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MedPAC Considers a Move Toward Equalizing Post-Acute Care Payments

By Rebecca Adams, CQ HealthBeat Associate Editor

November 7, 2013 -- The Medicare Payment Advisory Commission (MedPAC) has started to explore whether it will eventually recommend that Medicare remove some of the disparities between what it pays skilled nursing facilities and inpatient rehabilitation facilities to treat patients recovering from serious medical problems.

The push is part of a broader discussion about whether Medicare should pay more for care in some types of facilities than it does in others, if the patients have similar conditions and have similar health outcomes.

The MedPAC staff and several commissioners referred to the debate as a "stepping stone toward broader reform." MedPAC Chairman Glenn Hackbarth called it "a starting point" and noted that among the commissioners there is "near unanimous affirmation of the direction" that the panel is considering.

MedPAC analysts said that IRFs are paid 10 percent to 90 percent more than skilled nursing facilities, even though the institutions offer similar services, treat some of the same conditions and see similar results in improvements in patients' health.

The commission plans to study three medical conditions treated in the two settings: major joint replacements, hip fractures and strokes. The panel will develop a common metric to compare the prices between the two facilities, using a per-discharge metric like inpatient rehab facilities do rather than a per-day payment system like skilled nursing facilities.

MedPAC Executive Director Mark Miller said he hopes to have some results by the March and April MedPAC meetings that could form the basis of a deeper analysis by the commissioners. In explaining the goal of the commission in the spring, Miller said, "I wouldn't say a recommendation necessarily. That will really depend on what we find. The research has to settle out to have a pretty clear idea of where we're going."

In future years, Miller said the work may evolve so that Medicare payment rates "become much more agnostic about setting." But he said, "That's a long run out."

Most commissioners agreed with the idea of moving toward more uniform payments, regardless of whether patients are in a skilled nursing facility or an IRF. But a few expressed some reservations.

Bill Hall of the University of Rochester School of Medicine said he endorsed the concept but wanted to interject a word of caution because, he said, the facilities do provide different types of services to patients with different ability levels. At an IRF, patients are supposed to undergo more than three hours of therapy per day, something that is not required of patients at nursing facilities.

He said that a rehab facility looks more like a hospital, with sophisticated equipment and specialists buzzing around, while a typical skilled nursing facility looks more like a nursing home with accoutrements.

"We almost never send an older Medicare patient to an IRF," he said, because the frailer patients wouldn't be able to do the hours of therapy that are involved. The vast majority of stroke patients go directly to skilled nursing facilities, he said.

He suggested that "we should entertain some consultation" from rehab therapy groups.

"The last thing I'd like to see is to disenfranchise Medicare patients from getting IRF services in the rare cases that they get them," he said.

The discussion may evolve in future years into a recommendation for a combined prospective payment system for at least some of the post-acute care facilities.

Commissioner Mary Naylor of the University of Pennsylvania School of Nursing said, "I saw this as part of the path toward rationalization."

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