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MedPAC Objects to Centers for Medicare and Medicaid Services Plan to Compare Post-Hospital Care Sites

By Kerry Young, CQ Roll Call

June 1, 2016 -- An influential advisory panel says a Medicare proposal will make it more difficult to compare different settings for post-hospital care. This could hinder efforts to overhaul payments and incentives for services that help elderly and disabled people recover after hospital stays for strokes, surgeries, and serious illnesses, the advisers say.

The Medicare Payment Advisory Commission (MedPAC) this week made public its concerns about proposals in draft fiscal 2017 payment rules. These Centers for Medicare and Medicaid Services (CMS) proposals are part of a broader effort to set the groundwork for a unified payment for so-called post-acute care, a roughly $59 billion annual expense for Medicare. Different reimbursement rules and rates cover similar care provided by four groups: skilled nursing centers, inpatient rehabilitation facilities, home health agencies and long-term care hospitals. The fragmentation can be needlessly costly for Medicare, while leaving people without information needed to choose the right care settings, analysts have said.

The IMPACT Act of 2014 (PL 113-185) directed CMS and MedPAC to shape a robust set of data that would allow comparisons among the different settings. Through the draft fiscal 2017 payment rules, CMS proposed separate Medicare spending per beneficiary measures for each of the different post-acute settings as part of this work. MedPAC disagrees with this approach.

"We believe a uniformly defined resource use measure for all four PAC settings, rather than separate measures for each PAC setting, will better meet the intent of the IMPACT Act and enable comparisons," wrote Francis J. Crosson, the chairman of MedPAC, in a comment to CMS on its proposed payment rule for inpatient rehabilitation facilities.

Crosson made a similar observation in the MedPAC comment on the proposed rule for payment for skilled nursing facilities. CMS is accepting comments through June 20 on both rules. The agency likely will respond to MedPAC's concerns when it issues the final versions of these rules, which are slated to be released in late July or early August.

The suggestions from MedPAC and the expected responses from CMS highlight some of the technical challenges ahead in carrying out the IMPACT Act. There may be intense lobbying by industry groups and companies, which will seek to influence how CMS carries out the mandates of the IMPACT Act. Congress seems intent on having the agency create a unified payment. 

The IMPACT Act had a level of bipartisan support rarely seen in recent years, given that Democrats and Republicans are bitterly divided on the 2010 health overhaul. It breezed through the House in Sept.16, 2014, on a voice voice and was cleared by the Senate by unanimous consent two days later. Ways and Means Chairman Kevin Brady, R-Texas, was as one of its chief backers.

The giants in the field of post-acute care are closely monitoring the implementation of the law. "CMS is struggling to meet the deadlines for specific performance under the enactment," Genesis Healthcare Inc., which operates about 475 skilled nursing centers, said in a March regulatory filing. 

The stakes are high for Genesis and rival providers of post-acute care as CMS sets the groundwork for a new payment system. "Depending on the final details, the costs of implementation could be significant," Kennett Square, Pennsylvania-based Genesis said.  "The failure to meet implementation requirements could expose providers to fines and payment reductions." 

The cumbersome work in preparing to overhaul of post-acute care is meant to pay off for the people who need these services, according to the MedPAC letters on fiscal 2017 skilled nursing and inpatient rehabilitation payments. Owners and operators of post-acute care organizations will have more incentive to consider what will happen to the often frail people that they treat and then release to return to their homes.

In both MedPAC letters, for example, Crosson expressed support for CMS' plan to track Medicare spending during the time post-acute care is delivered and then for 30 days afterward. This "will ready providers for broader payment reforms," such as bundled payments," Crosson wrote.

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