The Medicare Payment Advisory Commission today reported on its ongoing development of a post-acute payment system prototype, the first stage in a multi-step process to replace the current prospective payment systems for home health, skilled nursing, inpatient rehabilitation and long-term care hospital services, as mandated by the Improving Medicare Post-Acute Care Transformation Act of 2014. Based on an analysis of historical claims data, MedPAC staff said it would be feasible to develop a "reasonably accurate" single payment system for routine, therapy and non-therapy ancillary post-acute services based on patients' clinical characteristics at hospital discharge. However, they projected that companion policies such as value-based purchasing, readmissions penalties, at-risk arrangements and other reforms would be added to reduce payments over time, since the initial system would reflect current fee-for-service payment levels and inefficiencies. The commission will provide an update on the prototype during its January meeting, and plans to present the prototype to Congress next June.