The American Health Care Association is challenging the Medicare Payment Advisory Commission after it recommended temporary solutions, versus permanent payment changes, for providers negatively impacted by the coronavirus pandemic.

The commission discussed draft recommendations for nursing home Medicare payments in fiscal year 2022 during a meeting late last week, where members discussed payment adequacy for skilled nursing facilities.

The panel’s report found that payment adequacy indicators for beneficiary access to care, quality of care, skilled nursing facilities’ access to capital, and Medicare payments and SNF costs were all “positive,” and that the aggregate Medicare margin was 11.3% for SNFs in 2019. Draft recommendations called for “zero update” to Medicare payment payment rates, while also cautioning against moves to decrease payments. 

The commission also noted that while Medicare payments “are more than adequate,” nursing homes may need additional financial support due to COVID-19. However, it added that an update to Medicare’s per day payments for the fiscal year would be “a poor approach because assistance would not begin until October 2021 and funds would not be targeted to facilities in need.” 

“Instead, additional financial support should be separate from the annual update and targeted to facilities that have been especially affected by the coronavirus,” the commission noted. 

The group’s report stated that “temporary or highly variable coronavirus effects are best addressed through targeted temporary funding policies rather than permanent changes to all providers’ payment rates in 2022 and future years. 

Mike Cheek, AHCA’s senior vice president for reimbursement policy, said MedPAC’s thinking “fails to recognize” the impact of massive price increases and staffing costs providers have undertaken during the pandemic. 

“The commission’s comments are misaligned with the current state of the escalating national health crisis,” he told Inside Health Policy.

He added that the panel’s decision “does not recognize that COVID-19 will fundamentally change how SNFs are operated and will deliver care — particularly the new permanent patient-specific testing and treatment costs associated with an active COVID-19 diagnosis that were not built into the current PPS payment model and will persist once temporary funding relief expires.” 

“These vital changes to protect beneficiaries and staff are not transient and will require additional funds. We hope, going forward, the Commission will work to ensure its commentary reflects the current environment for beneficiaries and providers and is more forward thinking,” Cheek said.