Equal pay for equal work? Has MedPAC lost its mind?

John O'Connor
John O'Connor

If you are a post-acute provider, the big health news last week was not Donald Trump unveiling his post-Obamacare blueprint. Nor was it the repeated promise among his GOP opponents to dismantle the Affordable Care Act.

No, the potential game-changer was largely overlooked. It came at Thursday's meeting of the Medicare Payment Advisory Commission.

That's where it was revealed that MedPAC is getting closer to a rather brazen new approach to post-acute payments: equal pay for equal work.

Should this controversial shift play out, we could soon find ourselves in a world where Medicare offers identical payment rates to skilled nursing facilities, home health agencies, long-term care hospitals and inpatient rehabilitation facilities! I swear I'm not making this up.

Now before you get all hyper-ventily, keep two things in mind. The first is that this revolutionary talk is still just that, talk. The second is that what MedPAC proposes, Congress often disposes. Or have we already forgotten how the payment commision's annual calls for SNF funding cuts have been routinely ignored?

As things now stand, the Medicare program reimburses care for similar patients differently. Whether that is for clinical or political reasons is a matter of opinion. But it is probably worth noting that inpatient rehab facilities now get the best rates. Do you think it might be more than a coincidence that hospitals spend a lot more money than nursing homes on lobbying? But I digress.

It's no surprise that skilled operators would like to snap off a piece of that inpatient rehab payment action. But here's something to keep in mind: no-brainers don't always turn out to be the smart move.

For when regulators start re-jiggering rates in the name of fairness, it's anybody's guess how things will turn out. Sometimes you land an MDS-type bonanza, where sharp operators can upshift residents into higher-pay categories before regulators smell a loophole.

But the hand that giveth also can taketh away. Some of us have been around long enough to remember when Medicare payment adjustments were made in the late 1990s. That shift was initially hailed by several industry leaders as a way for operators to finally get paid for tendered services. Half a decade later, more than 1,000 skilled care operators were seeking creditor protection. Oops.

So we'll see what happens. On the face of it, equal pay might not seem like such a far-fetched notion. But as anyone in Washington will tell you, a good idea without the clout to back it up can get back in line.

John O'Connor is McKnight's Editorial Director.

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McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Emily Mongan.

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