MedPAC Formally Votes to Recommend Payment Reductions to Congress for IRFs
In December 2019 and January 2020, the Medicare Payment Advisory Commission (MedPAC) held public meeting sessions to discuss payment adequacy and updates for the four Medicare post-acute care (PAC) settings. The initial session, held on December 5, 2019, covered each PAC setting’s payment adequacy in detail and allowed for Commissioner discussion and review of draft payment recommendations. The subsequent session, held on January 16, 2020, included a brief overview of the field for each PAC setting and a formal, expedited vote on the payment update recommendations.
Remy Kerr, MPH, Health Policy and Research Manager
MedPAC PAC Setting Payment Update Recommendations for 2021 • IRF Recommendation: 5% payment reduction • LTCH Recommendation: 2% payment increase • SNF Recommendation: No update • HHA Recommendation: 7% payment reduction
MedPAC staff reiterated their prior findings that Medicare payment levels are high in inpatient rehabilitation facilities (IRFs), skilled nursing facilities (SNFs), and home health agencies (HHAs) relative to cost. Additionally, the SNF and HHA revised payment systems (effective in FY 2020 and CY 2020, respectively) aim to increase payment equity among settings, but may require future changes based on provider incentives. Lastly, MedPAC staff explained that settings with provider-reported functional measures may be biased in regards to data, and MedPAC continues to work toward improvements in consistency and accuracy. At the December meeting, MedPAC staff recommended a 5% payment reduction in fiscal year (FY) 2021 for IRFs. In addition to the payment update, staff restated its March 2016 recommendation for the Secretary to conduct focused medical record reviews of IRFs with unusual patterns of case mix and coding and expand the high-cost outlier pool. The 5% payment reduction has been recommended since 2017; however, Congress has not previously acted on the recommendation. In addition to the IRF payment update, MedPAC recommended for 2021: 2% payment increase for long-term care hospitals (LTCHs); 7% payment reduction for HHAs; and no update for SNFs. At the subsequent January meeting, Commissioners unanimously approved each of the recommendations via an expedited formal vote. The recommendations are expected to be included in MedPAC’s March 2020 Report to Congress. Further details for each PAC setting presentation are included below. Inpatient Rehabilitation Facilities At the December public meeting, staff provided a comprehensive overview of the state of the field for IRFs in 2018. The total number of IRFs in 2018 decreased slightly (0.7%) to 1,170, and were mostly hospital-based units. While the majority of IRFs are hospital-based, freestanding IRFs increased by 3.9%, and hospital-based units declined by 2.1% between 2017 and 2018. IRFs accounted for $8 billion of total Medicare fee-for-service (FFS)
28 AMRPA Magazine / February 2020
