MedPAC Unpacks Suggestions for Major Changes for Medicare Payments

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The government-appointed, independent advisory commission MedPAC has released a plan for changing how Medicare pays for post-acute care, including changes to the Part D prescription drug program. It says the Part D changes could save as much as $10 billion over five years.

The Medicare Payment Advisory Commission (MedPAC), an independent commission of 17 members appointed to three-year terms by the Comptroller General of the United States, advises Congress on issues affecting Medicare program administration.

MedPAC Outlines Reimbursement Changes for SNFs, HHAs, Inpatient Rehabs, and LTCHs

MedPAC’s March 2016 report suggests changes to how Medicare reimburses skilled nursing facilities, home health agencies, inpatient rehabilitation facilities, and long-term care hospitals, establishing rates based on patient conditions instead of on the type of care setting. Congress had asked MedPAC to develop a way to pay these providers under one prospective payment system. The Department of Health and Human Services has until 2022 to develop an actual payment prototype based upon the MedPAC recommendations.

MedPAC Suggests Major Part D Changes

Currently Medicare Part D, the Medicare drug plan, must cover almost all drugs in six therapeutic classes, called protected classes: antiretrovirals; antirejection immunosuppressant drugs for transplant patients; antidepressants; antipsychotics; anticonvulsants; and antineoplastics. However, the March MedPAC report recommends removing antidepressants and antirejection immunosuppressants from the protected list. The commission projects financial savings while maintaining patient access because patients would have access to generic drugs in these classes.

However, many providers and patient rights advocates argued against the proposed Part D changes. CMS has tried to use rule-making to effect similar changes to Part D in in the past four years, only to see its efforts scuttled by Congress and stakeholders.

Home Healthcare Faces Deep Cuts Under MedPAC Plan

MedPAC’s suggested changes to home health agency reimbursement include the following:

  • a rate freeze with 0 percent payment update (increase) for 2017
  • two years of rebasing cuts starting in 2018
  • eliminating therapy as a prospective payment system (PPS) factor in 2018, with rebasing occurring at the same time.

Congress could pass MedPAC’s suggested changes to home health agency reimbursement as early as this year.

What About You?

If you work in home care, we’re interested in your reaction to these changes proposed by MedPAC. Let us know what you think in the comment box below.

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Susan taught health information and healthcare documentation at the community college level for more than 20 years. She has a special love for medical language and terminology. She is passionate about ensuring accurate patient healthcare documentation through education. She has a master's degree in healthcare administration, is a certified healthcare documentation specialist, and serves as immediate past president for the Association for Healthcare Documentation Integrity (AHDI).

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