Medicare Post-Acute Care Changes Likely Not Going Anywhere

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By Mike Stankiewicz

Medicare payment changes for nursing homes and home-health agencies aren’t on lawmakers’ radar screens, in spite of congressional advisers’ recommendations.

The Medicare Payment Advisory Commission, the main adviser to Congress on Medicare payment policies, said in its June 15 report that a unified payment system for post-acute care should start in 2021. A unified system would base Medicare payments for nursing homes and home-health agencies on patient characteristics instead of the setting where the care is provided. The proposal has received praise and raised concern, but health-care stakeholders said Congress is unlikely to take up the recommendations anytime soon.

“I’m not sure [the proposal] has the political will at this point,” Erica Breese, senior manager at Avalere Health, a health-care consulting company in Washington, told Bloomberg BNA June 21. “It’s way too big and too controversial for them to take on right now.”

In its June 2016 report, MedPAC said the unified payment system could be implemented sooner than the 2024 timetable outlined in the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014. The IMPACT Act requires reports on a post-acute care prospective payment system but doesn’t mandate the implementation of a unified prospective payment system. Only Congress can implement such changes.

Congress Already Has Hands Full

Joy Cameron, vice president of policy and innovation at the Visiting Nurse Associations of America in Arlington, Va., said MedPAC continues to make recommendations that Congress has ignored and that lawmakers have shown little interest in taking up the post-acute payment reforms.

“Often Congress reads the report and goes their own way,” she told Bloomberg BNA June 20. “The unified payment isn’t going to get much traction in Congress, especially the earlier timeline. I don’t know if it is a lack of interest, or if their plates are full.”

Richard A. MacMillan, senior vice president and senior counsel for legislative and regulatory affairs at LHC Group, a national provider of post-acute services based in Lafayette, La., said Congress might be too busy with other things to take up MedPAC’s recommendation.

“Right now, you have the Senate Finance Committee focusing on chronic care issues, and [House] Ways and Means focusing on post-acute value based purchasing,” he told Bloomberg BNA June 20. “So it would likely mean they would have to take time away from those other things in order to focus on the unified payment system.”

“Congress is busy right now with health care, especially surrounding the Affordable Care Act, and this hasn’t been part of the discussion yet,” Cameron said.

Industry Pushback

Mark Reagan, managing partner in the health-care law practice of Hooper, Lundy & Bookman PC in San Francisco, said health-care providers could be overwhelmed if Congress decided to implement MedPAC’s recommendations.

“While payment reform is laudable, MedPAC and the CMS [Centers for Medicare & Medicaid Services] should be cautious about too much change at too fast a pace. PAC providers are adapting to ACOs [accountable care organizations] and dealing with growing Medicare Advantage penetration rates,” he told Bloomberg BNA June 20. “The combination of all of these changes could create access issues just when the baby boom is cresting.”

Cynthia Morton, executive vice president at the National Association for the Support of Long Term Care, a trade association in Washington, said it would be difficult for health-care providers to juggle all these changes at once. “While policy changes overnight, how hospitals work and operate does not,” she told Bloomberg BNA June 21.

Breese said Congress would also receive heavy pushback from hospitals. “They would see opposition not only because of payment cuts but procedural changes as well, like stay times and cost structures and other regulatory requirements,” she said.

According to the June 15 report, Medicare payments exceeded providers’ costs by 14 percent across the post-acute care system. MedPAC recommended a 5 percent reduction, which didn’t sit well with industry groups.

“This cut would be incorporated into the new payment system,” MacMillan said. “This is one of the biggest things we are pushing back against.”

Cameron said the 5 percent cut was “untenable.”

Possible Future Action

Reagan said unified payments could be more of a “next decade” issue due to their complexity and regulatory design.

“It is difficult to know how viable the approach will be but it is something that those of us working in the post-acute sector have viewed as an ultimate goal of MedPAC for some time, albeit more conceptual in nature until now,” Reagan said.

MacMillan said post-acute care spending is growing, and it’s the fastest-growing part of the Medicare system. “I believe that in time Congress may eventually consider this,” he said.

Deborah Kantar Gardner, partner at Ropes & Gray’s health-care practice in Boston, said the proposal might eventually be considered and implemented, but it would take some time.

“There will be winners and losers in this, and thus considerable stakeholder involvement, and the further need to revisit the regulatory frameworks for the various long-term care providers,” she told Bloomberg BNA June 20. “I view this proposal as a more long-term, gradually implemented idea, but one that may be well-received.”

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

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

For More Information

The June 15 MedPAC report is at

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