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Improvements in Medicare's Handling of Post-Acute Care Proposed

By Emily Ethridge, CQ Roll Call

March 18, 2014 -- A bipartisan group of House and Senate leaders took a first step Tuesday in improving how Medicare handles post-acute care, releasing a discussion draft focused on standardized assessment data and payment policy changes.

Lawmakers of both parties have long said that the post-acute care system, including nursing homes and some hospitals, is in need of improvements. The Medicare Payment Advisory Commission (MedPAC) says the current system involves varying payment systems and rates, and high rates of fraud.

House Ways and Means Committee Chairman Dave Camp, R-Mich.; ranking Democrat Sander M. Levin of Michigan; Senate Finance Committee Chairman Ron Wyden, D-Ore.; and ranking Republican Orrin G. Hatch of Utah hope their discussion draft will serve as a building block for future improvements to the system.

They said in a statement that they will continue to work with stakeholders and lawmakers to improve the draft with an aim to introduce consensus legislation in the future.

The “resounding theme” in recommendations from more than 70 stakeholders was the need for standardized post-acute care assessment data across provider settings, according to a summary of the draft. Post-acute care providers include home health agencies, long-term care hospitals, inpatient rehabilitation facilities and skilled nursing facilities.

“The lack of comparable information across PAC settings undermines the ability of policymakers and providers to determine appropriate care settings for patients based on clinical evidence and quality metrics and differentiate between PAC providers,” the summary says.

The draft would require the collection and analyses of assessment data so Medicare can compare quality across the different settings. It also would require hospitals to report patient assessment data gathered prior to discharge, and require the use of that data by 2016 to help providers do discharge planning.

MedPAC has recommended creating a unified assessment instrument for getting information on patients, regardless of what type of facility they are in. Currently, different facilities have different ways of determining patients’ conditions, so payments and outcomes can’t be compared across settings.

Under the draft, the assessment data would be used to inform how Medicare makes post-acute care payments. Possible payment overhauls include using bundled payments, in which the reimbursement for a number of services is included into one payment. MedPAC has suggested using bundled payments so providers have an incentive to coordinate care and provide only clinically necessary services.

The Centers for Medicare and Medicaid Services is currently implementing two bundled payments models focused on changing payments for post-acute care services.

Another possible payment system change would be to move to site-neutral payments, which MedPAC has also recommended. That system would equalize payment rates for some services regardless of the setting in which they were performed. For example, experts have said many services provided in inpatient rehabilitation facilities could be provided at skilled nursing facilities at equal quality but for less cost.

The discussion draft also notes that value-based purchasing, in which payments are based on how providers score on a certain set of measures, could be used for post-acute care.

The discussion draft would require MedPAC and the Department of Health and Human Services (HHS) to send reports to Congress by 2022 using the assessment data to create payment system prototypes.

It also would direct the HHS secretary to develop regulations encouraging the use of quality data in patient discharge planning, while continuing to take into account patients’ preferences for care.

Emily Ethridge can be reached at [email protected].  

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