on Unified Prospective Payment System for Post-Acute Care
March 29, 2016 11:48 AM
The Medicare Payment Advisory Commission (MedPAC) met in early March to continue its discussions on developing a unified prospective payment system (PPS) spanning the post-acute care (PAC) settings. As mandated under the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014, MedPAC is required to develop a prototype PPS, using the uniform assessment data gathered previously during the Centers for Medicare & Medicaid Services (CMS) Post-Acute Care Payment Reform Demonstration completed in 2011. MedPAC previously discussed this topic during its January meeting (see previous NAHC Report article here).
According to MedPAC staff, the prototype predicted very similar relative costs of stays for most groups and explained similar shares of the variation in costs across stays. MedPAC also found that the administrative data can be used to establish accurate relative weights for most groups and estimate the impacts of a PAC PPS. However, MedPAC found certain groups had average predicted costs that deviated from average actual costs, which “may warrant payment adjustment,” including unusually short stays (to prevent large overpayments), and high-cost outliers (to protect providers from large losses). MedPAC also found differences that “may warrant further study” including low-volume, isolated providers (to ensure access) and extremely sick patients (to ensure access).
MedPAC has stated that payments for stays in home health will need to be aligned with the setting’s lower cost. MedPAC has offered little insight as to the nature or level of the adjustment that might be considered for home health services. However, it is safe to presume that the adjustment would lower the payment amount because other PAC settings include bed and board costs.
The Commission will hold another session concerning the PAC PPS in April 2016, with a formal vote expected at that time on the draft Report to Congress. MedPAC will finalize the report, which is due at the end of June 2016.
The National Association for Home Care & Hospice (NAHC) is open-minded with regards to the development of a unified PAC PPS. NAHC awaits further detail on the prototype, as the lack of detail that MedPAC has provided so far prevents a full assessment of its potential. NAHC’s position is that any such effort must:
Take into account that the majority of home health services do not meet the definition of post-acute care, based on the fact that many patients enter home health from the community rather than from an institutional setting;
Consider that, whereas all of the other relevant settings are under the control of the provider, the home is under the control of the patient, which creates different issues with regards to risk adjustment;
Recognize that home care for many patients is a clinically necessary setting, not just an acceptable one, based on the patients’ condition and the fact that they are protected by being at home;
Be developed with full transparency and fully tested for reliability.
Stay tuned to NAHC Report for further analysis of MedPAC’s efforts on a unified PAC PPS.