MedPAC Tackles Post-Acute Care Payment Reform and Medicare Advantage Encounter Data - McDermott+Consulting

MedPAC Tackles Post-Acute Care Payment Reform and Medicare Advantage Encounter Data

Summary and analysis of issues discussed during the first day of MedPAC’s September meeting, the first held under new Chairman, Francis J. Cresson, MD.

On September 10, 2015, the Medicare Payment Advisory Commission (MedPAC) held its inaugural meeting under new Chairman, Francis J. Crosson, MD. Dr. Crosson previously served as a MedPAC commissioner, but was recently elevated to chair after long-time chair Glenn Hackbarth stepped down last year. In introductory comments, Chairman Crosson remarked that the Medicare physician payment system needs adjustments and that hospital industry will be facing significant changes in the next decade. According to Dr. Crosson, MedPAC continues to be concerned about rising drug costs as well as what he described as the provision of graduate medical education funds without “concomitant accountability” from the entities receiving these funds.

In their March 2015 Report to Congress, MedPAC recommended that Congress should direct the Secretary of Health and Human Services to eliminate the differences in payment rates between inpatient rehabilitation facilities (IRFs) and skilled nursing facilities (SNFs) for selected conditions. During this meeting, MedPAC’s discussion cut across all post-acute care (PAC) sites. MedPAC is mandated to submit a report to Congress by June 30, 2016, on a unified payment system for post-acute care based on patient characteristics rather than site of service that would replace the current multiple payment systems. Staff presented results from a model they believe explains a high share of the variation in costs across stays. Based on these results, MedPAC staff concluded that it is possible to develop a unified payment system for PAC services, including SNFs, home health agencies, IRFs and long term care hospitals. A unified PAC payment system will continue to be a focus for MedPAC as it prepares its June 2016 report on this subject to Congress.

For the first time MedPAC conducted an analysis of Medicare Advantage (MA) encounter data that the Centers for Medicare and Medicaid Services (CMS) started collecting in 2012. Their preliminary analysis was presented at this meeting. Not surprisingly, the data indicated higher per capita utilization in traditional Medicare versus MA overall as well as for the two localities analyzed (Portland, OR and Miami-Dade, FL). MedPAC staff noted certain flaws in the data, such as s missing encounters, and the lack of an adjustment for differences between MA and fee-for-service. Despite these limitations, commissioners were keen on the availability of the data and they had a robust discussion on how they could use this data for future analysis. There was some debate among commissioners about the appropriateness of using this data for risk adjustment until this data is better understood. MedPAC expects to receive 2013 and 2014 encounter data and payment data (which MedPAC staff warns may have even more limitations than the encounter data) in the next six months. For future meetings, MedPAC staff plans to refine the current analysis and analyze other parts of the encounter dataset.

The agenda and presentation slides are available on the MedPAC website. The meeting will conclude on Friday, September 11, 2015.