MedPAC Offers Recommendations on FY 2020 Rates, More

Last week the Medicare Payment Advisory Commission released its annual report to Congress.  Included in this report are MedPAC’s Medicare rate recommendations for the coming year.  They are:

  • hospital inpatient rates – a two percent increase
  • hospital outpatient rates – a two percent increase
  • physician and other health professional services rates – no update
  • skilled nursing facilities – no 2020 increase
  • home health agencies – a five percent rate reduction
  • inpatient rehabilitation facilities – a five percent rate reduction
  • long-term-care hospital services – a two percent increase
  • hospice services – a two percent rate reduction

MedPAC also recommended that the Centers for Medicare & Medicaid Services replace its current array of hospital quality programs with a new, streamlined “hospital value incentive program,” or HVIP, that would replace the Hospital Inpatient Quality Program, the Hospital Readmissions Reduction Program, the Hospital-Acquired Condition Reduction Program, and the Hospital Value-Based Purchasing Program.

MedPAC’s recommendations are binding on neither the administration nor Congress but its views are highly respected and often find their way into new laws, new policies, and new programs.

Learn more about MedPAC’s annual recommendations to Congress in the full MedPAC report or the MedPAC fact sheet that accompanies the recommendations’ release.

MedPAC Issues 2018 Report to Congress

The non-partisan legislative branch agency that advises Congress and the administration on Medicare payment policies has submitted its mandatory annual report to Congress.

Among the findings included in the report by the Medicare Payment Advisory Commission are:

  • Medicare’s hospital readmissions reduction program has not resulted in increases in emergency room visits or hospital observation stays.
  • Many Medicare accountable care organizations, while maintaining or improving quality, are producing more modest savings than predicted.
  • MedPAC approves of Medicare’s proposals to redesign the case-mix classification system for skilled nursing facilities.
  • MedPAC supports changes Medicare has proposed for patient assessment and therapy requirements for skilled nursing facilities.

MedPAC’s recommendations include:

  • Authorizing outpatient-only hospitals in isolated rural communities to ensure access to emergency care.
  • Reducing payments to off-campus emergency departments in certain urban areas.
  • Rebalancing Medicare’s physician fee schedule to increase payments for ambulatory evaluation and management services while reducing payments for procedures, imaging, and tests.
  • Paying for sequential stays in a unified prospective payment system for post-acute care.
  • Establishing new ways to help patients, families, and hospitals identify higher-quality post-acute care providers for their patients.
  • Establishing new principles for measuring quality that address both population-based measures and quality incentives.
  • Encouraging the development of managed care plans that better meet the needs of the dually eligible (Medicare and Medicaid) population.
  • Eliminating Medicare payment increases for skilled nursing facilities in FY 2019 and FY 2020 because of the healthy financial condition of those facilities.
  • Urging Medicare to use a uniform set of population-based measures for different health care settings and different populations.
  • Moving forward with a unified post-acute-care payment system as quickly as possible.

Learn more about MedPAC’s thinking, research, conclusions, and recommendations by consulting the following materials:   the news release that accompanied MedPAC’s transmission of its report to Congress; a fact sheet that accompanied the report’s release; and the 407-page report itself.

ACOs Moving Into Medicaid

Accountable care organizations, one of the centerpieces of recent Medicare efforts to test new ways to deliver care more effectively and at less cost, are finding their way into state Medicaid programs as well.

Today, a dozen states employ Medicaid ACOs and another ten are planning to do so.

Learn more about Medicaid ACOs, and how one state (Minnesota), in particular, is using them, in this Kaiser Health News report.

MedPAC Meets

The Medicare Payment Advisory Commission met last week in Washington, D.C. to address a number of Medicare reimbursement-related issues.

Among the subjects on MedPAC’s agenda were:

  • using payments to ensure appropriate access to and use of hospital emergency department services
  • uniform outcome measures for post-acute care
  • applying MedPAC’s principles for measuring quality: hospital quality incentives
  • Medicare coverage policy and use of low-value care
  • long-term issues confronting Medicare accountable care organizations
  • managed care plans for dual-eligible beneficiaries

While MedPAC’s policy and payment recommendations are not binding on Congress or the administration, its views are respected and influential and often become the basis for new public policy.

Go here to see the policy briefs and presentations offered to help guide MedPAC commissioners’ discussions about these and other issues.

ACOs, APMs Proliferate

The number of accountable care organizations and alternative payment models is growing, as is the number of people served by such programs.

According to a new study published on the Health Affairs Blog, there are more than 900 ACOs across the country – a 10 percent increase over a year ago.

32 million Americans are served by ACOs today – 2.2 million more than a year ago.  Among them, 59 percent are served through commercial contracts, 29 percent by Medicare contracts, and 12 percent under Medicaid contracts.  ACO growth is greatest in metropolitan areas, the states with the greatest ACO penetration are Rhode Island and Maine, and the states with the least ACO penetration are Wyoming and West Virginia.

