MedPAC issues March report to Congress: 8 takeaways

The Medicare Payment Advisory Commission has released its March 2017 report on Medicare payment policy to Congress, which includes recommendations to slash payment rates for home health agencies and inpatient rehabilitation facilities.

Here are eight takeaways from MedPAC's March report.

1. MedPAC recommends Congress cut payment rates for home health agencies by 5 percent in 2018. "An immediate reduction of 5 percent in 2018 would represent a significant action to address the magnitude of the overpayments embedded in Medicare's rates," according to MedPAC.

2. The commission recommends Congress reduce payment rates for inpatient rehabilitation hospitals by 5 percent in 2018. MedPAC said the cumulative increase in payments per case for all inpatient rehabilitation facilities was 14.2 percent between 2009 and 2015, while costs per case rose 8.3 percent. "Reducing the payment rate for IRFs by 5 percent would better align Medicare payments with the costs of IRF care," said MedPAC.

3. MedPAC recommends Congress eliminate the update to payment rates for ambulatory surgery centers for 2018, meaning the base payment rate would remain the same as in 2017. 

4. MedPAC also called for Congress to require ASCs to submit cost data. "Cost data would enable the commission to examine the growth of ASCs' costs over time and evaluate Medicare payments relative to the costs of an efficient provider, which would help inform decisions about the ASC payment update," according to MedPAC.

5. MedPAC reiterated site-neutral payment recommendations it made in years past. The commission said Congress should direct HHS to reduce payment rates for evaluation and management office visits so that total payment rates for these visits are the same whether the service is provided in a physician office or an outpatient department.

6. MedPAC said that as hospitals employ more physicians, evaluation and management office visits will increasingly be billed as outpatient department visits instead of less costly physician office visits. Based on 2015 claims data, equalizing reimbursement rates for evaluation and management services would reduce Medicare payments to hospitals by $1.6 billion.

7. If expanded beyond evaluation and management services to certain other ambulatory payment classifications, equalizing reimbursement rates would lead to further reductions in Medicare program payments to hospitals, according to MedPAC.

8. The commission recommends Congress update the inpatient and outpatient facilities payments by the amount specified in current law. In December, the hospital update for fiscal year 2018 was projected to be 1.85 percent.

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