MedPAC calls for payment reforms to come even earlier

Federal lawmakers’ advisory panel for Medicare made it official in its report to Congress in June: It recommends implementation of a unified post-acute payment system beginning in 2021 — three years earlier than first proposed.

The Improving Medicare Post-Acute Care Transformation Act of 2014 originally published a timeline envisioning proposal of a new plan in 2024, with implementation coming sometime after.

The Medicare Payment Advisory Commission, however, wants it all sooner. The panelists say the Centers for Medicare & Medicaid Services should start implementation in 2021 and include a three-year transition period.

MedPAC has been pointed about its recommendations because, it says, Medicare payments have been 14% above providers’ actual costs.

The June report recommended that payments be lowered 5% “to more closely align payments with the cost of care.” It also calls for setting-specific regulations aligned to allow all providers to “compete on a level playing field.”

MedPAC also suggested allowing providers the option to bypass the transition period and be given full payments.

“While this option would raise program spending during the transition, it would more quickly base payments on patient characteristics and make them more equitable,” report authors said.

The group’s report to Congress also includes recommendations on long-stay nursing home residents’ hospital use, Medicare Part B drug payment policy issues, and the relationship between physicians and other Medicare services. The panel initially makes recommendations in January and then meets to smooth them out in March before issuing a final report each June.