CHA News Article

MedPAC Releases Draft Recommendations for 2019 Payment Updates

The Medicare Payment Advisory Commission (MedPAC) has released draft recommendations on Medicare fee-for-service payment and policy changes, as required by law. These recommendations, directed at Congress and the Department of Health and Human Services Secretary, are for calendar and federal fiscal year 2019. MedPAC will meet in January to vote on its recommendations. Final recommendations will be published in its March 2018 report to Congress.

MedPAC’s specific draft recommendations include:

  • Hospital inpatient and outpatient payments: MedPAC states that for acute care hospitals, overall Medicare margins in 2016 were negative 9.6 percent. MedPAC projects that margin to decrease further, to negative 11 percent, in 2018. Notably, even the “efficient providers” that MedPAC tracks had a negative 1 percent Medicare margin. MedPAC recommends that Congress retain the inpatient and outpatient update amounts specified in current law. MedPAC estimates that update will be approximately 1.25 percent for FFY 2019.
  • Post-acute care: In an effort to speed adoption of a unified post-acute care payment system, MedPAC directs the Health and Human Services Secretary to begin to base Medicare payments to skilled-nursing facilities, inpatient rehabilitation facilities, long-term acute care hospitals and home health agencies on a blend of the current setting-specific relative weights for each payment system and a new unified post-acute care prospective payment system beginning in 2019. MedPAC has previously recommended that Congress adopt a unified post-acute care prospective payment system by no later than 2021.
  • Skilled-nursing facilities: Prior to the application of the blended weights, MedPAC recommends that the Secretary refine the current skilled-nursing facility prospective payment system and recommend elimination of the payment update for skilled-nursing facilities for federal fiscal years 2019 and 2020.
  • Inpatient rehabilitation facilities: As it did last year, MedPAC recommends a 5 percent reduction of the payment update for inpatient rehabilitation facilities for federal fiscal year 2019. In addition, MedPAC is poised to reprint its previous recommendation that directs the Secretary to conduct focused medical record reviews of inpatient rehabilitation facilities that have unusual patterns of case-mix and coding and to expand the outlier pool to redistribute payments more equitably across providers.
  • Home health agencies: MedPAC restates previous recommendations on the need to reform the home health prospective payment system. It recommended that Congress direct the Secretary to reduce payments by 5 percent in 2019, implement a two-year rebasing beginning in 2020 and eliminate the use of therapy visits as a factor in payment determination, concurrent with rebasing.
  • Long-term care hospitals: MedPAC recommends no payment update for long-term care hospitals in federal fiscal year 2019.

The presentations made by MedPAC staff at the December meeting, along with the meeting transcript, are available on the MedPAC website. CHA will continue to monitor the process and will keep members informed through CHA News.