CHA News Article

MedPAC Adopts Recommendations for 2015 Payment Updates

The Medicare Payment Advisory Commission (MedPAC) yesterday approved final recommendations for Medicare payment updates for 2015. The recommendations will be closely watched by Congress as it looks for savings to fund a long-term repeal of the Medicare sustainable growth rate for physician payments. A complete list of specific MedPAC recommendations follows.

MedPAC’s recommendations include:

  • Hospital inpatient and outpatient payments: MedPAC adopted its draft December recommendation and recommends a 3.25 percent increase for hospital inpatient and outpatient prospective payment systems in 2015, noting that its recommendation is 5.25 percent if the sequester continues in 2015.

    However, MedPAC also recommends Congress reduce or eliminate payment differences between hospital outpatient departments and physician offices for 66 selected procedures and pay long-term care hospitals (LTCHs) the same rates as general acute care hospitals for cases involving patients who are not deemed “chronically critically ill” (CCI) — defined as an intensive care unit stay of at least eight days. Savings realized by cutting LTCH payments would be redistributed to create a new outlier pool for CCI cases treated in inpatient PPS hospitals. In a change from the draft recommendation in December, the LTCH policy would be phased in over three years.

    Together, these recommendations would result in a 0.5 percent payment reduction in 2015, compared to the 1.3 percent reduction for next year called for under current law. When fully phased in, the reforms would be expected to increase payments to hospitals by 0.3 percent.

    The estimates of the cuts do not take into consideration additional reductions from the 2 percent sequester that is currently in effect until 2023.
  • Long-term care hospitals: MedPAC finalized its recommendation to eliminate the payment update for LTCHs in 2015, noting that the reforms made to the LTCH PPS in the recently passed legislation would not take effect until 2016.
  • Skilled-nursing facilities: MedPAC finalized its recommendation to eliminate the payment update for SNFs in 2015.
  • Inpatient rehabilitation facilities: MedPAC finalized its recommendation to eliminate the payment update for IRFs in 2015.
  • Ambulatory surgery center payments: MedPAC finalized its recommendation to eliminate the payment update for ASCs in 2015.
  • Home health: In December, the commission restated previous recommendations from 2011 and 2012 in reforming the payment system and recommended that Congress direct the Secretary to reduce payments for those with higher readmission rates than the benchmark rate that would be known in advance. The previous recommendations included reducing payments through a full “rebasing” of reimbursement. This month the commission adopted its recommendation to eliminate the update for FFY 2015.
  • Hospice: The commission adopted its recommendation to eliminate the update for FFY 2015. 
  • Post-acute care reform: MedPAC adopted its draft recommendations for a common patient assessment tool for home health, skilled nursing, inpatient rehabilitation and LTCHs by 2016. Notably, MedPAC pointed to the CARE tool as a viable option that could be phased in over time. CHA has previously expressed its concerns to MedPAC regarding the viability of such a tool, which has been augmented for use in the bundling pilots being administered by the Centers for Medicare and Medicaid Innovation. MedPAC also finalized its recommendation that the hospice benefit be included in Medicare Advantage offerings.

The presentations made by MedPAC staff at the January meeting, along with the meeting transcript, will be available on the MedPAC website at www.medpac.gov.

 

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