Medicare Advisers Mull Transition to Post-Acute Care Pay System

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By Mike Stankiewicz

Post acute-care, such as in nursing homes, could see a three-year transition to a new pay system starting in 2021, under an approach apparently favored by a Medicare payment advisory body.

The Medicare Payment Advisory Commission, which is set to vote in April on its recommendations to Congress, discussed March 2 the impact of a move to a unified prospective payment system across different settings for post-acute care. Currently, providers are reimbursed based on a fixed single amount that may benefit some treatment settings over others.

MedPAC has recommended moving post-acute care settings to a new system over several years. The commission says such a system would create a uniform payment system across all post-acute settings (including long-term care hospitals, home health-care providers and nursing homes), base payments on patient characteristics instead of where patients are treated and eliminate biases that favor treating some conditions over others.

Most commission members seemed to support a three-year transition, with two years of blended rates between the current and proposed systems and the third year being the new rate.

One commissioner said this would allow a smoother transition of rates for providers.

Another commissioner, Bruce Pyenson, recommended a longer, broader six-year plan. That would give providers three years to get ready and three years to implement changes in payment, Pyenson told the panel. Pyenson is principal and consulting actuary at Milliman, Inc., an independent actuarial and consulting firm.

At their meeting, commissioners also considered a slate of other draft proposals, which most commissioners appeared to support:

  •  suggesting Congress begin aligning specific regulatory requirements and periodically revising and rebasing payments as needed, to keep payments aligned with the cost of care; and
  •  advising Congress to reduce payments.

Earlier Implementation

In a June 2016 report, MedPAC said a unified payment system could be implemented sooner than the current timetable of 2024 and later.

The chairman of the commission, Francis J. Crosson, recommended March 2 starting the transition in 2021. However, MedPAC principal policy analyst Carol Carter said the implementation’s start date would depend on when Congress decides to act on MedPAC’s proposal.

The commission also discussed what kind of timetable for legislation the Medicare agency would need to implement the system.

MedPAC will continue its meeting March 3. The next report from the commission to Congress is scheduled for June.

To contact the reporter on this story: Mike Stankiewicz in Washington at

To contact the editor responsible for this story: Brian Broderick at

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