Medicare Payment Advisory Commission’s June 2018 Report to the Congress: Medicare and the Health Care Delivery System promotes value-based payment reform and the use of post-acute care to increase savings and patient outcomes.
Authors concurred the Hospital Readmission Reduction Program (HRRP) has since 2010 played a part in reducing inappropriate readmissions.
Revisions to payment methodology and incentives have already helped Medicare cut back on spending, MedPAC explained,
While the HRRP may have contributed slightly to the secular trend of increasing observation and ED use, the small increases in costs were far outweighed by reduced readmissions costs. (The decline in readmissions across all conditions resulted in net savings to the Medicare program of roughly $2 billion per year.)
Adjusting payment methods for ED utilization in rural areas could also help Medicare provide adequate care and access for beneficiaries, MedPAC suggested.
MedPAC also contends that Medicare’s payments for ED services should be changed,
As an alternative to maintaining empty inpatient beds, the Commission recommends a new payment model that would allow Medicare to pay for emergency services at outpatient-only hospitals in isolated rural areas (more than 35 miles from another ED). Isolated rural full service hospitals that choose to convert to outpatient-only hospitals would receive the same standard prospective payment rates for ED visits as a full-service hospital. In addition, a set annual payment (common across all outpatient-only hospitals) would be made to help cover the facility’s fixed costs.
The report also pitches a unified prospective payment system (PPS) for post-acute care facilities to limit Medicare spending. Medicare uses separate prospective payment systems (PPSs) to pay for stays in each of the four PAC settings— skilled nursing facilities (SNFs), home health agencies (HHAs), inpatient rehabilitation facilities (IRFs), and long-term care hospitals (LTCHs).
The four current PPSs used for skilled nursing facilities (SNFs), home health agencies (HHAs), inpatient rehabilitation facilities (IRFs), and long-term care hospitals (LTCHs) reimburse providers at different rates. MedPAC determined that a new, unified PPS could allow for more accurate payments.
The group also asserted that ACOs have the potential to produce Medicare savings and two-sided ACOs produce more savings than one-sided ACO models. And answering critics, the group said benchmarks aren’t always the best measure of what spending would have been in the absence of the ACO – thus not a true measure of program savings. MedPAC also found that hospitals are interested in participating in ACOs because savings are produced primarily in post-acute care and not from reductions in patient care.
“There is a concern, however, that hospitals may be reluctant to reduce service volumes to meet ACO spending targets because they do not want to reduce their own FFS revenue,” the authors said. “However, the data show that ACOs with hospitals can meet spending targets.”
“A recent analysis by Avalere found that, in aggregate, MSSP ACOs would have fared better in 2016 by $966 million if they had all been in Track 1+ rather than Track 1,” MedPAC said.
Medicare spending was reported at $710 billion in 2017, The Medicare Board of Trustees estimates that the program’s Hospital Insurance Trust (HIT) will be empty by 2026 without cuts in Medicare spending.
Over 10 chapters the MedPac report considers:
- The effects of the Hospital Readmissions Reduction Program
- Using payment to ensure appropriate access to and use of hospital emergency department services
- Rebalancing Medicare’s physician fee schedule toward ambulatory evaluation and management services
- Paying for sequential stays in a unified prospective payment system for post-acute care
- Encouraging Medicare beneficiaries to use higher quality post-acute care providers
- Isues in Medicare’s medical device payment policies
- Applying the Commission’s principles for measuring quality to population-based measures and hospital quality incentives
- Recent performance of and long-term issues confronting Medicare accountable care organizations
- Managed care plans for dual-eligible beneficiaries
- Medicare coverage policy and use of low-value care
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