MedPAC: SNF rates 'more than adequate,' payment reforms not coming fast enough

Medicare’s current payment rates for skilled nursing facilities are “more than adequate” to keep up with cost growth, the Medicare Payment Advisory Commission said last week.
Medicare’s current payment rates for skilled nursing facilities are “more than adequate” to keep up with cost growth, the Medicare Payment Advisory Commission said last week.

Medicare's current payment rates for skilled nursing facilities are “more than adequate” to keep up with cost growth, the Medicare Payment Advisory Commission has reasserted.

In a May 25 letter to Centers for Medicare & Medicaid Services Acting Administrator Andy Slavitt, the commission provided its thoughts on the proposed skilled nursing payment rule for FY 2017, released in April.

While it acknowledged that CMS is legally bound to update the payment rates, the commission argued that the current level “appears more than adequate to accommodate cost growth” based on beneficiary access, volume of services, supply of providers and access to capital.

Providers, unsurprisingly, disagreed with MedPAC's recommendations. The skilled nursing sector continues to struggle as CMS shifts away from traditional fee-for-service, said Mike Cheek, senior vice president of finance policy & legal affairs for the American Health Care Association, in a statement responding to the letter.

"Nothing has fundamentally changed since MedPAC issued its prior SNF payment recommendations,” Cheek said.

MedPAC's letter also touched on its suggestion that Congress freeze market-basket updates for fiscal years 2017 and 2018, in order to allow CMS to revise the skilled nursing payment system.

It has a “growing impatience with the lack of movement toward reform in this setting despite the continued lack of fiscal pressure exerted by the SNF PPS on providers,” the letter reads. “Not waiting for a revised PPS to be implemented, the recommendation would set small rebasing steps in motion to lower Medicare payments while the SNF PPS is revised.”

The commission also said it was “dismayed” that the proposed payment rule fails to correct “well-established shortcomings of the SNF PPS” or indicates when payment reforms will be completed. Aside from its frustrations, MedPac noted that its unified, site-neutral payment system — which goes to Congress this month — would be a “marked improvement” over the current system.

In regards to the proposed rule's value-based purchasing program, MedPAC noted that reliance on a solo performance measure — all-cause, all-condition 30-day readmissions — could be improved upon. The commission recommends that CMS, if possible, “broaden the scope” of the VBP policy to include other outcome measures.

MedPac also said it supports potentially preventable readmission measures that cover readmissions past the 30-day discharge from a hospital, since many skilled nursing stays exceed that time period.

“Using [the 30-day readmission] definition will relieve SNFs of the responsibility for beneficiaries who have a readmission after the 30 days but who are still patients in the SNF,” the letter reads. “Further, the current definition could create incentives for SNFs to delay needed hospital care until after the 30th day to avoid including the readmission in its performance measure.”

To read MedPAC's full letter, which also includes comments on Medicare spending per beneficiary and drug regimen reviews, click here.