Anne Tumlinson

Even as the Medicare Payment Advisory Commission called for cuts to skilled nursing in its semi-annual report to Congress this week, lawmakers appeared ready to shape payment reform themselves.

MedPAC called on Congress to eliminate the Medicare market basket rate increases for fiscal years 2019 (2%) and 2020 (2.1%), and, as previously discussed, roll out a new prospective payment system for skilled nursing facilities in 2019.

MedPAC said March 15 those changes could reduce Medicare spending by $750 million to $2 billion next fiscal year and more than $10 billion over five years.

The report formalizes discussions the commission had at its January and March meetings, but Congress isn’t required to follow any recommendations included in the 563-page document.

The recommendation  to start a new SNF payment system in 2019 would coincide with a redistribution of weights to mirror the unified PAC payment system already proposed for 2021, notes Anne Tumlison, CEO of Anne Tumlinson Innovations.

“This feels like an academic exercise not grounded in the real world,” Tumlinson told McKnight’s Friday. “Or just reflective of their frustration at making these recommendations year after year with little to no result.”

A good indication that lawmakers might ignore MedPac once again: On Thursday, several House members formed their own bipartisan caucus to look at value-based reform instead of waiting for the Centers for Medicare & Medicaid Services to roll out its changes.

“With the healthcare industry rapidly transforming from a volume-driven system to one that rewards value and outcomes, it is vital that we maintain this acceleration by encouraging a marketplace of multiple payment models and using lessons learned to improve care for consumers,” Rep. Mike Kelly (R-PA), a founding member, said in a release announcing the group’s formation. “The main focus of the Health Care Innovation Caucus will be to explore and advance successful, innovative payment models as well as the technologies needed to support these models.”

For its part, the commission said Medicare margins appear “more than adequate” to accommodate increasing SNF costs even without pay increases.

But a Republican tax plan passed in February already freezes the rate of the Medicare increases, which would result in a $1.9 billion decrease in planned funding over 10 years. At that time, AHCA called the rate reduction “a clear problem.”

“Skilled nursing providers are operating on razor thin margins,” AHCA President and CEO Mark Parkinson reiterated Friday. “MedPAC’s report that non Medicare margins are negative 2.3% and total margins have plummeted to .7% should sound the alarms for policy makers across the country.”

“In recent months, the financial challenges for some of the largest providers in the country reached a boiling point,” Parkinson added. “Providing adequate reimbursement and reasonable regulation must be the priority for our policy makers.”