The head of the nation’s largest long-term and post-acute care association on Tuesday pushed back
against government recommendations that Congress slash Medicare payment rates to providers.
Mark Parkinson, president and chief executive officer of the American Health Care Association/National Center for Assisted Living, said he was dismayed to read recommendations from the Medicare Payment Advisory Commission (MedPAC) urging Congress to cut providers’ share of Medicare payments.
“It is unfortunate that MedPAC would make such radical recommendations about the skilled nursing market basket when, at the same time, the agency reports that the overall margin for the profession is a razor-thin 1.8 percent,” Parkinson tells us.
In its annual report to Congress, MedPAC went back to the well and urged lawmakers to eliminate the Medicare “market basket” update and have regulators redo the prospective payment system immediately.
MedPAC thinks the government should cut rates by 4 percent in the first year and have “subsequent reductions over an appropriate transition until Medicare’s payments are better aligned with providers’ costs.”
In the aggregate, Medicare profit margins for skilled nursing centers have remained above 10 percent since 2000, MedPAC argues. Overall, profit margins are, in fact, 1.8 percent, MedPAC acknowledges, but “Medicare payments, which are financed by taxpayer contributions … currently subsidize payments by Medicaid and private payers,” MedPAC says.
Friday’s report says that cutting the market basket is a low-risk gambit.
“The industry has shown it is nimble at responding to the level of Medicare’s payments in two ways,” MedPAC says. “First, even in years when [the government] lowers payments, providers tempered the impacts with longer stays and the assignment of days into higher payment case-mix groups.”
Overall, MedPAC claims, the current prospective payment regime has “exerted too little fiscal pressure on providers.”
“If the Congress wishes to help nursing facilities with a high Medicaid payer mix, a better targeted and separately finance program could be established to do so,” MedPAC says in its report.
To Parkinson, though, MedPAC is swinging a blunt instrument.
“We support a more targeted approach, such as MedPAC’s recommendations on safely reducing hospital readmissions and post-acute site-neutral payments for similar conditions, and we have proposals in-hand to aid policymakers,” he says. “These are the kinds of solutions we need, not debilitating cuts, to improve post-acute care while making it more effective for the Medicare program.”