New Post-acute Care Model Falls Short

Post-acute care (PAC) providers continue to play a central role in COVID-19 response and recovery. In particular, providers in COVID-19 hotspots have been crucial to helping take the pressure off over-crowded referring hospitals and providing specialized care for the sickest patients — including “long-haul” patients requiring extended care after the initial period of illness has been resolved. 

While the pandemic remains a major challenge to the entire health care delivery system, policymakers, as required by law, continue to develop a new post-acute care payment model that would combine payments for the four PAC settings: long-term care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), skilled nursing facilities (SNFs) and home health agencies. This process includes input from the post-acute care field via a technical expert panel, of which I am a member.

This past summer, the panel received an update from the government-contracted developer. In response to the panel presentations and deliberations, the AHA raised substantial concerns about the contractor’s inadequate policy-development process, as well as material concerns with the early design elements. 

The AHA strongly supports the overall objective of improving Medicare’s payment accuracy for post-acute care. Unfortunately, the contractor’s direction has reduced confidence that the model submitted to Congress next year will be able to achieve this objective.  

Multiple shortcomings have also come to the surface:

First, to be relevant for real-world use after the public health emergency, the payment model must reflect data that capture the long-term impact of the pandemic, which is expected to be substantial. Unfortunately, the model is being built using data from 2017 through 2020 that precede both the major post-acute care payment reforms in 2020, as well as the COVID-19 pandemic.

Another flaw is the model’s reliance on key data elements that are inconsistently defined across the four settings and even within each setting. This prevents cross-setting comparisons of diagnoses, case-mix levels, treatment needs and costs of care. These inconsistencies substantially weaken the analyses of existing post-acute care claims and patient data. 

Further, the contractor has not disclosed any information regarding the model’s intended risk adjustment methodology. Thus, stakeholders remain unable to assess the level of payment accuracy that this new system could achieve, as well as its subsequent impact on patient access to care. 

Given these fundamental flaws, we ask the Centers for Medicare and Medicaid Services and the Assistant Secretary for Planning and Evaluation to immediately intervene to refine the model’s work plan. However, some portion of these design challenges ultimately may be insurmountable until after the public health emergency. Should this be the case, our request that Congress adjust the timeline for the model’s development would become even more urgent.

The AHA's nearly 3,000 post-acute care members include LTCHs, IRFs, SNFs and home health agencies.