Skilled nursing providers would see no Medicare pay boost next year if the Medicare Payment Advisory Commission has its way. The advisory panel, however, also cautions that any move to trim payments be taken very carefully in light of the onset of the new Patient Driven Payment Model.

MedPAC commissioners reviewed Medicare’s payment adequacy for skilled nursing facilities recently and discussed update options for providers in 2021 during a meeting earlier this month.

The report — which looked at 2018 data — found that payment adequacy indicators for beneficiary access to care, quality of care, SNFs’ access to capital and Medicare payments and SNF costs were all “positive.” 

The commission’s draft recommendation calls for a zero payment uptick, much as it has in recent years. MedPAC is an advisory body to Congress, which can — and frequently has — ignored recommendations regarding SNF payments.

Pay reduction caution

The panel also called on Congress to “proceed cautiously in recommending reductions to payments” based on impending changes in industry, including PDPM, which was implemented Oct. 1. 

“The level of Medicare payments indicate that a reduction to payments is needed to more closely align aggregate payments to aggregate costs. However, we expect the SNF industry to undergo considerable changes as it adjusts to the redesign PPS,” a draft recommendation states.

“A zero update will begin to bring payments aligned with costs while exerting some pressure on providers to keep their cost growth low. The Commission will monitor beneficiary access, quality of care and financial performance, and may consider future recommendations based on industry response to the new payment system.” 

The commission also reviewed payment adequacy for home health care services, inpatient rehabilitation facilities, long-term care hospital services, hospice and outpatient dialysis services during the meeting. 

The commission is expected to vote on the draft recommendations in January. Its formal report will be issued to Congress in March for fiscal 2021, which begins in October.