MedPAC Calls For Cancellation Of Medicare Pay Raise For Nursing Homes

In a proposed rule published in the April 20 Federal Register, CMS said it is seeking a 1.4% net hike in the nursing home Medicare payment rate. The rate increase would reflect a market basket increase of 2.6% and two deductions, including a 0.6% cut for productivity adjustment and a 0.6% cut as a forecast error adjustment. However, in a letter to CMS, MedPAC has said that it believes no update is warranted because “Medicare’s current level of payments appears more than adequate to accommodate cost growth, even before any update.”

MedPAC argues that the aggregate Medicare margin for freestanding nursing homes in 2013 was 13.1%, the 14th consecutive year it exceeded 10%. However, the American Health Care Association is now shooting back at MedPAC’s decision, claiming MedPAC’s own research shows that nursing homes operate at an overall margin of only 1.9%.

MedPAC is now calling for CMS to move toward value-based purchasing and quality reporting programs. Additionally, MedPAC has recommended that Congress eliminate the market basket update, revise the prospective payment system, and rebase payments beginning with a 4% reduction to the base rate. Comments to CMS’ proposed rule are due on June 19.

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Summary Of Latest OIG Report On Hospices

Earlier this month, the OIG released a report on hospices, titled “Medicare Hospices Have Financial Incentives To Provide Care In Assisted Living Facilities.” The report provides information to inform CMS’ payment reform decisions and is part of the OIG’s larger body of work on hospice care. Although the report focuses on Assisted Living Facilities (ALFs), many of the issues discussed pertain to the hospice benefit more broadly. The issues are similar to those that both the OIG and MedPAC have identified in other hospice settings, such as nursing facilities. The report explores the financial incentives created by the current payment system and the potential for hospices to target beneficiaries in ALFs because they may offer hospices the greatest financial gain. The findings in this report and previous OIG reports show that payment reform and more accountability are needed to reduce incentives for hospices that solely focus on certain types of diagnoses or settings.

Click here to see the report.

Click here to read a summary of the report from NAHC.

CMS Final Rule: Key Revisions To Medicare’s 2015 Physician Fee Schedule

Physicians have mixed feelings about the final rule CMS issued last week that includes Medicare’s 2015 physician fee schedule. The rule also revises the agency’s policies on telehealth and paying different rates for the same service depending on where it was delivered. However, physicians were the most concerned with the potential that physician payments will be subject to a 21.2% cut driven my Medicare’s sustainable growth-rate payment formula on April 1 (unless Congress decides against it).

One of the highlights of the rule is the creation of a monthly care-management fee for patients with two or more chronic conditions. CMS has set the fee at $42.50 and has “backed away” from the previously proposed requirement that only physicians using 2014 edition-certified software would be able to collect the fee. The new final rule allows physicians using 2011 edition EHRs to collect fees. Physicians are also commending CMS for rewarding care coordination. However, they are also expressing concern over the administrative burdens associated with documenting non-face-to-face management services that could outweigh the benefits of the new payment. They believe the care-coordination fee should be higher due to the level of work involved.

Key changes in the final rule include CMS taking action on the Medicare Payment Advisory Commission’s recommendation for site-neutral reimbursement for similar services delivered in different settings. MedPAC intends to make rates the same whether the patient is seen at hospital or a physician’s practice. CMS will “study the issue and create new codes designating whether services were provided off or on a hospital campus so it can examine the trends in Medicare payment and beneficiaries’ cost-sharing as hospitals acquire physician practices and bill services they deliver as hospital-based outpatient care.”

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SNFs Could Soon Share Responsibility For Hospital Readmissions

According to the Medicare Payment Advisory Commission (MedPAC), approximately 14% of Medicare patients discharged from hospitals to skilled nursing facilities (SNFs) are rehospitalized for conditions that potentially could have been avoided.  As a result, SNFs could soon share responsibility with hospitals for avoidable readmissions.

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EHR Incentive Participation Remains Low

The number of eligible hospitals and professionals registered to participate in the electronic health record incentive program, as well as the number of those successfully attesting is lower than expected, according tot he Medicare Payment Advisory Commission (MedPAC), which met in Washington, D.C. earlier this month.

MedPAC expressed concern that while participation rates have been climbing, they remain low, particularly for small independent hospitals and physician practices. In addition, the percentage of participants that actually have demonstrated Meaningful Use and received incentive payments lag behind.

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