MedPAC asks Congress to adopt site-neutral post-acute payments


The Medicare Payment Advisory Commission will recommend Congress lower the payments to all post-acute care settings except long-term care hospitals and look to adopt smaller, site-neutral policies that should be phased out if and when a unified payment system is implemented.

Industry associations, despite generally agreeing with a post-acute care prospective payment system, cautioned against taking such action before factoring in the impact of the current updates and the pandemic.

Presenting the draft recommendation last week, the commission tasked with evaluating the prototype payment system said the biggest hurdle was the varying payment adjusters of site-specific policies included in its design.

“Each [companion] policy is likely to be controversial, require considerable resources to develop and take many years to implement,” said Carol Carter, principal analyst at MedPAC, during the commission’s monthly meeting.

The commission recommended the Centers for Medicare and Medicaid Services implement simpler, setting-agnostic policies on a smaller scale and, while CMS phases out those policies, lower the payment levels for skilled nursing facilities and home health and inpatient rehab facilities as they exceed care costs .

Given the high payment variance between settings despite having a patient base with similar conditions and comorbidities, Congress tasked MedPAC with evaluating a prototype payment system for all post-acute care providers–skilled nursing facilities, inpatient rehab facilities, home health and long-term care hospitals–that would be based on patient characteristics, not the setting, and use patient stays as the unit of service with a common set of risk adjusters.

The separate payment plans not only make the quality measures and patient assessments difficult to compare but, before the recent updates to the setting-specific prospective payment systems, also gave way for long-term care hospitals to admit more patients with less severe or complex conditions and incentivized nursing homes and rehab facilities to push unnecessary therapies. The prototype’s design also includes a separate adjuster for home health care and no adjusters for rural facilities, low-income beneficiaries or those with previous hospital stays.

Carter said the prototype’s design should also include a performance-based value incentive program that would include patient experience and social risk measures. She warned, however, that separate payment adjusters would weaken the PPS’ uniformity, noting the contentious tradeoffs in standardizing benefits and cost-sharing across all post-acute care settings.

As much as post-acute provider groups seem to be on board with a uniform payment system, they remain concerned about using data sets from before the pandemic–particularly with the disproportionate impact that COVID-19 had on nursing homes.

While also concerned with the potential costs associated with the upcoming staffing mandate in June, home health providers and skilled nursing facilities are still contending with the phased-in patient-driven models now in their second year of parity adjustments.

“The impact of new payment systems implemented in both skilled nursing and home health care are both in the assessment phase and undergoing parity adjustments. Ideally, before a unified payment model is considered, the impact of those payment systems must be understood,” said Janine Finck-Boyle, vice president of regulatory affairs for LeadingAge, the association of nonprofit providers of aging services, in an email.

“But done right and done well, we believe a PAC unified payment model holds promise and could result in more choices for people who need post-acute care,” Finck-Boyle said.

The American Health Care Association and National Center for Assisted Living also cautioned against taking any action too soon.

“While we appreciate efforts to modernize and improve Medicare payment accuracy and adequacy, we are concerned about CMS’ observations surrounding challenges with the prototype and urge policymakers to refrain from any action until those challenges have been addressed,” the groups said in an email.


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