The Medicare Payment Advisory Commission today announced its final recommendation that Congress increase Medicare payment rates for the hospital inpatient and outpatient prospective payment systems by 3.25% in 2016. The commission also recommended that, concurrently, Congress reduce or eliminate payment differences between hospital outpatient departments and physician offices for selected procedures and pay long-term care hospitals the same rates as general acute-care hospitals for cases involving patients who are not deemed “chronically critically ill,” defined as an intensive care unit stay of at least eight days. The commission also voted to approve recommendations that would freeze Medicare payments to physicians in 2016 in place of the sustainable growth rate formula, establish a prospective per beneficiary payment to replace the Primary Care Incentive Payment Program after it expires at the end of 2015 and freeze payments for home health, skilled nursing facilities, ambulatory surgical centers, dialysis facilities, hospice, inpatient rehabilitation facilities and long-term care hospitals in 2016. Lastly the commission finalized its proposal to eliminate payment differences between IRFs and SNFs for selected, similar conditions, with relief from regulations specifying the intensity and mix of services for site-neutral conditions. “We have a number of concerns about MedPAC’s IRF-SNF site neutral recommendation, including that it may lead to the provision of SNF-level care for beneficiaries who actually would have achieved a better outcome if they had received IRF-level care,” said Joanna Hiatt Kim, AHA vice president, payment policy. The commission also discussed the relative cost of Medicare Advantage, Accountable Care Organizations and fee-for-service Medicare, and provided a status report on Part D. For more information, see AHA’s recent letter to MedPAC. The commission will meet again tomorrow to discuss hospital short-stay policy issues and next steps in measuring quality of care in Medicare.