MedPAC Highlights Report for Developing a Unified PAC Payment System

During the September 10 public meeting, the Medicare Payment Advisory Commission (MedPAC) research staff presented an initial report, “Mandated Report: Developing a Unified Payment System for Post-Acute Care (PAC).”

The Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014, requires MedPAC to submit to Congress a report, no later than June 30, 2016, replacing Medicare’s four PAC payment systems for long-term care hospitals, inpatient rehabilitation facilities, nursing homes and home health providers.  The report must evaluate and recommend features of a new unified PAC prospective payment system (PPS) based on patient characteristics (such as cognitive ability, functional status, and impairments) instead of according to the setting where the Medicare beneficiary is treated.  The Act also requires data from the Center for Medicare and Medicaid Services’ (CMS) Post-Acute Payment Reform Demonstration (or other data), to be evaluated.

MedPAC Commissioners discussed materials they were presented, and provided guidance to staff on the overall approach to fulfilling the Congressional mandate.

MedPAC’s presentation also highlighted that the differences in coverage among the four settings requires two models to predict costs.  The home health agency (HHA) benefit does not cover non-therapy ancillary (NTA) services, such as drugs.  Given this coverage difference, MedPAC developed two models to predict cost per stay for:

  • Routine and therapy services
  • NTA services

The Commission will continue to discuss the PAC PPS report at future meetings.  It is anticipated that future presentation topics will address:

  • Further analysis by additional patient groups
  • Possible payment adjusters’ and an outlier policy
  • Changes to setting-specific regulatory requirements
  • A transition period
  • Companion policies to dampen the incentive to refer patients to unneeded PAC

The IMPACT Act requires the Secretary of Health and Human Services to collect common patient assessment data beginning in 2018.  After collecting two years of data, the Secretary of Health and Human Services (HHS), in consultation with MedPAC, shall also submit a report to Congress, recommending an approach for a PAC PPS.

Courtesy of NASL