House panel hears testimony on site-neutral payments, potential for Medicaid cuts to providers

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House panel hears testimony on site-neutral payments, potential for Medicaid cuts to providers
House panel hears testimony on site-neutral payments, potential for Medicaid cuts to providers

Site-neutral payments for post-acute services could potentially reduce federal spending on healthcare without compromising patient outcomes, a Medicare Payment Advisory Commission official told a Congressional panel Tuesday.

MedPAC delved into site-neutral payments in its June 2014 report to Congress and is continuing to study the issue, said Executive Director Mark Miller, Ph.D. He was appearing before the Health Subcommittee of the House Committee on Energy and Commerce. The hearing was to gather information on policies that the next Congress could undertake to cut federal healthcare spending.

The site-neutral concept means paying skilled nursing facilities and inpatient rehabilitation facilities at the same rate for certain services. This would save money because IRF Medicare payments are as much as 42% higher than SNF payments, even though both provider types treat similar types of patients, Miller told the subcommittee. MedPAC is zeroing in on certain types of services, such as therapy after joint replacement, that would be good candidates for equalized payments.

All the services being considered “were safely provided a majority of the time in the lower-cost SNF setting,” Miller stated in written testimony.

Long-term care provider associations have come out in strong support of site-neutral payments, but rehab provider groups and some consumer advocates are opposed. The Coalition to Preserve Rehabilitation submitted a letter to the House subcommittee arguing that patient care in fact would be eroded under site-neutral payments, because IRFs provide more intensive care than SNFs.

With both houses of Congress about to be in Republican control for the first time in eight years, a long-term care expert warned the subcommittee against Medicare and Medicaid reforms that often are floated by GOP lawmakers. These ideas — such as Medicare vouchers or a block-grant version of Medicaid — would shift costs to the states, likely causing them to tighten benefits and cut provider payments, said Judy Feder, Ph.D., of the Urban Institute and Georgetown University School of Public Policy. Feder served on the Congressional Commission on Long-Term Care, which issued a report last year.

Current reforms already are reducing Medicare and Medicaid spending, and from a solvency perspective these programs “are not in crisis,” Feder said.

Click here to access a video of the hearing and the written testimony.