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 MedPAC Offers Blended System to Speed Unified PAC Reimbursement

​An interim blended payment model MedPAC is considering could bring changes to post-acute care rates as early as 2019.

At its public meeting on Nov. 2, the Medicare Payment Advisory Commission (MedPAC) weighed whether an interim “blended” payment model should be added to the advisory body’s existing recommendation for full implementation of a unified post-acute care (PAC) payment system in 2021. If added, this blended idea could bring changes to PAC payments in 2019.

Though no vote was taken on the matter, the continued process by which MedPAC examines PAC reimbursement will factor into a recommendation to Congress set for publication in either March or June of next year, MedPAC watchers tell Provider.

Earlier this year, MedPAC recommended to Congress that a new PAC prospective payment system (PPS) be in place starting in the year 2021, with a three-year transition period. The commission also supported measures to lower the aggregate level of PAC payments by 5 percent, begin to align regulatory requirements, and revise and rebase PAC payments to keep reimbursement aligned with cost on an as-needed basis.

A unified payment model’s goal is to have Medicare program payments to PAC providers—skilled nursing facilities (SNFs), home health agencies (HHAs), inpatient rehabilitation facilities (IRFs), and long term care hospitals (LTCHs)—based on patient characteristics not the setting of service. The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT) requires the commission to develop a PPS spanning the four PAC settings.

Erica Breese, senior manager, Avalere Health, says the latest MedPAC discussion was mainly about the idea of blending elements of a unified payment system by the year 2019, which could hasten a full transition to the new system by 2021. “The commissioners were all very supportive of this because they have wanted for a long time to see reform in PAC payment,” she says.

Commissioners discussed using a blend of setting-specific weights in combination with unified PAC weights in 2019 and 2020, before moving fully to a unified PAC PPS two years later. While MedPAC already approved a recommendation to move to a unified PAC PPS in 2021, the latest discussion focused specifically on potential interim blended payment changes that could be used to correct the current “biases” in the PAC PPS and help providers prepare for the transition to the unified PAC.

MedPAC staffers also highlighted the key differences between the potential blended payment changes for 2019-2020 and the fully uniform PAC payment system, including the fact that the blended payment system would only redistribute payments within the four settings based on patient conditions (HHAs, SNFs, IRFs, LTCHs), while the unified PAC will redistribute payments across all four of these settings.

The results of this interim transitional policy, according to MedPAC staff, would increase payments for nonprofit and hospital-based providers, while payments would decline for for-profit and freestanding providers.

Even though MedPAC favors a quickened pace to new payment structures, Breese says that there are issues on how this can be achieved, and even if there is support for doing so in Congress or within the Centers for Medicare & Medicaid Services (CMS).

“There is a very tight issue on timeliness,” she says, pointing to the fact the CMS payment rule will be coming out in April for 2019. “A lot needs to happen, and the industry does not support this transition. The industry’s concern is that you have very sick patients and reimbursement may not be enough to cover care costs.”

There is also a major concern among providers on how to decipher regulatory differences between care settings.
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