James Berklan

A funny thing happened on the way to a semi-annual eye rolling about a MedPAC report. It contained some information that could make long-term care providers happy.

The Medicare Payment Advisory Commission never has anything good to say about skilled nursing payment rates. Never ever.

Oh, it says the rates are good all right. Too good. So then the panel votes to recommend yet again that pay rates be lowered. Can anyone with a sharp pencil can’t really blame MedPAC commissioners for acting this way? Providers acknowledge they’ve done well with Medicare rates. But, they quickly add, they need generous Medicare margins to offset meager Medicaid pay rates.

Well, the Medicare PAC’s job is to make recommendations based on what it knows about Medicare matters. It’s not some sort of college financial aid department charged with taking all types of revenue and income into consideration. (Yet, it actually does discuss Medicare AND Medicaid margins and ideas for improving equilibrium in the 400-plus-page report it released in mid-March.)

MedPAC, however, voted to eliminate any cost of living uptick in Medicare payments for next year. It also recommended a 4% cut from current Medicare pay levels, as well as further cuts in subsequent years. And it wants a revamping of the entire payment system.

The commissioners have been tough, saying providers have been “nimble” after past cutbacks, a euphemistic way of saying they’ve become adept at gaming, or at least getting around, the system.

So what’s good out of the MedPAC report?

The panel pushing quality-of-care studies. In brief, hospital readmissions dropped for the first time and discharges to community settings were up 2%. This is very good.

“One of the things that providers can benefit from is MedPAC is on the forefront of quality efforts,” says quality guru Andrew Kramer, M.D., the president of Providigm, a contract research group employed by the federal government. “This keeps evolving.”

Providers would make a big mistake by not looking deeper into MedPAC’s research on quality.

“To me, we’re at the very early stages of impacting [quality levels],” Kramer told me. “It’s the first year rates are starting to improve after a decade of relatively flat research. We’re already talking about next year’s work. It’s going to push the frontiers again.”

At the hand of MedPAC, no less.