MedPAC Tackles Unified Payment System for Post-Acute Care

The Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014 requires the Medicare Payment Advisory Commission (MedPAC) to develop a prototype prospective payment system (PPS) spanning the post-acute care (PAC) settings, using the uniform assessment data gathered previously during the Centers for Medicare & Medicaid Services (CMS) Post-Acute Care Payment Reform Demonstration (PAC-PRD) (completed in 2011). The Act requires the Commission to submit a report by June 30, 2016, presenting an approach for a unified, cross-setting PAC payment system and, to the extent feasible, consider the impacts of moving to such a system.

During last week’s meeting the commission discussed that a unified, patient-based PAC PPS is the first step towards broader reform and that it should not be the end point for PAC payment reform. Even with unified pricing fee for service (FFS) incentives will remain and that Medicare should move towards putting providers at risk over longer periods of time.

MedPac has designed two draft models to pay for PAC. First, routine and therapy services across four settings (HHA, SNF, IRF, and LTCH); Second, nontherapy ancillary services across three settings (SNF, IRF, and LTCH). They noted that a unified PPS will change how and where PAC services are furnished. Some further issues raised were how to approach estimating costs and payment under a PAC PPS; additional preliminary results; even with improved PPS, companion policies are needed to dampen FFS incentives; comparison of outcomes across PAC settings; and changes to regulatory requirements.

MedPAC believes that a reasonably accurate PAC PPS can be designed and that it begins with payments set to reflect current practice and revise them over time. They want to consider additional policies to improve incentives and ease transitions and also look at setting-specific regulation. In the near term they would recommend waiving certain requirements and longer term develop a common set of requirement for PAC providers.

MedPAC will meet again in December to continue their meetings on the issue in order to finalize their report by June 2016.