In its
March 2018 Report to the Congress: Medicare Payment Policy, the Medicare Payment
Advisory Commission (MedPAC) stuck to its previous policy mantra in urging
Congress to make changes to the way skilled nursing facilities (SNFs) are
reimbursed as early as next year under a revamped prospective payment system.
The report
to lawmakers, which is one of two formal sets of proposals the commission
produces annually (the other in June), included not only recommendations for
SNF payment, but MedPAC’s broader analyses of payment adequacy in
fee-for-service (FFS) Medicare and reviews of the status of Medicare Advantage
(MA) and the prescription drug benefit, Part D.
“MedPAC
also proposes changing the way Medicare pays for clinician services in FFS by
moving beyond the Merit-based Incentive Payment System, recommends changes to
MA and Part D to improve the equity and efficiency of those programs, and responds
to a congressional mandate on telehealth in Medicare,” the commission said.
For long
term and post-acute care providers, the highlights of the report, which
Congress is not obligated to act on, include the commission recommending that
for fiscal year 2019 (FY19) Congress should “eliminate the market basket update
for SNFs for fiscal years 2019 and 2020 and direct the secretary [of Health and
Human Services] to implement a redesigned prospective payment system (PPS) in fiscal
year 2019 for SNFs.” The commission also said Congress should “direct the secretary
to report to the Congress on the impacts of the revised PPS and make any
additional adjustments to payments needed to more closely align payments with
costs in fiscal year 2021.”
These
policies did not stray from MedPAC’s work in recent months to refine its
well-established beliefs on the need to change the current reimbursement model
for SNFs.
On SNF
Medicare margins, MedPAC said that in 2016, the average for freestanding SNFs
was 11.4 percent, but noted that the projected FY18 margin is 9 percent. The
expected decline is the result of the market basket update being offset by the
productivity adjustment in 2017, the Medicare Access and CHIP Reauthorization
Act (MACRA)-mandated update in 2018, and the program savings from value-based
purchasing.
MedPAC
also issued data on Medicaid use, spending, and non-Medicare (private-payer and
Medicaid) margins. According to the commission, the number of Medicaid-certified
facilities has declined slightly since 2015, less than 0.5 percent, but remains
close to 15,000. Total FFS spending on SNF services dropped 3.2 percent between
2015 and 2016, and a smaller decline (minus 1.6 percent) is predicted between
2016 and 2017, according to data from the Centers for Medicare & Medicaid
Services (CMS) in MedPAC’s report.
In 2016,
MedPAC said the average total SNF margin was 0.7 percent, less than 1 percent.
This figure includes all payers (managed care, Medicaid, Medicare, and private insurers)
and all lines of business (hospice, ancillary services, home health care, and
investment income). The 2016 margin is down from 1.6 percent in 2015.
The
average non-Medicare margin (which includes all payers and all lines of
business except Medicare FFS SNF services) was minus 2.3 percent, also lower
than the minus 2.1 percent seen for 2015.
Moving
to other issues, MedPAC said it remains supportive of the Resident Classification System Version 1
(RCS-1) and urged quick implementation. “The [RCS] design is consistent
with the design recommended by the commission in 2008, and the estimated
impacts would be similar,” the report said.
The
design, MedPAC said, would redistribute payments from rehabilitation patients
(especially those assigned to the highest rehabilitation case-mix groups) to
medical patients, patients with high NTA (non-therapy ancillary) costs, and
patients requiring extensive services or wound care. “Reflecting the mix of
patients, payments would shift from freestanding to hospital-based providers
and from for-profit to nonprofit providers.”
On
admissions data, MedPAC said between 2015 and 2016, SNF admissions per FFS
beneficiary declined 3.6 percent. In calculating these numbers, MedPAC only
examines FFS beneficiaries because CMS data on users, days, and admissions do
not include service use by those in MA plans.
Covered
days per 1,000 FFS beneficiaries declined even more (minus 6.5 percent). And,
the report said the combination of decreased SNF admissions and even sharper
declines in days resulted in shorter stays on average (25.7 days in 2016).
MedPAC said
the admissions and lengths of stay trends reflect a growing presence of
alternative payment models like accountable care organizations and bundled
payments. “There is some evidence that providers participating in alternative
payment models refer fewer patients to PAC [post-acute care, including SNF] and
that their SNF use includes shorter and less therapy-intensive stays.”
For the
full report, visit www.medpac.gov.