MedPAC Wants Major Changes to Therapy Reimbursement

In the March 2012 Report to Congress from the Medicare Payment Advisory Commission (MedPAC), it was recommended that reimbursement rates for Skilled Nursing Facilities (SNFs) be lowered by 4% in 2014. MedPAC is arguing for this rebasing because the commission feels that profit margins for the long-term care sector are simply too high.

Mark Miller, executive director of MedPAC, says, “We are talking about the guts of the payment system… Our recommendation is to make therapy not open ended but instead based on individual patient characteristics.” Miller added, “The point is to put therapy on more of a prospective basis.”Alert!

While Congress is not obligated to institute all, or any, of the changes recommended by MedPAC, the commission is pushing for changes not just in the long-term care sector, but also in fee-for-service Medicare, Medicare Advantage plans, and Medicare Part D prescription drug plans. MedPAC has recommended that Congress have HHS reduce reimbursement rates by 4% as well as reducing payments to SNFs that have a high rate of patient re-hospitalization (adjusted for relative patient risk). Reducing re-hospitalizations is a common goal among all healthcare advocates however some disagree with the methods proposed by MedPAC. Governor Mark Parkinson, president and CEO of the American Health Care Association (AHCA) says, “While AHCA and MedPAC agree that reducing re-hospitalization rates will produce savings for the overall Medicare program, we differ in how we reach that goal. AHCA proposes incentives to drive change, while MedPAC recommends penalties for providers with higher rates of hospital readmissions.”

As anyone who works in the long-term care sector can attest, there have been numerous Medicare cutbacks in recent years that have forced business, facilities, and employees to tighten their belts. While MedPAC claims that the profit margin of the long-term care sector is higher than it should be, the economic fallout of these proposed measures should not be taken lightly.

Source: Provider Magazine