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AHA: Post-Acute Care Medicare Reimbursement Reform Needs Time

The AHA called on MedPAC to reconsider accelerating the Medicare reimbursement reform timeline for post-acute care settings.

The AHA urged CMS and ASPE to further analyze MedPAC's recommendation to truncate post-acute care Medicare payment reform implementation

Source: Thinkstock

- Later this month, the Medicare Payment Advisory Commission (MedPAC) plans to vote on a draft recommendation to Congress that would accelerate the development and implementation of a unified Medicare reimbursement system for four post-acute care settings. But the American Hospital Association (AHA) recently called on the commission delay the timeline.

Under the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014, lawmakers mandated CMS to condense prospective payment systems for skilled nursing facilities, long-term care hospitals, inpatient rehabilitation facilities, and home health agencies into a single Medicare reimbursement system.

MedPAC projected a proposal for the unified post-acute care Medicare reimbursement system’s implementation to be completed by 2021.

But the most recent draft recommendations revealed that MedPAC intends to truncate the implementation timeline. The commission now expects an implementation proposal by 2018 or 2019.

“[W]e urge that, prior to voting on its recommendation, the Commission collect more information about the feasibility and advisability of removing five or more years from the statutory timeline for creating and operationalizing a new payment system,” the AHA wrote.

“We are concerned that such an aggressive move may reduce the reliability and accuracy of the final model, which could result in significant mis-payment and, as a result, harm access to care, particularly for high-acuity patients who use specialized post-acute services that are not provided in all of the PAC [post-acute care] settings,” the industry group continued.

The AHA argued that CMS and the HHS Assistant Secretary for Planning and Evaluation (ASPE) have only just started to develop, test, and validate a unified Medicare reimbursement system for post-acute care settings. The federal organizations need more time to research how healthcare payment reform will work and its impact on post-acute care access.

For example, CMS and ASPE need time to ensure that the Medicare reimbursement system is transparently shared with stakeholders before the implementation proposal is finalized. The organizations should also verify that the payment model can be replicated by other stakeholders.

The AHA added that CMS and ASPE may require additional time to choose, gather, and prepare appropriate datasets required to flesh out the unified post-acute care Medicare reimbursement system.

MedPAC primarily used information from the 2012 CMS Post-Acute Care Payment Reform Demonstration to develop the unified payment system concept. But the AHA contended that the data was limited, meaning CMS and ASPE will likely need to look to more sources for data on healthcare costs and patient experience.

The shortened implementation timeline also does not allow for CMS and ASPE to properly analyze potential post-acute care payment under a unified Medicare reimbursement system. Before a final implementation proposal, the AHA stated that the federal organizations should consider:

• Analyzing alternatives to the unified payment system prototype’s regression component that assigns each patient’s payment

• Enabling the unified payment system to allow for annual CMS payment updates since the system will include more variables than most Medicare reimbursement systems

• Developing payment policies for outliers, higher-cost patients, and other special patient cases (e.g. short stay, deaths, transfers, and patients who left against medical advice)

• Validating the financial and operational effects of different transition policies, such as its length, blended payment amounts, and the option to bypass the transition period

• Determining payment-to-cost ratios

Like other Medicare payment reforms, the AHA also called on MedPAC to further test a unified post-acute care Medicare reimbursement system. The commission should ensure that the new model is “reliable, accurate, fair, budget-neutral, stable, preserves access to care for medically complex patients, provides the correct incentives to providers to provide quality care.”

Through various model iterations, MedPAC should determine the model’s costs, explanatory variables at the patient- and facility-level, coefficients, and how coefficients will calculate payments.

In addition to creating and validating a unified post-acute care payment model, the AHA also urged CMS and ASPE to develop a regulatory framework. Consolidating four different Medicare reimbursement systems into one will require extensive policy work, so the federal agencies should consider the following:

• Developing parameters to define one or more post-acute care stay lengths

• Creating new risk-adjustment and outlier policies

• Establishing payment adjustments and quality metrics for care access and quality for high-acuity post-acute care patients

• Verifying that the payment model is based on a patient-centered quality framework that ensures both care quality and cost outcomes are realized during and after a post-acute care stay

• Defining which post-acute fee-for-service regulations and statutory provisions need to be waived, rescinded, or repealed to implement the unified payment system

• Estimating how rural and low-volume providers will be impacted

• Considering how to adjust Medicare reimbursement for teaching, disproportionate share, and rural providers

• Developing a combined patient assessment, quality reporting, readmission, and pay-for-performance system

• Creating new participation conditions for both institutional and home-based post-acute care providers

• Incorporating state licensure, certificate of need, and other state-level regulatory reforms

• Establishing systems to prevent care stinting, unnecessary healthcare utilization, and patient cherry-picking

“Prior to a vote by the Commissioners, these missing details should be explored in partnership with CMS and ASPE in order to determine the feasibility of completing this extensive set of policy work in time to enable the introduction of PAC PPS legislative proposal in 2018 or 2019,” the AHA concluded.

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