MedPAC Issues June Report

Mike Cheek

The Medicare Payment Advisory Commission (MedPAC) has released its June 2016 Medicare and the Health Delivery System report to Congress. Included in the report is a chapter describing a unified cross-setting post-acute care (U-PAC) payment system.

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 work by the U.S. Department of Health and Human Services (DHHS) on the development of a unified PAC, cross-setting payment system.

In follow-up to the report, the 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. MedPAC believes U-PAC could be implemented by 2025.

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

• 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 
• Need to move toward episode-based payments 

Of note to Skilled Nursing Center (SNF) providers, the Commission research indicates an 8 percent shift in payments to SNFs from other PAC provider types. It also notes the three-day stay required for SNF service eligibility is an important protection to prevent inappropriate admissions. However, the Commission notes that in 2015, it recommended that up to two observation days might be counted towards the three-day stay. We are equally concerned about the notion of a third-party benefit manager.

A summary of the session is available here.