Medpac Report to Congress: 2011

Earlier this week, Medpac (Medicare Payment and Advisory Commission) released its report to Congress.  Primary among Medpac’s duties is its provision of recommendations regarding payment updates under Medicare.  Below, I have broken out and summarized the recommendations.

Hospice (the points below the first bullet are continued recommendations from 2009)

• 2011 rate is the market-basket less a productivity growth adjustment (per the Commission) netting a 1.1% increase.
• The Commission recommends that Congress direct the Secretary to change the Medicare payment system to incorporate higher payments at the beginning of the stay and lower payments as the stay goes longer, with the exception of an increasing payment at or proximal to, the time of death. The recommended transition period is 2013.
• The Commission also recommends that the Secretary require a physician or advanced practice nurse visit prior to the 180 day recertification period with corresponding documentation from the physician (or alternate) that the patient’s prognosis remains terminal with a corresponding note providing clinical substantiation of such prognosis.
• The Commission recommends that the Secretary direct the Office of Inspector General to investigate the relationships (primarily financial) between hospices and skilled nursing facilities and assisted living facilities that lead to longer stays and increased benefit utilization.  The focus is to determine the appropriateness of hospice care provided within these settings by certain hospices that continue to demonstrate unusual referral and utilization patterns.

Skilled Nursing Facilities (SNFs)

• Eliminate the payment update for 2011
• Congress should establish a budget neutral quality incentive correlated to avoidable hospital re-admission rates and require SNFs to conduct patient assessments at admission and discharge.
• Require the Secretary to direct SNFs to more accurately report diagnostic and service-use information in claims (claim to include dates of service, detailed diagnosis information, and services provided since admission recorded separately in the patient assessment).  The Secretary should also require SNFs to report their nursing hours in the Medicare cost report.
• Medpac also recommended (continued from 2008) that the Secretary revise the PPS payment system by adding a non-therapy ancillary component and eliminate the current therapy component, transitioning thus to a therapy payment based on predicted patient care needs.  The Secretary should also adopt an outlier policy with corresponding payment.

Home Health

• Eliminate the market basket for 2011 and direct the Secretary to rebase rates to reflect the average cost of providing home care services.
• Direct the Secretary to modify the home health payment system to protect patients from reduced quality of care during re-basing.  The new payment system should include risk corridors and blended payments (prospective elements with cost-based elements).
• Direct the Secretary to identify categories of patients with the greatest probability of benefitting from home health and then develop quality measures for each category.

Inpatient Rehab Facilities

• Eliminate the payment rate update for 2011

Long-term Acute Hospitals

• Eliminate the update for 2011 for inpatient rehabilitation services.

Physicians

• Update payments for physician services by 1% for 2011
• Congress should establish a budget neutral payment adjustment (up and within the current fee schedule) for primary care services provided by primary care physicians.

Hospitals

• Increase inpatient and outpatient rates by the current market hospital market basket, concurrent with the start of quality incentive payment system.
• In order to re-capture overpayments to hospitals, the Secretary should reduce payment rates (inpatient) by the same percentage (not to exceed 2%) for each year beginning in 2011, continuing to 2013, or until the over-payments are recouped.

My only comment regarding the Medpac report is that it is a continuation of the theme from prior years where the Commission is recommending payment reform, stabilized increases and revised payment methodologies.  These recommendations go hand-in-hand with the Commission’s consistent determination that Medicare, primarily in Hospice, Home Health and SNFs, has been overpaying for care.  I firmly believe that Congress will follow most of the Medpac recommendations, sans an implementation of health reform which would likely incorporate (the current versions do), much of Medpac’s recommendations.

To read the full report, click on this link. http://www.medpac.gov/