Medicare should pay skilled nursing facilities and rehab facilities equally for certain treatments, MedPAC tells Congress

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AHCA President and CEO Mark Parkinson
AHCA President and CEO Mark Parkinson

Skilled nursing facilities and inpatient rehabilitation facilities should receive the same payments for treating certain conditions, the Medicare Payment Advisory Commission recommended in its latest report to Congress. The “site-neutral payment” proposal won praise from the nation's largest long-term care association.

“A site-neutral payment system would focus on the patient and their needs, regardless of setting, and encourage all settings to provide efficient, high-quality care,” said Mark Parkinson, CEO and president of the American Health Care Association/National Center for Assisted Living.

MedPAC has long shown support for equalizing IRF and SNF payments, and the group provided an in-depth consideration of the potential policy in the report released Friday. While IRFs must meet more stringent guidelines than SNFs in areas such as staffing, the two settings treat similar patient populations and achieve similar outcomes, the analysis determined.

The panel examined the possible effects of site-neutral payments for three conditions: rehab after stroke, major joint replacement and hip/femur procedures (such as for hip fractures). Patient characteristics and outcomes were very similar for the orthopedic conditions, but more variable for stroke rehab. For instance, SNFs tend to treat stroke patients at risk for falls, while IRFs see more individuals with swallowing issues.

More study should be conducted on stroke-related conditions, but the orthopedic conditions are a “strong starting point for a site-neutral policy,” the report concluded.

Leveling these post-acute payments would potentially save the Medicare program money, because IRF reimbursements exceed SNF payments by as much as 50%, MedPAC has noted. Rehab facilities have protested the proposed changes, but they might not take a substantial hit to their bottom lines, according to Friday's report. This is because the site-neutral policy would not affect “add-on payments,” such as monetary reimbursement around having a teaching program, which many IRFs receive.

IRFs also should have regulations loosened to increase their competitiveness with nursing facilities if the site-neutral payments are implemented, MedPAC recommended. For example, regulators could waive the requirement that IRFs treat only patients who can tolerate aggressive therapy.

Click here to access the complete report.

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