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Nursing Home Proposal Outlines New Value-based Payment Model

By Erin Mershon, CQ Roll Call

April 22, 2016 -- The Obama administration outlined a new way to pay nursing homes, the latest in its ongoing efforts to transition Medicare payments away from fee-for-service medicine.

The proposed rule, released late Thursday by the Centers for Medicare and Medicaid Services (CMS), outlined new quality measures and performance benchmarks for the program and also proposed timelines for when the agency would begin to measure the facilities based on the new standards. The program is set to apply to services performed on or after October 2018.

This value-based payment program "is an important step toward transforming how care is paid for, moving increasingly toward rewarding better value, outcomes, and innovations instead of merely volume," the agency said in the proposal.

The regulation also spelled out new details about a quality reporting program that will penalize nursing homes that don't report certain quality metrics to the agency, beginning in 2018. Both the value-based payment model and the quality reporting program were first outlined in a post-acute care overhaul passed in 2014 (P.L. 113-185).

Nursing homes are still evaluating the new plan and declined to weigh in at all on the proposed quality measures and payment program. But they eagerly praised the administration for a payment update of 2.1 percent, also spelled out in the proposal, calling it "essential."

"We are facing unprecedented pressures, and with MedPAC reporting our margins at only 1.9%, a failure to keep track with inflation would be devastating," said Mark Parkinson, president of the American Health Care Association, in a statement.

The agency also proposed payment updates for hospice centers and inpatient rehabilitation facilities, of 2.0 percent and 1.6 percent respectively. Proposed regulations for those industries also included new quality measures aimed at improving the data and measurement surrounding post-acute care.

Representatives for both industries noted that those measures will require substantial new data collection efforts, but said they were optimistic about the potential to improve patient care.

"Claims-based measures may actually help rehabilitation hospitals and units to learn more about the consequences of the care they have provided but are otherwise unable to have access to," said Bruce Gans, chairman and CEO of the American Medical Rehabilitation Providers Association. "This could lead to better care and better outcomes for our patients."

Theresa M. Forster, vice president for hospice policy and programs at the National Association for Home Care & Hospice, also praised the agency for proposing to start the new quality measurements next April.

"Fortunately," she said in an email, "hospices have some time to get ready."

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