The Medicare Payment Advisory Commission yesterday released its June report to Congress, which annually looks at issues affecting the Medicare program and health care delivery and services. The report also recommends a prototype design for a unified prospective payment system for skilled nursing facilities, home health agencies, inpatient rehabilitation facilities and long-term care hospitals, as required by the Improving Medicare Post-Acute Care Transformation Act of 2014. The Centers for Medicare & Medicaid Services is expected to use the prototype to develop a PAC PPS by 2023. As previously proposed by MedPAC, the prototype would pay for post-acute care services based on a patient's clinical characteristics rather than the site of service. Also as previously proposed, the report recommends reducing dispensing and supplying fees for Medicare Part B drugs to rates similar to other payers, and giving isolated rural hospitals the option to convert to an outpatient-only model that would be sustainable in a community with declining inpatient volumes. The commission also recommends changes to the Part D program to lower program costs and protect beneficiaries with high costs. In addition, the report presents an analysis of Medicare telehealth services, including use of telehealth in Medicare Advantage, and recommends expanding the use of waivers in Center for Medicare & Medicaid Innovation programs to include a broader range of telehealth services.