Among alternative payment models, growth is greatest among shared-savings and shared-risk ACOs, include episode-based models and partially- and fully-capitated payments for patient populations.  Today, APMs account for more than 30 percent of Medicare payments, with the greatest number, by far, participating in Medicare’s Comprehensive Primary Care Plus Model, followed by Medicare’s Comprehensive Care for Joint Replacement and Shared Savings Program models.

Learn more about the growth of ACOs and APMs, the current policy environment for such approaches, and possible future changes in these approaches in this Health Affairs Blog article.

Serving High-Need, High-Cost Medicare Patients

With Medicare beneficiaries who have four or more chronic conditions accounting for 90 percent of Medicare hospital readmissions and 74 percent of Medicare costs (both 2010 figures), policy-makers are constantly looking for better ways to serve such individuals.

Academic research suggests that these beneficiaries need a variety of non-medical social interventions and supports, most of which are not covered by Medicare.

With this in mind, the Bipartisan Policy Center has prepared a review of current regulatory, payment, and other barriers that prevent providers and insurers from meeting some of the non-medical needs of high-need, high-cost patients that result in such high health care costs and hospital readmissions rates.

Many of these high-need, high-cost patients live in low-income communities served by private safety-net hospitals, making this a subject of particular interest to NAUH and its members.

Many of these high-need, high-cost patients live in low-income communities served by private urban safety-net hospitals, making this a subject of particular interest to NAUH and its members.

Among the care models this review considers are Medicare Advantage plans, Medicare Advantage Dual-Eligible Special Needs Plans, Medicare Shared Savings Program Accountable Care Organizations, Next Generation ACOs, Comprehensive Primary Care Plus Model Participants, and Programs for All-Inclusive Care for the Elderly (PACE).

Find this all in the Bipartisan Policy Center report Challenges and Opportunities in Caring for High-Need, High-Cost Medicare Patients, which is available here.

Urban Hospitals in ACOS Better at Reducing Some Readmissions Rates

A new study has found that hospitals located in metropolitan areas that participate in accountable care organizations are doing a better job than other hospitals of reducing 30-day readmissions rates for Medicare patients who originally were discharged into skilled nursing facilities.

iStock_000008112453XSmallIt appears this improved performance can be attributed to two things: better discharge planning and better coordination with the skilled nursing facilities.

To learn more go here to see the study “ACO-Affiliated Hospitals Reduced Rehospitalizations from Skilled Nursing Facilities Faster Than Other Hospitals.”

ACOs Serving High Proportions of Racial and Ethnic Minorities Lag in Quality Performance

Accountable care organizations that serve large numbers of minority patients score lower on Medicare quality measures than other ACOs, a new study has found.

According to the study, ACOs serving larger numbers of minority patients perform worse than other ACOs on 25 of 44 Medicare performance measures – and that performance does not improve over time.

Happy medical team of doctors togetherThe study also pointed out that the minority patients served by ACOs are generally poorer and sicker than other ACO participants.

These are the very patients typically served in especially large numbers by private safety-net hospitals.

Learn more about these and other findings in the report “ACOs Serving High Proportions of Racial and Ethnic Minorities Lag in Quality Performance,” which can be found here.

Feds Launch Medicare-Medicaid ACO Model

The Center for Medicare and Medicaid Innovation has announced a new Medicare-Medicaid Accountable Care Organization Model that it says

…is focused on improving quality of care and reducing costs for Medicare-Medicaid enrollees. The MMACO Model builds on the Medicare Shared Savings Program (Shared Savings Program), in which groups of providers take on accountability for the Medicare costs and quality of care for Medicare patients. Through the Model, CMS will partner with interested states to offer new and existing Shared Savings Program ACOs the opportunity to take on accountability for the Medicaid costs for their assigned Medicare-Medicaid enrollees.

cmsIn this new model, the Innovation Center

… seeks to encourage participation from safety-net providers in Alternative Payment Models. Medicare-Medicaid ACOs that qualify as “Safety-Net ACOs” will be eligible to receive pre-payment of Medicare shared savings to support the ACO’s investment in care coordination infrastructure.

The Innovation Center envisions pursuing such undertakings with six states, which will be chosen on a competitive basis.

Learn more about the Medicare-Medicaid Accountable Care Organization model here, on the Innovation Center’s web site.

Medicaid Supplemental Payments Set to Evolve

New health care delivery and reimbursement systems and new federal regulations will result in changes in how states deploy their Medicaid resources through supplemental payments in the coming years.

A new Commonwealth Fund report describes the kinds of supplemental Medicaid payments states currently make to hospitals – such as disproportionate share and upper payment limit payments – and notes the differing degree to which individual states use such supplemental payments.

financeIt also describes how those supplemental payments may be restructured in the coming years to foster greater use of value-based purchasing and to reward achieving state-created quality goals through new delivery and reimbursement systems such as accountable care organizations, bundled payments, shared savings program, capitated arrangements, and shared risk.

Such changes have potentially serious implications for private safety-net hospitals.

Learn more about what the future may have in store for Medicaid supplemental payments in the Commonwealth Fund report Integrating Medicaid Supplemental Payments into Value-Based Purchasing.