MedPAC Approves Conceptual Model for a Unified PAC Payment System

Mike Cheek

On Thursday, April 7, the Medicare Payment Advisory Commission (MedPAC) unanimously approved a conceptual model for a unified cross-setting post-acute care (U-PAC) payment system. The prototype U-PAC proposal will be submitted to Congress in June.

The MedPAC report is the first of three PAC payment reform reports statutorily mandated by the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014. The initial MedPAC report is intended to lay the foundation for more detailed DHHS work on the development of a unified PAC, cross-setting payment system.

In follow up to the report, the U.S. Department of Health and Human Services (DHHS) is required respond to the June 2016 MedPAC document by 2020. A final proposal for a U-PAC payment system is due to Congress no later than 2023.

Of note, the June 2016 report is not binding in any way. Congress and DHHS may or may not adopt or act upon, respectively, the contents of the report. Considerable further research and policy development is needed before delivery of a final U-PAC proposal.

Highlights
In their comments to the Commissioners, MedPAC staff laid out the topics of the report:

• Feasibility of a PAC PPS; 
• Impacts on payments; 
• Implementation issues; 
• Possible changes to regulatory requirements; 
• Companion policies to implement with PAC PPS; 
• Importance of monitoring provider responses; and 
• Need to move toward episode-based payments. 

As during the March 3rd discussion, Commissioners lauded the report and reiterated the need to include a recommendation to accelerate development and implementation of a U-PAC system. A summary of the session is available here and a copy of the MedPAC slides are available here.