The Medicare Payment Advisory Commission (“MedPAC”) met last week to discuss moving toward a unified prospective payment system for all post-acute care settings.  Section 2(b)(1) of the Improving Medicare Post-Acute Care Transformation (“IMPACT”) Act of 2014 requires MedPAC to develop a prototype system that will span all four post-acute care settings: skilled nursing facilities, home health agencies, inpatient rehabilitation facilities, and long-term care hospitals.

MedPAC met on March 3, 2016 to discuss its work to date. A presentation from that meeting is available here.  The new system would feature a common unit of service with risk adjustment based on patient characteristics.  According to MedPAC, the new system would narrow the variation in profitability across stays and decrease the incentive to selectively admit certain types of patients.  MedPAC reports that this would result in a shift of payments from rehabilitation care to medical care.

All of the MedPAC commissioners expressed their support for the model in an informal poll conducted by Chairman Dr. Francis Crosson.  Crosson noted that the commissioners will have a chance to vote on the recommendations at MedPAC’s April meeting.

The IMPACT Act requires MedPAC to submit a final report to Congress by June 30, 2016.  However, the implementation of a new system could be several years away.  A second report, which will propose a prototype design for the new system, is not due until June 2023.

Reporter, J. Gardner Armsby, Atlanta, +1 404 572 2760, garmsby@kslaw.com