MedPAC Issues 2015 Report to Congress

Category: Medicare, Medicare Advantage

MedPAC Issues 2015 Report to Congress


Last week, MedPAC – the Medicare Payment Advisory Commission – issued its annual report to Congress on the Medicare fee-for-service (FFS) payment systems, the Medicare Advantage program, and the Medicare prescription drug program (Part D). In announcing the 433-page report, MedPAC highlighted its focus on finding ways to “provide high-quality care for Medicare beneficiaries at lower costs to the program” through “payment adequacy analyses.” Here are a few of the points from the report that caught our attention:

  • FFS Systems: MedPAC recommended no 2016 update for five FFS systems:
    • Ambulatory surgery centers
    • Outpatient dialysis
    • Long-term care hospitals
    • Inpatient rehabilitation facilities
    • Hospice
  • Skilled Nursing and Home Health:
    • For skilled nursing facilities (SNFs) and home health agencies (HHAs), MedPAC once again recommended a wide range of reforms, including lowering the base rate, establishing new quality incentives, increasing program integrity and “more equitably distributing payments among providers to ensure access for all beneficiaries.”
    • With respect to payment rebasing for SNFs, MedPAC recommends “an initial reduction of 4 percent and subsequent reductions over an appropriate transition until Medicare’s payments are better aligned with providers’ costs.”
    • For HHAs, MedPAC recommends the reduction of payments agencies with “relatively high risk-adjusted rates of hospital readmission” and the establishment of a per-episode co-pay for “home health episodes that are not preceded by hospitalization or post-acute care use.”
  • Ambulatory Services: MedPAC called for reduction or elimination of differences in payment rates between outpatient departments and physician offices for selected ambulatory services.
  • Long-term Care Hospitals: One area that has received a fair amount of attention is the call for long-term care hospital (LTCH) base payment rates for non–chronically critically ill (CCI) cases to be set on an equal playing field to those of acute care hospitals. The change would be phased in over a three-year period from 2016 to 2018.
  • Sustainable Growth Rate: MedPAC recommends repealing the sustainable growth rate (SGR) system and replacing it with a 10-year path of statutory fee-schedule updates that would include a payment rate update that is higher for primary care services than for specialty services in order to reduce the disparity between payments to PCPs and specialists.
  • Shared Savings: MedPAC also recommends increasing shared savings opportunities for “physicians and health professionals who join or lead two-sided risk accountable care organizations (ACOs).”

It’s important to note that none of these changes will occur overnight and will take some real discussion.  MedPAC's recommendations are not binding, but Congress and CMS often take into account MedPAC's report when updating Medicare payment policies.

Top of Page