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 MedPAC Considers Steps to Drive Medicare Beneficiaries to Quality PAC

​In a report before a public meeting of the Medicare Payment Advisory Commission (MedPAC), staff told commissioners that in encouraging Medicare beneficiaries to seek out higher-quality post-acute care (PAC), hospital discharge planners should be equipped with the tools and authority to recommend providers, something they currently lack.
The staff report, “Encouraging Medicare Beneficiaries to use Higher-quality Post-acute Care Providers,” said while hospital discharge planners may not recommend specific providers, the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) does mandate the use of quality as a factor in discharge planning. However, staff noted, the Centers for Medicare & Medicaid Services (CMS) has not finalized a regulation implementing this requirement.
As a backdrop for the issue, the report said the main reasons for a possible MedPAC recommendation on taking a new approach on PACs and discharge planning are the high costs associated with beneficiaries moving to higher-quality PAC. And this is exacerbated by the wide differences in care provided by skilled nursing facilities (SNFs), and to a lesser extent, home health agencies (HHAs).
For instance, the report said, the SNF rate of hospitalization ranged from 12.8 percent for the SNF at the 25th percentile (referring to the higher-quality provider in the top quarter of a range) to 19.5 percent at the 75th percentile (lower end of the quality scale).
For HHAs, the rate for this sector ranged from 17.5 percent to 30.1 percent, measured at the same 25th and 75th percentile, respectively.
“Beneficiaries served by lower-quality providers may experience more hospitalizations and worse outcomes,” staff said. “Hospitals whose patients are readmitted or experiencing other bad outcomes may see payment reductions. And, Medicare gets less value and incurs higher program costs.”
On what prompts beneficiaries’ choice of a PAC provider, the report said Medicare’s publicly available quality measures do not significantly increase use of higher-quality PAC providers. Most often, patients solicit views on quality from trusted intermediaries such as family, physicians, or associations that have used PAC.
Further, beneficiaries list distance from home and provider reputation as important in selecting PAC.
Staff said 2014 research shows that 84.3 percent of beneficiaries have at least one higher-quality SNF nearby, and 46.8 percent had five or more in more urban areas offering a wider selection. “Higher-quality providers had meaningful differences compared to selected provider. For example, the better SNFs had a rehospitalization rate that was about 3 percentage points lower than a [lower-quality] selected provider,” the report said.
In presenting the discharge planning issue to the commission, the report said there are three possible ways in which MedPAC could choose to act, if at all, in recommending a policy shift.
First is the so-called flexible option. This would allow hospitals to define their own quality measures and performance levels for the facilities and produce a list of high-quality providers to be shared with patients. Under this idea, acute-care hospitals would be required to collect and review performance data on PAC providers, adhering to a formal record of the process.
The second option would be the prescriptive one. Here, hospitals would have to utilize Medicare-defined quality measures and performance levels. CMS would inform hospitals and beneficiaries of qualifying PAC providers.
The third choice is revised prescriptive. This path would see Medicare account for variations in PAC quality across market segments, and possibly include detailed data on how a provider ranks in a specific geographical location.
In considering the three options, some commissioners balked at the prescriptive approach, questioning how staff could be so sure the quality measurement information is reliable.
Looking at the pro’s and cons of the prescriptive choice, the staff report said another problem was the uneven availability of high-quality providers across the country. But, they also said one of the positives of the prescriptive approach was the establishment of a single standard that applies to all areas and providers uniformly.
Other commissioners liked the uniform standard in the prescriptive approach, pointing to that as a reason not to use the flexible process, which could create more problems than it solves.
MedPAC did not seek action on the proposal, but may include the topic among many in its annual report to Congress in June, staff said.
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