BriggsNetNews

Mary Madison, RN, RAC-CT, CDP
Clinical Consultant – Briggs Healthcare

The Medicare Payment Advisory Commission (MedPAC) has released its June 2023 Report to the Congress: Medicare and the Health Care Delivery System. Each June, as part of its mandate from the Congress, MedPAC reports on issues affecting the Medicare program as well as broader changes in health care delivery and the market for health care services. This report also satisfies two additional legislative mandates (telehealth in Medicare and an evaluation of a prototype design for a post-acute care prospective payment system) and a congressional request regarding behavioral health services in the Medicare program. You may go to our website at www.medpac.gov to view the 10 chapters of the report, or follow the links below.

The June 15, 2023 News Release can be viewed here.

Entire report  (503 pages)

Executive summary(16 pages)

Chapter 1:  Addressing high prices of drugs covered under Medicare Part B (64 pages)

Chapter 2:  Assessing postsale rebates for prescription drugs in Medicare Part D(42 pages)

Chapter 3: Standardized benefits in Medicare Advantage plans(44 pages)

Chapter 4: Favorable selection and future directions for Medicare Advantage payment policy(50 pages)

Chapter 5:  Disparities in outcomes for Medicare beneficiaries with different social risks(24 pages)

Chapter 6:  Congressional request: Behavioral health services in the Medicare program(76 pages)

Chapter 7:  Mandated report: Telehealth in Medicare(50 pages)

Chapter 8:  Aligning fee-for-service payment rates across ambulatory settings(22 pages)

Chapter 9:  Reforming Medicare’s wage index systems(40 pages)

Chapter 10:  Mandated report: Evaluation of a prototype design for a post-acute care prospective payment(40 pages)

Appendix A:  Commissioners’ voting on recommendations(6 pages)

Chapter 10 is of interest to all PAC providers:

Here are some excerpts from the Chapter 10 Summary:

The Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014 mandated three reports on the design of a uniform prospective payment system (PPS) for post-acute care (PAC) providers—skilled nursing facilities (SNFs), home health agencies (HHAs), inpatient rehabilitation facilities (IRFs), and long-term care hospitals (LTCHs). The first report, completed by the Commission, was submitted to the Congress in 2016. The second report, prepared by the Secretary of Health and Human Services (referred to here as the Centers for Medicare & Medicaid Services/Assistant Secretary for Planning and Evaluation (CMS/ASPE) report), was issued in July 2022. The Commission is required to submit the third report by June 30, 2023. This chapter meets this final requirement.

While the development of a case-mix system was beyond the resources of the Commission, we evaluated key features of a PAC PPS design. The prototype developed by CMS/ASPE is consistent with most of the design features identified by the Commission and would provide a good foundation for a PAC PPS. However, the CMS/ASPE prototype includes adjusters that account for cost differences across the four settings. Though an adjuster for HHA stays would be needed to account for their very low costs (as noted above), including other setting adjusters would incorporate into the PAC PPS potentially unwarranted existing cost differences among the PAC settings, such as practice patterns that reflect the underlying incentives of the current PPSs rather than the care needs of the beneficiary. Including other setting adjusters would therefore undermine the goal of payment alignment across settings for clinically similar cases. That said, including setting adjusters in an initial design may be a reasonable transition policy to give providers time to adjust to a unified PPS. The Commission maintains that each adjuster in a payment system should have a conceptual relationship to the cost of care that is supported by evidence. Deviations from uniform design elements should be limited to those that counter systematic over- and underpayment that could threaten beneficiary access.

A transition to a PAC PPS would give providers time to adjust their costs to anticipated changes in their payments and regulatory requirements. However, managing multiple payment systems would be costly for CMS and could be confusing for providers. And while it is not the purpose of a PAC PPS, policymakers should consider lowering the level of aggregate payments to align them with the cost of care (assuming the Congress has not already done so). Reductions would be consistent with standing Commission recommendations to lower the base payment rates for HHAs, SNFs, and IRFs.

CMS would need the authority to undertake routine maintenance of the PAC PPS, if it is implemented, to reflect changes in costs and practice patterns. This upkeep should include regular revisions to the case-mix classification system (the groupings and their relative weights), rebasing payments so that payments remain aligned with the cost of care, and, as noted above, adjustments to address upcoding. Monitoring provider responses to the new payment system would help CMS identify potential refinements to the design that would help ensure quality of care and beneficiary access.

While designing a payment system is relatively straightforward, developing and implementing the companion policies that would need to accompany a PAC PPS would not be. Medicare’s benefit and coverage rules and cost-sharing requirements would need to be aligned across settings so that beneficiaries do not make treatment decisions based on financial considerations. Conditions (or requirements) of participation for providers would need to be aligned so that providers face the same costs associated with meeting them. (Given the noninstitutional nature of home health care, HHAs would likely need somewhat different regulatory requirements.) A new PAC value incentive program also would be necessary to help counter the incentives inherent in any PPS for providers to stint on needed care or generate unnecessary volume. Developing these companion policies could take many years; implementing them would be complex and possibly controversial.

The changes that CMS has implemented to the SNF, HHA, and LTCH PPSs in recent years have helped to reduce the incentives these providers had to furnish low-value care (including unnecessary rehabilitation therapy and paying LTCH rates to cases that do not require that level of service). Given the considerable resources that would be required to develop and implement a PAC PPS, policymakers may wish to look for opportunities to adopt smaller scale site-neutral policies that could address some of the overlap of similar patients in different settings.