The Medicare Payment Advisory Commission today discussed its progress toward meeting the IMPACT Act mandate to develop a prototype for a new unified payment system for post-acute care services provided by home health agencies, skilled nursing facilities, inpatient rehabilitation facilities and long-term care hospitals. The commission’s report on the prototype is due to Congress next June, and will be the subject of ongoing analysis and multiple MedPAC sessions until its submission. At its meeting today, the commission reviewed an initial framework designed to address wide variation in post-acute care use and costs, a misalignment between payments and costs, and payments based in part on site-of-service rather than patients’ clinical characteristics, among other concerns. The preliminary approach would establish two models: one for SNF, IRF and LTCH patients, which includes an add-on for non-therapy ancillary services such as ventilator services and drugs; and a second component for HH patients that, like current HH payment policy, does not pay for non-therapy ancillaries. Commission staff explained that the separate treatment of HH services was driven by significantly lower HH costs in comparison to those of the other facility-based post-acute settings. Today’s meeting also included sessions on the context for Medicare payment policy, and factors affecting variation in and Part B services for Medicare Advantage. Tomorrow’s sessions will address Medicare drug spending, emergency department services provided at stand-alone facilities, and payments from drug and device manufacturers to physicians and teaching hospitals.